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| Govt confident of $200 bn exports in FY11 |
| Press Trust of India / New Delhi Aug 23, 2010, 14:15 IST |
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The government today extended sops worth Rs 1,052 crore to exporters, particularly for the labour-intensive textile, handicrafts and leather sectors, to help them see through the fragile economic recovery globally.
"We are not yet out of the woods," Commerce and Industry Minister Anand Sharma said while extending the schemes like DEPB, under which taxes are reimbursed to exporters, subsidised interest and sops for import of capital goods.
Releasing the annual supplement to the Foreign Trade Policy 2009-14, he said the revenue implication of these measures would be Rs 1,052 crore.
The government made it clear that the popular Duty Entitlement Pass Book (DEPB) scheme, which has been in vogue for over a decade, is being extended for the last time.
"Recognising the fragile recovery and the prevailing uncertainties (in the global markets), I have been able to obtain extension of DEPB one last time for a further period of six months till June 30, 2011", Sharma said.
Experts said drawing the curtains on the DEPB scheme was inevitable as it was considered incompatible with the global trade rules under WTO.
However, Commerce Secretary Rahul Khullar indicated to reporters that the Ministry might formulate an alternative scheme.
A number of additional products from sectors like engineering, leather, textiles and jute have also been added to the existing two per cent interest subvention scheme. Handloom, handicrafts, carpet and the SMEs have been getting this facility, which will now be available till March 31, 2011.
As regards the prospect of the current fiscal, the minister said: "We are on course to achieving export target ($200 billion) for 2010-11". Exports in the previous fiscal totalled $178.6 billion in the midst of the global economic crisis, which affected demand in the developed world.
The government also extended the zero-duty Export Promotion Capital Goods (EPCG) scheme by one year to March 31, 2012. The scheme, which was announced in August last year, was to expire on March 31, 2011.
Steps to reduce transaction cost of exports too were announced in the policy. At present, transaction costs are estimated at 7-8 per cent of the exports value.
India Inc and exporters body today expressed satisfaction over the steps taken by the government in wake of the global demand slowdown and domestic resource constraints.
"It is a forward looking policy," Federation of Indian Export Organisations (FIEO) President A Sakthivel said.
Most chambers, including Ficci and CII, welcomed the policy supplement, amid promises that the transaction cost for exporters would be brought down by 40 per cent.
Sharma said that the country is on course to achieving $200 billion export target for 2010-11.
During April-July 2010-11, exports grew by 30.1 per cent to $68.63 billion. In the last fiscal, India's exports were at $182 billion.
Also, interest subvention of two per cent has been extended to textiles, jute, leather and engineering goods sectors, Sharma said.
Currently, the scheme is for sectors like handicrafts, handlooms, carpets and small and medium enterprises. The scheme is to expire on March 31, 2011.
Under the scheme, banks provide loans at a rate lower by two per cent than the market rate.
"A bonus incentive scheme is being introduced for those sectors whose exports are not doing well. This specially covers labour intensive sectors like handicrafts, handlooms, leather and leather manufacturers, carpets, sports goods, toys and some bicycle parts," Sharma said.
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