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The council
had met to discuss the reports of the Investment Commission
led by Ratan Tata and National Manufacturing Competitiveness
Council headed by V. Krishna Murthy on investments and
manufacturing initiatives.
Bajaj reportedly opposed the fiscal concessions being doled
out to those promoting Special Economic Zones (SEZs). He
ques tioned the logic of providing concessions not available
to manufacturing units in the domestic tariff area (DTA),
apparently not convinced that SEZ promoters and units should
be allowed zero-duty import of inputs, capital goods, raw
materials and consumables in addition to income tax holidays
and exemption from excise duties.
These concessions to SEZs would be unfair to companies that
had been operating under trying circumstances in other areas
for over 2–3 decades, Bajaj reportedly told the Prime Minis
ter.
Mukhesh Ambani reportedly interjected at this juncture. With
RIL committing over Rs 50,000 crore investments to SEZs in
Punjab and Haryana, he defended the provisions in SEZ act,
it is learnt, on the grounds that these concessions are
needed in order to deliver quality and cost competitive
products in the international markets.
In this context, he apparently pointed to the “protective
tariff wall” that was put up by successive governments for
30 years in post-Independence era to “safeguard the
interests of domestic industry” (including both Bajaj and
Reliance).
The Prime Minister did not intercede in the argument,
sources said, and it fell on HDFC chairman Deepak Parekh to
sound a conciliatory note. Parekh’s line, according to
insiders, was that fiscal concessions were the order of day
worldwide irrespective of whether a company is catering to
domestic or international markets.
Meanwhile, another corpo rate bigwig pointed to the fact
that Intel had decided not to move its global chip-making
pro duction base to Chennai as the then chief minister
Jayalalithaa did not give into the demand for US $ 100
million capital subsidy.
Jayalalithaa was willing to provide 100 per cent power back
up and land at concessional rates, despite which Intel did
not enter India, it was pointed out. |
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