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Push for SEZs, retail trade sector

Finance Minister Pranab Mukherjee’s push for special economic zones (SEZs) and suggestion to open up retail trade has brought the two issues back to the centre-stage of UPA politics.

delhi Updated: Feb 27, 2010 00:37 IST
Aurangzeb Naqshbandi

Finance Minister Pranab Mukherjee’s push for special economic zones (SEZs) and suggestion to open up retail trade has brought the two issues back to the centre-stage of UPA politics.

In his speech, Mukherjee said the Centre was committed to ensuring continued growth of SEZs to draw investments and boost export and employment.

“SEZs have attracted significant flows of domestic and foreign investments. In first three quarters of 2009-10, exports from SEZs recorded a growth of 127 per cent over the corresponding period last year.”

The Trinamool Congress has been openly opposed to the move. Party chief and Railways Minister Mamata Banerjee had sought a re-look at the SEZ policy and led the agitations against the Nandigram SEZ and the Tata Motors’ plant at Singur in West Bengal.

Some Congress leaders privately admitted that the policy would cause large-scale displacement, widen regional imbalances and spur social conflicts.

In spite of the murmurs within the party, the Congress officially welcomed the announcement. “It is good that the focus on the export potential of SEZs will continue,” said spokesperson Manish Tewari.

Mukherjee also suggested opening up the retail sector to counter rising prices. He said there was a political constituency for the move, given that the cost of intermediation was one of the main factors behind price hike.

The UPA has come under fire from both the Opposition and the allies over the price issue.

“There is a huge cost of intermediation from farm gate to kitchen,” he said, as there was a gap of Rs 6-7 per kg between wholesale and retail prices.

The move would help bring down the difference between the farm gate prices, wholesale prices and retail prices.

To push his argument, Mukherjee quoted Prime Minister Manmohan Singh: “We need greater competition and therefore need to take a firm view on opening up of the retail trade.”

But his suggestion had few takers. The BJP said it was opposed to any backdoor entry of FDI in retail. “We see this happening in coal sector where the government is appointing a regulator when it is the sole player,” party spokesman Prakash Javdekar said.