Trade Bodies Hail Package
Trade organisations led by the Federation of Indian Export Organisation (FIEO) and apex industry chambers yesterday welcomed the government's package to boost exports, but the Engineering Export Promotion Council struck a discordant note by saying it was "disappointed".
EEPC president P K Shah said, "We had lot of expectations from the commerce minister. There is nothing in the package beside the reduction in the rates for pre- and post-shipment credit. All the minister has done is to simplify procedures. I do not think the package will help reverse the decline in exports in the immediate future."
"Under the Export Promotion Capital Goods scheme, the zero-duty entitlement is Rs 20 crore. We wanted this to be reduced to Rs 1 crore and the commerce minister had promised us in May that this would be done. But it is not there in the package," Shah said.
But the FIEO welcomed the package, saying it would boost morale of the exporting community since several "much awaited" demands of the exporters had been met albeit partially.
The Association of Chambers of Commerce and Industry said it was an "honest effort to redress some of the major concerns of the exporting community".
The Confederation of Indian Industry called the package a "landmark" and complimented the commerce minister for the growth-oriented export package.
The Federation of Indian Chambers of Commerce and Industry said there were redeeming features in the package that could help stimulate exports. Ficci president K K Modi said, "Having targeted at 20 per cent growth in exports in dollar terms, the export sector has to be more dynamic and pragmatic steps have to be taken to revamp the infrastructure sector, particularly in improving the port handling facilities for exports and for expeditious movement of export cargo."
FIEO president Ramu S Deora took special mention of the following steps: reduction in the pre- and post-shipment rates from 11 per cent to 9 per cent; payment of interest on delayed (beyond two months) disbursement of exporters' dues on account of duty drawback or refund of terminal excise duties legal undertaking facility for manufacturer-exporters having good track record of exports; facility of single mother bond on annual basis instead of giving separate bond for fulfilment of different obligations with the excise and customs authorities and allowing manufacturer-exporters with specified turnover, clearance of goods on the basis of self-certification.
Assocham president L Lakshman said the commerce minister had rightly identified the cost of export finance as the main culprit for the slowdown in export growth. "By bringing down the interest rate on export credit from 11 per cent to 9 per cent, credit will now be available to exporters at a rate comparable with their counterparts in competing nations. It will also minimise the incidence on exports by 4.5 per cent in the overall total disability incidence of 26 per cent," Lakshman said.
CII president Rajesh V Shah felt the need to operationalise the India Brand Equity Fund is among the outstanding demands. The CII president noted that the weak brand equity of India and Indian products was significantly hampering export growth, and also called for the immediate need torevamp the institutions involved in the export cycle.
Ficci president Modi said the Duty Entitlement Passbook (DEPB) scheme had to be more broadbased so as to include the unrebated commodity taxes being levied by the state governments. Also, EPCG scheme under the lower threshold limit of Rs 1 crore should cover all extreme focus items.