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`Revenue loss from SEZs still valid`
September, 20th 2006
Finance Minister P Chidambaram today said his ministrys concerns over revenue loss in the long run due to proliferation of special economic zones still stood. All that the finance ministry has said is there must be some caution in approving SEZs because in the long run revenues could see a serious shift, he said on the sidelines of the annual World Bank-IMF meeting here. This point still remains and a group of ministers promised us that they will carefully watch the progress of SEZs and review the policy if and when it becomes necessary. So that is where it stands, Chidambaram said. However, the finance minister refused to be drawn into a controversy with the IMF Chief Economist Raghuram Rajan over his remarks that special economic zones, particularly in the IT sector, are being set up to take advantage of tax sops. There were reports of serious differences between the commerce and finance ministries, which sees SEZs as revenue rip-offs. I am not getting into a debate between Raghuram Rajan and the commerce ministry. Parliament has passed the law and we welcome SEZs, Chidambram said. The Commerce Ministry is now reported to be open to capping the number of IT special economic zones, provided the Finance Ministry is willing to continue the tax sops given to Software Technology Parks of India (STPIs) beyond FY09.
 
 
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