UT Finance-Tec City plan contrary to Centre’s stand: Chandigarh MP Manish Tewari

Chandigarh MP and former Union Minister Manish Tewari on Sunday said the UT Administration’s plan to establish the proposed Chandigarh International Finance-Tec City is contrary to the Centre’s stand.

Tewarti, who is also the member of the Parliamentary Standing Committee on Finance, which would be reviewing the functioning of the country’s lone GIFT City at Gandhinagar in Gujarat on September 2, has dubbed the Chandigarh Administration’s proposal to appoint a consultant to conduct feasibility study for setting up Fintech City on the lines of Mumbai’s GIFT City as wastage of government resources.

“I had taken up the issue of establishing an International Finance Centre (IFC) on the lines of the Gujarat International Finance-Tec (GIFT) City with Union Finance Minister Nirmala Sitharaman in December 2024,” the senior Congress parliamentarian said.

Sitharaman acknowledged Tewari’s letter on January 10 followed by a detailed response from the Union Minister of State for Finance Pankaj Chaudhary on January 23.

Tewari mentioned that the gist of Chaudhary’s response is that the Union Government does not contemplate more than one offshore financial centre in the country.

“Before spending money on appointing a consultant and other paraphernalia, Punjab Governor and Chandigarh Administrator Gulab Chand Kataria should speak to the Union Finance Minister first as to whether the Government of India has any appetite for another GIFT City in the country,” Tewari advised.

He added that the Parliamentary Standing Committee on Finance, of which he is a member, would be reviewing the functioning of the GIFT City in Mumbai on September 2.

“When the country’s lone GIFT City is still evolving and has not yet shown any desired results, how can another such city on its lines can even be thought of,” Tewari wondered.

Responding to MP’s proposal of setting up an International Financial Centre (IFC) in Chandigarh, the Union Minister of State for Finance has said, “Globally, one can find only one IFC in a country. This is done to maximise the efficiency gains and for optimum utilisation of resources. The reason for this strategy is that the mainland activities are not affected by the offshore activities. This provides an easy mechanism for the regulator to monitor one location and keep upgrading regulatory infrastructure at the said location.”

Quoting former Finance Minister Arun Jaitley’s statement on the floor of the Lok Sabha on December 22, 2017, Chaudhary said there is a limit to how many IFSCs can be set up and since GIFT City is already under development at Gandhinagar in Gujarat, there is a need to first optimally utilise GIFT City before considering other requests. This was reiterated during the debate on the IFSC Authority Bill in the Lok Sabha on December 11, 2019.

“The International Financial Services Centres Authority (IFSCA) was established on April 27, 2020, under the IFSCA Act, 2019 as a unified regulator with a holistic vision to promote ease of doing business in IFSC and provide a world-class regulatory environment. As the dynamic nature of business in the IFSCs require a high degree of inter-regulatory coordination within the financial sector, the IFSCA has been headquartered in Gandhinagar, where the only IFSC in India currently is located. This enables a smooth engagement between the Authority and IFSC units for a coherent and integrated regulatory framework,” the MoS Finance informed Tewari.

Pertinently, the UT Administration is in the process of appointing a consultant to conduct a feasibility study for setting up a GIFT City in Chandigarh on the lines of the one existing in Gandhinagar.