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Batting for the Reserve Bank of India and the finance ministry, the Planning Commission on Friday said concessions to special economic zones should be at par with those provided to infrastructure projects.
"SEZs should be given treatment similar to any other infrastructure project and there should be no concessional finance," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters on the sidelines of a Sebi function.
Supporting the Reserve Bank of India - which recently directed banks to treat lendings to SEZs at par with those to real estate, rendering advances to these zones expensive - Ahluwalia said he was not in favour of concessional benefits and additional incentives to SEZs.
The commerce and finance ministries have been at loggerheads over the mushrooming of SEZs, which North Block felt could lead to a revenue rip-off as many of them were being set up to take advantage of tax benefits.
SEZs involve a lot of construction for real estate development and should be given treatment similar to any other infrastructure project, Ahluwalia asserted.
Ahluwalia's comments follow the prime minister's caveat to states on excessive sops for projects in SEZs.
Commerce Minister Kamal Nath has sought the prime minister's intervention against a RBI directive to banks to treat SEZs at par with real estate projects for lending purposes.
Kamal Nath earlier termed the apex bank's decision "inconsistent" as its annual report had praised the SEZ policy.
Finance Minister P Chidambaram has, however, underplayed the controversy surrounding SEZs, saying the government was not a "divided house" although there may be a debate on the policy.
At the recently concluded conclave of Congress chief ministers at Nainital, party president Sonia Gandhi had asked state governments not to allow the prime agricultural land to be diverted for industrial purposes, including SEZs.
Following this directive, several Congress chief ministers have started taking steps in this regard and even Nath, a strong advocate of SEZs, too supported this move.
In the first phase, the board of approval had cleared 150 SEZs, while recently granted formal nod to 18 proposals and gave in principle approval to another 13.