Issue being exaggerated, SEZ FM

TIMES NEWS NETWORK[ SUNDAY, OCTOBER 08, 2006 03:10:32 AM]

NEW DELHI: A day after Prime Minister Manmohan Singh observed that SEZs
were here to stay, the sharp differences between the commerce and
finance ministries over it seem to have got somewhat blunted.

Finance minister P Chidambaram said on Saturday, that the disagreements
had been “exaggerated”. Speaking at the infrastructure seminar, Mr
Chidambaram said: “Contrary to popular perception, the commerce minister
and I have same points of view. The problems are being exaggerated.”

The FM, however, reiterated that there were certain revenue concerns
that his ministry had expressed and a number of other issues had also
been raised by the agriculture ministry and farmers about various
aspects of SEZs including land acquisition.

He said these concerns would be taken up at the empowered group of
ministers on SEZ, headed by defence minister Pranab Mukherjee, and if
necessary, by Prime Minister Manmohan Singh. Mr Chidambaram added that
the government was not going to stop building further SEZs and said that
the PM has also stated that SEZs were here to stay.

Speaking at the seminar, commerce minister Kamal Nath said that the
proposed SEZ policy was widely debated upon as it was put on the
internet for eight months before it became an Act. “The purpose of the
SEZ Act is to promote infrastructure development and exports. People are
commenting on it without having read the rules,” he said.

The difference of opinion between the finance and commerce ministries
had of late overshadowed the growth in SEZ approvals, which have already
crossed 150, within the past six months.

The issue has also been taken up by the Planning Commission and the RBI,
both of whom have advised caution on the pace of approvals. The RBI has
instructed banks to club loan applications for SEZs with those for real
estate. Banks have a higher risk weightage for such loans. In this
context, the apparent conciliatory tone of the two ministers was seen as
significant by industry leaders.

The finance ministry has claimed that revenue losses due to tax sops
given to SEZs, could exceed Rs 1,00,000 cr, a figure disputed by the
commerce ministry.

http://economictimes.indiatimes.com/articleshow/2116917.cms