State’s finance centre project  for city runs into roadblock

MMRDA earmarks 20 hectares in BKC for project, but 50 hectares required to set up Special Economic Zone

Mumbai : The Maharashtra government’s ambitious plan to build the much-discussed International Financial Service Centre (IFSC) in the country’s financial capital has run into a technical roadblock. Mumbai Metropolitan Region Development Authority, the nodal agency for the project, has earmarked a plot of 20 hectares in Bandra-Kurla Complex for the IFSC, but that is inadequate for the Centre to declare it a Special Economic Zone (SEZ) for the proposed IFSC.

As per norms, the minimum area required for the declaration of SEZ is 50 hectares, and MMRDA has fallen short by 30 hectares. According to officials of MMRDA, they are formulating a plan to approach the Centre to relax the minimum requirement. Confirming this move, UPS Madan, Metropolitan Commissioner of MMRDA said: “We are going ahead with the move to approach the Centre. We need certain exemptions from Government of India. Some changes in regulations are also needed.”

A senior MMRDA official added: “We will ask the Ministry of Commerce to relax the norms and consider 50 hectares of built-up area. Such a norm is followed in case of SEZs for IT/ITES.” He said that Mumbai is a land-starved city and hence this relaxation should be granted to the “financial capital”.

“We are also approaching Ministry of Trade & Commerce for declaration of SEZ. The formal proposal is in its initial stage; it’s getting crystallised,” Madan added.

An IFSC is an area which is outside the jurisdiction of the domestic economy and is set up to facilitate easy flow of finance, financial services and products. Former Finance Minister P Chidambaram had proposed an IFSC in his 2005 Union Budget. Along with that a panel headed by former World Bank economist, Percy Mistry also backed to make Mumbai an international financial centre in 2007.

However, with the global financial crisis that unfolded in 2008 put the brakes on the plan. Earlier this year, ‘GIFT City’ in Gandhinagar, Gujarat, was operationalised and it became India’s first IFSC.

Chief Minister Devendra Fadnavis has constituted a taskforce to formulate a detailed roadmap for IFSC in Mumbai. The taskforce is jointly headed by former Deutsche Bank chief executive Anshu Jain and State Bank of India Chairperson Arundhati Bhattacharya.

The taskforce is working on an idea to set up the Mumbai IFSC on the London global financial centre-model — where the main hub would be in Bandra-Kurla Complex, while several mini-hubs will be set up for regional players elsewhere. “The taskforce will strategise and decide how to go about the project,” added Madan.

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