Plan paper raises concerns over SEZs

The 11th Plan Approach Paper, which will be placed before the National Development Council tomorrow, has raised concerns over revenue losses on account of tax sops to special economic zones (SEZs). It has also sought safeguards to prevent SEZs from being a realty play.

The paper said there could be a large loss of revenue on account of tax concessions for export of goods and services. "These concerns would need to be addressed and where necessary, adequate safeguards put in place," it added.

"There are concerns that the SEZs primarily focus on real estate and there is absence of a level-playing field between manufacturing units within SEZs and those in the domestic tariff area," the paper said.

However, the document said SEZs and special economic regions can provide important infrastructure for the industry. SEZs have become popular within a year of launching, it said.

The Paper forms the basis of the next five-year plan period and would be discussed by the NDC, comprising all chief ministers and Prime Minister Manmohan Singh, tomorrow.