Falling exports: Centre, states, industry discuss taxes, infra

Faster refund of state taxes, improved rail-road connectivity, land and environment clearances were among the major issues discussed at a meeting of central and state governments and industry in quest of measures to arrest persistent fall in exports.
Besides, the first meeting of the Council for Trade Development and Promotion chaired by Commerce and Industry Minister Nirmala Sitharaman, also deliberated on quality and standards of products, labour issues and the Assistance to States for Infrastructure Development of Exports (ASIDE scheme).
Sitharaman said all the state ministers and representatives present in the meeting raised the issue of ASIDE scheme, which is now transferred to states.

They suggested that the scheme should be run by the central government only.
"ASIDE is something which all states were speaking in one voice. They said you have withdrawn that but we have not actually withdrawn. We have under the 14th Finance Commission's recommendations given away ASIDE funds to the states," she said.
She said that while recognising that fact, states still wanted the Centre to deal with export promotion infrastructure.

"So most of them have said ... Commerce Ministry should still continue like the old way in which ASIDE was utilised for creating industrial infrastructure for export promotion. So that was one common grievance and suggestion," she added.

Further, the minister suggested the states to hold a bimonthly meeting with exporters to understand their issues and help the country in boosting the shipments.
On the declining exports, she said, "I am not saying that the story is all Hunky-dory, its all bed of roses. There is lot of scope for us to improve".
She added that exports are concern for some sectors but there are sectors which even in this adverse environment are still holding out well.
"For the first meeting of the council, I wished there were more ministers," Sitharaman said. About 10 state ministers including Karnataka's attended the meeting.

"The meeting was very productive. The sense was that we can do better but there was no sense that Oh My God, what is happening. There was a sense that we have the capacity, there are landlocked states which might need a bit of transport subsidy, there may be states which have a peculiar need," she old reporters after the meeting.
The states suggested measures under three broad parameters
-- strengthening of infrastructure, benefits to exporters and restoring the facility of ASIDE scheme.
She said the ministry will give specific replies to suggestions that have been given by the states.

Sitharaman expressed hope that the council will help in developing a framework for making the states active partners of the ministry in boosting exports.
She asked the state to give inputs for creating facility for testing, certification, trace-back, packaging and labelling.
She also advised them to enhance their co-operation with central agencies for setting up common facilities like testing labs, training institutes, packaging and storage support.
States submitted their suggestions and gave feedback on measures to remove roadblocks in improving the exports.
Karnataka Industry and Trade Minister R V Deshpande underscored the importance of upgrading railway connectivity and doubling lines and upgrading minor ports.

Deshpande said that imposition of minimum alternate tax is hindering the growth of SEZs.
He also sought changes in the 'Ease of Doing Business' ranking method. He suggested that rankings should be linked to implementation and reflect the performance of the state.
Siddeque Ahmed, Assam's Minister of Industries and Commerce, requested for improving road connectivity as well as transit facilities with Bangladesh.
Industries Minister from Himachal Pradesh Mukesh Agnihotri requested for restoring the special package for the state.
Rajasthan's Industry Minister Gajendra Singh Khimsar suggested setting up of a 'revenue laboratory' in Jaipur to fasten the movement of export consignments.

Industry chambers CII, Ficci and FIEO associations also gave their suggestions to boost exports.
Directorate General of Foreign Trade (DGFT) in its presentation suggested that states exempt exports from local levies like trade tax, mandi tax and electricity tax.
It also asked for development of infrastructure around ports and quality supply of power and water.
In its presentation, the DGFT mentioned that exports of 22 principal commodities such as spices and coffee reported negative growth in April-November 2015, while eight reported positive growth, such as handicrafts and carpets.
In 2014-15, Maharashtra exported goods worth Rs 4.45 lakh crore followed by Gujarat (Rs 3.64 lakh crore) and Tamil Nadu (Rs 1.68 lakh crore).

Enlisting the major constraints for states, it highlighted inadequate infrastructure, taxation issues in states, land, environment and regulatory issues, and labour matters.
(REOEPNS DCM 93)
Federation of Indian Export Organisations (FIEO) said that states have a very important role to play in promoting exports.
"Delay in refund of state levies adversely effect the liquidity position of small exporters. States should put in place a mechanism for timely clearance of such dues," it said in a statement.
States should focus on improving the last-mile connectivity of major exporting hubs to ports and should devise export strategies.
"Geographical Indications (GI) help protect interest of a nation as a whole as well as to fetch better margins for a product. States should be pro-active in supporting associations in identifying products that may qualify for obtaining GI tag," it said.