But fiscal constraints limit Sharma’s largesse to Rs 1,000 crore.
Commerce & Industry Minister Anand Sharma on Monday stuck to the theme of his five-year Foreign Trade Policy, but used the fragile global economic recovery to dole out sops worth over Rs 1,050 crore to exporters.
Sharma spent nearly half his speech on the weak global economic revival and the steps that the government had announced last year. Given the fiscal constraints, to which he himself admitted, he used 10 of the 27 paragraphs in his 12-page speech that lasted 30 minutes to announce incentives that were largely extensions of existing schemes.
There were some statements of intent, too, such as reducing transaction costs, which several of his predecessors had also promised. But unlike his predecessors, Sharma said that transaction costs would be cut by at least 40 per cent.
Overall, the theme seemed to be of continuity. So, he used the annual review to extending the ambit of export promotion schemes to include some of the laggards such as textiles and engineering and the aam aadmi-focused ones such as handicrafts, handlooms and leather. In several cases, such as the Duty Entitlement Passbook scheme (a popular duty refund tool), the validity period was extended.
At the same time, Sharma said that DEPB is getting a final extension, up to June 2011. The scheme, which is seen to be incompatible with World Trade Organisation norms, has been on periodic life support for nearly five years, with successive trade policy announcements talking of replacing it. This time, the uncertain global environment gave the scheme a final breath of oxygen.
| TRADE POLICY HIGHLIGHTS # DEPB scheme extended to June 30, 2011 # Several sectors get 2% interest subvention # Zero-duty EPCG scheme extended by a year # 2 per cent bonus for 135 products under FPS # Steps announced to reduce transaction costs # Govt confident of $200 billion exports this year |
“I am not certain if it (steps announced on Monday) is great news. But it represents the best we can do,” added Commerce Secretary Rahul Khullar.
While Sharma appeared worried about the pace and shape of the global recovery, he was optimistic of achieving the $200-billion export target set for the current financial year, a rise of 12.35 per cent over last year’s shipments worth $178 billion.
In the first four months, exports have grown by 30.1 per cent to $68.6 billion.
The government’s expectation is that exports will be fully on track by 2014, the terminal year of the current Foreign Trade Policy, and it expects 25 per cent annual growth. Apart from the economic environment, protectionist policies could play spoilsport.
With measures such as visa restrictions on the rise and little sign of progress on the Doha round of trade liberalisation, Sharma also used the policy to announce India’s intent to use bilateral treaties to push goods and services into foreign markets.
