| The group said it would examine the need for any further policy changes after 75 of the already approved zones became operational, or in six months from now, whichever was earlier. Of the 150 zones approved since the SEZ Act came into effect this February, not one has become fully operational till date. |
| Ministers in the E-GoM, headed by Defence Minister Pranab Mukherjee, felt the cap, imposed earlier this year, had created an unnecessary scramble among investors to obtain an SEZ "licence". |
| Lifting the cap, they said, would ensure that only serious players applied and got a chance. There are nearly 200 applications pending before the Board of Approvals. |
| The decision overrode objections raised by Finance Minister P Chidambaram, who circulated a note quantifying the revenue losses arising out of the tax giveaways for SEZs. He pointed out that the losses would total up to a staggering Rs 70,000 crore. |
| Refuting the claim, Commerce and Industry Minister Kamal Nath pointed out that the zones would instead lead to revenue gains of around Rs 44,000 crore over the next 5-10 years, besides creating lakhs of jobs. |
| Mukherjee, sources said, supported Nath's contentions, and added that the decision had to be based not on a "hypothesis", but on "actuals." |
| Chidambaram also raised the issue of inadequate customs staff to man these zones, and said going slow on the clearance of more zones would provide the revenue department enough time to deploy officials. |
| Other ministers at the meeting, however, played down these fears, saying the revenue department should speed up the process for appointing officials. |
| Communications and IT Minister Dayanidhi Maran also pointed out that imposing a cap on SEZs would send a wrong signal to investors, particularly at a time when foreign investors were looking favourably at India as an investment destination. |
| Nath further said the government should allow some time before deciding to plug any loopholes in the policy. |
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