(rptg, with corrections throughout)

New Delhi, Dec 23 (UNI) The CPI(M) today demanded the Government amend the Special Economic Zones (SEZs) Act in view of the proposal to lift cap on the numbers of such units, the ''disproportionate'' demands from IT units to avail the benefit of the 10-year tax break for a longer period and conversion of industrial projects into SEZs.

''The government has, on record, accepted the Left parties' demand to review the SEZ Rules in January next year,'' the editorial of the party's Weekly journal, ''Peoples' Democracy'' said.

While citing several reasons for the need to amend the Act, the CPI (M) said a new act must be brought to replace the existing one and rules would have to be amended on crucial issues like the land acquisition, tax concessions, land use and implementation of labour laws.

Referring to the government's note claiming that no abuse of the Act had been noticed so far and any arbitrary change would send a wrong signal to the investors, the CPI(M) said the government's postion was ''untenable.'' ''When the SEZ Act was passed in Parliament, the idea was to provide a stable policy framework for creating some SEZs in different parts of the country, which, through the provision of quality infrastructure and some tax incentives, would give a boost to industrial growth and exports,'' the editorial said.

The editorial observed that China, which was considered to be a success story as far as manufacturing exports were concerned, had only six SEZs.

''An unofficial estimate suggests that there are only a total of about 2,000 SEZs in the entire world,'' the party said, in response to the government's note that approval for as many as 237 SEZs had already been sanctioned while 166 had been approved in-principle.

The CPI(M) also pointed out that initially there was a cap of 150 as the total number of SEZs to be permitted, which was subseqently lifted.

Referring to the approval of as many as 148 proposals approved in the IT sector, the Left party said the IT units were now further demanding tax holiday for 10 more years, which otherwise could not be availed beyond 2009. Thus a situation has been created for the perpetuation of tax breaks for one of the most profitable sectors of economy.

''This is highly unjustified,'' the CPI(M) added.

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