Articulating his view that too many special economic zones (SEZ) lead to revenue losses, Finance Minister P Chidambaram said, on Saturday, that the country needs not more than 6-10 multi-product SEZs.

“I still believe that we should have 6-10 large multi-products SEZs like China has,” Mr Chidambaram said, adding that the finance ministry has pointed out that setting up of too many SEZs creates a huge hole in the country’s revenue system.

IT remains dominant

Mr Chidambaram further said that the SEZ policy has taken a slightly different turn, leading to formation of large number of IT-specific SEZs with the intention of enjoying extended tax shelter period.

Mr Chidambaram said a large number of SEZs, which were given in-principle approval, are facing cancellation because the state governments no longer endorse them. “I think notices have been given in about 50 cases,” he said. Mr Chidambaram said that the reaction from those whose land has been taken away was expected, more so because the land value has multiplied after change in classification from agriculture to industry.

Without being drawn into further arguments, the finance minister said, “Until the (SEZ) Act of Parliament is amended or there are policy changes, I am bound as member of the government to do my best to get it administered... That is a policy, I don’t wish to speak about it in public.”

The finance minister  closed the argument by stating that whatever has to be done, has to be done within the government.