Chandigarh, August 25: Chandigarh’s bid to host an International Financial Centre (IFC) has been rejected by the Union finance ministry, which clarified that only one such hub is permitted in India and that the Gujarat International Finance Tec-City (GIFT City) must be fully utilised before new proposals are considered.
Congress MP Manish Tewari had written to finance minister Nirmala Sitharaman in December last year, urging the creation of an IFC in Chandigarh to boost the region’s economy and strengthen India’s global financial presence. He had argued that the city’s role as the joint capital of Punjab and Haryana, along with its proximity to Himachal Pradesh, placed it strategically within north India’s economic network.
The idea also received public backing when Punjab governor and UT administrator Gulab Chand Kataria mentioned it in his Independence Day speech. Following this, the UT administration began work on the proposed “Chandigarh International Finance-Tec City” in Industrial Area, Phase 3, spread over 153 acres. Deputy commissioner and industries secretary Nishant Kumar Yadav had even told a NITI Aayog event that plans were underway to appoint a consultant for a feasibility study, benchmarking of the GIFT City model, and preparation of a detailed project report.
However, the finance ministry said in a statement Sunday that the Special Economic Zones (SEZ) Act, 2005, allows for an International Financial Services Centre (IFSC) to be approved only within a SEZ, and GIFT SEZ Ltd had already been granted such a licence in 2011. It added that globally, countries host only one IFC to ensure regulatory ease and efficiency.
“Globally, one can find only one international financial centre in a country. This is done to maximise the efficiency gains and for optimum utilisation of resources,” the ministry noted, adding that offshore financial activities are easier to regulate at a single hub. The ministry also recalled former finance minister Arun Jaitley’s 2017 remarks in Parliament that there is a limit to how many IFSCs can be set up.
With the UT administration having already initiated steps toward the project, Tewari said the rejection should serve as a caution. “Before spending money on hiring a consultant or doing the leg work, the Punjab governor must speak to the finance minister first as to whether the Union government has any appetite for another GIFT City or not,” he said.
Tewari, who is also a member of the Parliamentary Standing Committee on Finance, added that the panel will review the functioning of GIFT City in Mumbai on September 2.
