Sops For Farm, Marine Sectors Likely In New Exim Policy
Incentives for agriculture and marine sectors, small-scale expor-ters and high technology items are on the cards in the coming export & import (exim) policy to be announced on April 1, said commerce minister B B Ramaiah.
Announcing this at a board of trade meeting yesterday, Ramaiah sought a cut in the interest rate on export credit from 13 to 10-11 per cent from the Reserve Bank.
The net bank credit to exporters has risen from 10.6 per cent in October 1996 to 11.2 per cent in January 1997, the RBI deputy governor said.
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Exporters are seeking simplification of duty-exemption schemes, cut in import duty on Export Promotion Capital Goods (EPCG) scheme to 5 per cent, lowering the duty-exemption limit to Rs 5 crore (from Rs 20 crore) and the reintroduction of duty-free REP licences in the new policy.
They demanded the removal of all limits on technology imports and a reduction in the general value addition criterion from 33 to 20 per cent. Exporters also urged the continuation of the passbook scheme, but with a stipulation that credits should be made transferable.
The concessional customs duty on capital goods imports under EPCG scheme is likely to be brought down from 15 to 10 per cent.
However, the domestic capital goods industry is against the removal of the duty exemption limit on the plea that the move will destroy domestic industry. There are, therefore, lobbies working both for and against the duty cut on the 15 per cent EPCG and the lowering/removal of the Rs 20 crore limit. Both new and second-hand capital goods are allowed to be imported under the scheme. It has been argued by domestic capital goods companies that too many second-hand and second-rated machinery is being imported into the country at discounted duty rates.
Bajaj Auto chairman Rahul Bajaj suggested that the consumer goods imports could be allowed subject to three conditions no dumping takes place, a 3-tier rate of import duty is levied, and there is a ban on second-hand imports. This, he argued, would ensure that consumer goods manufacturers at home were not at a disadvantage.