plus that are awaiting clearance. What the ministry did not announce was the uncertainty among its top bureaucrats over the policy framework that would come into play if the upa coalition does not come to power, or a modified version of the upa takes office. Two of the most critical players in the post-election scenario, the bjp and the cpi(m) have been sharply critical of the current sez policy. The bjp, in its manifesto, said that the sezs "spell disaster for the farm sector," and vowed to mend existing laws to rectify anomalies pertaining to land acquisition. The cpi(m) says it will amend the sez Act and rules to eliminate the tax concessions and regulate land use and labour policy in these zones. The Congress manifesto has kept mum on the issue, even though its members are known to have divergent views, which were reflected in parliamentary debates. The National Commission for Enterprises in Unorganised Sector, headed by noted economist Arjun Sengupta, recently flayed the current policy by observing: "The creation of sezs that manifestly benefit the large corporate entities is a case of not only betting on the strong but one of creating a special playing field for the already mighty." Besides, the Congress' new ally in West Bengal, Tri-namool Congress, has been extremely sensitive to the issue of "land grab". Impact of FT As Post-poll political angles apart, the commerce ministry bureaucrats are worried over another set of issues that could seriously impact the viability of these zones. Take the impact of the Free Trade Agreements (ftas) that the upa has been negotiating - and is on the verge of inking - with different countries and trading regions on the sezs in the domestic tariff area (dta). This is the area outside the tax-free zones subject to normal tax and duties. Under fta rules, imports of agreed products from partner countries to India enjoy nil or negligible duties. But the dta units importing from sezs (which are tax-free zones and a foreign territory for tax purposes) have to pay a slew of duties on the imports. These include basic customs duty, additional customs duty, excise duty and education cess. Once the ftas are opera-tionalised, dta units would import from fta countries instead of the sezs. Politically this would be suicidal as it amounts to encourage manufacturing in fta partner countries, when the domestic demand is much higher in markets abroad. Thus, the commerce ministry has begun an exercise to gather suggestions from developers and other stakeholders on the "state of the play" regarding these tax free enclaves. Senior officials say that lot of changes could be made of the rules and may not need a legislation. For instance, the new government could resolve the problem facing dtas vis-a-vis the ftas by doing away with duties while importing from sezs on the condition that the goods will be exported. Indeed, the reworking of the sezs policy would be one of the main priorities of the new government. Developers of sezs thus are keenly awaiting the outcome of inter-ministerial interactions on these issues once the new government assumes office. A lot is at stake and the new government, whatever its complexion, will have to tread carefully. So far, the sezs have attracted investments to the tune of Rs90,000 crore and given direct employment to 2.3 lakh people. Despite the global slowdown, exports from these sezs recorded 33 per cent growth to touch Rs89,000 crore last fiscal, sezs exports also formed 10 per cent of India's total exports. rbi has discouraged banks from lending to sezs and, as a result, developers have to rely on foreign funds, raised through external commercial borrowings or depository receipts. With the downturn in world capital markets, the costs of raising loans or equity have risen sharply. Besides, due to the global credit squeeze, India's major real estate players are finding it difficult to raise resources to fund the sezs. dlf has approached the government for surrendering four of its nine notified sezs on iT/iTes. Similarly, Parsvnath has put on hold 12 of its it/iTes sezs. There have been reports that, in view of the cash crunch, even Reliance Industries is looking for a strategic partner to fund its Rs40,000-crore sez project in Haryana. The project is to be spread over 25,000 acres and is billed as one of the biggest multi-product sezs in India with its own airport and power plant.