Finmin puts a bar on MIR plans

The industry ministry's proposal to have manufacturing investment regions (MIRs) has hit a roadblock with the finance ministry not too keen on the concept.

North Block has pointed out that there is no need to have MIRs since the concept of special economic zones already exists.

"For the manufacturing sector, there is the SEZs scheme. Since SEZs can be multi-product and sector specific there is no need for a separate manufacturing hub," a senior ministry official said.

The department of industrial policy and promotion was keen to link the MIRs with the petroleum and chemicals and petrochemicals investment regions (PCPIR). The contention of the department was that the PCPIR concept could be weaved into the MIRs.

The finance ministry has already given the go-ahead to the PCPIRs which is expected to be taken up by the Cabinet soon. The Cabinet note for the PCPIRS has been given by the department of chemicals and petrochemicals.

"There is sound logic for the PCPIRs since such plants need to be located closer to ports and require a large area. The idea is to duplicate the Singapore success in India. Though Singapore has no local resources but still has one of the best petrochemicals hubs in the world," the official said.

The PCPIRs would not be given any additional sops barring the tax breaks available under Section 80 IA. The section allows 100 per cent deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development for 10 consecutive assessment years.

The tax breaks can also be availed either by the developer or the co-developer. The proposal also envisages setting up of SEZs within the PCPIRs. Such zones would enjoy the SEZ benefits. The government is hoping to set up five PCPIRs initially.