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Exports may beat target by a year

BS Reporter  |  Hyderabad 

Union Commerce Secretary GK Pillai today said India's exports were expected to touch $150 billion by 2008, a year ahead of schedule. Exports for the current year are pegged at $125-130 billion.
Most of the exports would be handled electronically by the end of next year as part of initiatives to facilitate trade, he said.
Delivering a lecture instituted in the memory of Yarlagadda Sriramulu, an expert on power projects, by the Institute of Engineers on issues concerning the SEZ Act here today, Pillai pointed at the pressing need for infrastructure development to achieve higher economic growth. He also allayed concerns over the SEZ policy.
While stating that the nine-month experience of the SEZ policy had been positive in terms of attracting investment, he said the fears of threat to food security, loss of tax revenues, and credit risks on this count were largely unfounded.
Citing statistics, he said the 34,510 hectares of land under 237 SEZs cleared by the Board of Approval constituted a minuscule portion (0.000012 per cent) of the total arable land in the country and less than 10 per cent of the land being acquired by state governments for various purposes.
He said the projected revenue loss of Rs 90,000 crore through tax holidays to SEZs was much less compared with the sum of about Rs 1.5 lakh crore that would be collected by the government through indirect taxes on a turnover of Rs 15 lakh crore expected from SEZs.
"The turnover level of the present SEZs is only about Rs 23,000 crore. The question is whether to allow SEZs, which have already attracted over Rs 10,000 crore of investments in less than a year, to create so much economic activity or think of saving Rs 90,000 crore," Pillai said.
Regarding the RBI's caution to banks on lending to SEZs, he said the ministry had already written to the central bank to reconsider its stand.
"There cannot be any fly-by-night operators as the legislation has addressed most of these concerns. The Centre is empowered to take over the land if an SEZ developer goes bankrupt," he said, adding that the commerce ministry was yet to receive a response from the RBI in this regard.
Commenting on the Left's views on providing an upper limit on the area for multi-product SEZs, he said the government intended to leave the issue to market forces.
"So far, only two of the nine multi-product SEZs have been proposed to have over 10,000 hectares each. There would be several limitations to acquiring huge chunks of land. These include the question of availability. Also, state governments can decide whether a particular piece of land or acreage of farm land can be transferred to SEZs," he said.
Citing the growing importance of the services sector, including tourism, he said the country needed at least 60 international airports in the next five years to handle foreign travel and tourists visiting India, besides skilled manpower to meet the requirements in IT, infrastructure, and other growing sectors.

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First Published: Thu, November 16 2006. 00:00 IST