SEZs have come to stay: PM

P. Vaidyanathan IyerPosted online: Wednesday, October 04, 2006 at 0000
hrs Print Email
On board PM’s special aircraft AI-1: Prime Minister Manmohan Singh on
Tuesday said special economic zones were here to stay. Underscoring the
inter-ministerial wrangles — especially between the Commerce and Finance
ministries — over SEZs, he said, “SEZs have come to stay, but it is also
true that they need to operate in a manner in which, I think, concerns
that have been expressed can be dealt with.”

According to the Prime Minister, in a democracy, there were bound to be
issues that would be discussed. “I do not think, this is weakness of our
system,” he said. The issues raised by many in the context of SEZs would
be dealt with, Singh asserted.

The Finance and Commerce ministries have been at loggerheads since the
SEZ policy has been on the works. While the Finance Ministry estimates
SEZs to cause revenue loss of over Rs 1,60,000 crore, the Commerce
Ministry says SEZs will bring in investments of Rs 100,000 crore by
December 2007 and create five lakh additional jobs.

He admitted there were problems in other areas like reforms in banking
and insurance sectors. India has to push forward the reforms in these
sectors because it needed long-term funds for attracting money into
infrastructure. “We need as much as $150-200 billion in the next 7-8
years in our infrastructure,” Singh said.

There was a need to create a strong debt market and this could come only
when pension fund activity and the insurance industry gets a boost.
“Unfortunately, these reforms are blocked because we do not have a
consensus in our coalition, but we keep on trying,” he added.

While the proposal to hike the foreign direct investment cap in the
insurance sector to 49 per cent from 26 per cent has been lying in the
back-burner for over two years now, the Pension Fund Regulatory and
Development Authority Bill could not be introduced because of stiff
resistance from the Left-affiliated trade unions.

ECONOMY IN GOOD SHAPE: The Prime Minister said the

first quarter gross domestic product growth rate figures showed that the
economy was in good shape. “It will remain in good shape,” he said.

In the April-June quarter, the Central Statistical Organisation has
estimated the GDP growth rate to be 8.9%. “I think that first quarter
figures for the last three years have been the best possible figures
compared with what happened in the previous quarters,” the Prime
Minister noted.

He, however, said a lot of work remained to be done, both to boost
economic growth and simultaneously, make it inclusive.

JD(U) wants SEZs scrapped

NEW DELHI: While the BJP is still struggling to formulate a clear stand
on SEZs, the Janata Dal(U) has positioned itself in one extreme
demanding that the PM intervene, scrap the SEZ Act and withdraw the
approvals granted for setting up SEZs so far. JD(U) chief Sharad Yadav
has written a letter to Manmohan Singh urging him to break his silence
to end the confusion created by contradictory statements of his
ministers. He has referred to statements of Commerce Minister Kamal Nath
echoing the sentiments of Congress president Sonia Gandhi that there
will be no SEZ on fertile land. On the other hand, Agriculture Minister
Sharad Pawar has said adequate compensation should be paid to farmers
whereas Rural Development Minister Raghuvansh Prasad Singh has termed
SEZs land scam.

p.vaidyanathan.iyer@expressindia.com
http://www.indianexpress.com/story/13998.html