The central leadership of the CPI(M) and chief ministers of the Left-ruled states of Kerala and West Bengal have discordant views on the question of a cap on the number of Special Economic Zones. The CMs support the government of India's contention that a cap will result in licence raj, contrary to the views held by their party leadership.
At Wednesday's meeting between the Empowered Group of Ministers and leaders of the Left and the Congress, Commerce Minister Kamal Nath made a presentation in which he said that there were "adverse reactions" from many CMs including those of West Bengal and Kerala on the issue of a cap.
Nath said that these CMs opposed a cap as they believed that it would mean re-introduction of licence raj and a secondary market for SEZ approvals.
In its reply to a note from the Left parties on the SEZs, the government had earlier argued on the same line stating that the number of SEZs should be left to the market forces and any cap will result in licence raj.
"It is best to leave it to the market forces to operate. Stipulation of any cap on establishment of SEZ would only lead to a sort of licence raj and a premium on transfer of SEZ approvals to other parties. The department of commerce is, therefore, of the view that there should be no cap."
The central leadership of the CPI(M) has, however, rejected the government's contention terming it as "problematic". "It fails to grasp the grave implications of such market forces determined SEZ model for balanced regional development, which the RBI has noted in its latest Annual Report," said the editorial of the CPI(M) mouthpiece People's Democracy in its latest issue.
Licence raj cannot surely be replaced by free for all, said the editorial written by CPI(M) Politburo member Sitaram Yechury who was present at the meeting with the EGoM in which Nath had quoted the CMs' stance.
In a "rejoinder" to the government's reply, the CPI(M), however, sought to justify the divergence of views expressed by the two CMs saying that the request to lift the cap had been made by the CMs in a context where en masse approvals had already been granted to set up SEZs in a handful of states, especially Andhra Pradesh, Maharashtra and Karnataka.
"State governments made the request to lift the cap simply because they did not want a situation to arise where 150 SEZ proposals would be cornered by a few states with the others left out of the race," said the rejoinder, which obviously chose to gloss over the CMs' opinion about the cap leading to licence raj and secondary market.
To buttress its argument about "regional imbalance" that could be created by market forces without a cap, the CPI(M) argued that out of 247 SEZ proposals approved till date, four states- Maharashtra (48), Andhra Pradesh (45), Karnataka (29) and Tamil Nadu (25)- accounted for over 60 per cent of the total approvals.