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G. Srinivasan

Mr Dipak Chatterjee

NEW DELHI, April 2

ENCOURAGED by the consistently salutary export performance for most of the just-ended 2002-03 fiscal, the Commerce Ministry proposes to finalise the export target for the current fiscal by the end of this month or early month, after weighing carefully the evolving external situation and also domestic supply position.

Disclosing this to Business Line here in an interview, the Commerce Secretary, Mr Dipak Chatterjee, said that he intends on convening the meeting of all export promotion councils as also commodity boards to take stock of the situation and also review of their performance to fix a realistic export target for the fiscal 2003-04.

He said that in a recession year, the country's exports could exceed $50 billion last fiscal; export performance would definitely be better in the current fiscal.

Asked about the follow-up to the Export-Import (Exim) Policy for 2003-04, Mr Chatterjee said that in three important areas, the Commerce Ministry would hold talks with the Finance Ministry to get details for the schemes announced. These include, he said, evolving suitable tax incentives contributions to venture capital funds that would provide finance to entertainment industry, enabling corporate to make investments in farm infrastructure, agricultural extension, processing, packing, storage, R&D through fiscal sops in the agro export processing zones (AEZs) and also to provide analogous incentives in the special economic zones (SEZs) to export oriented units (EOUs) in selected sectors with capital investment in plant and machinery over Rs 25 crore.

To a query as to how different the modified Exim Policy, the Commerce Secretary said it "does not depart but it adds" to the five-year main policy framework (2002-07) announced in March 31, 2002. "Keeping in view the changed circumstances, we have tried to refine and add a bit more and the thrust to services is clearly a new addition". Both providing incentives to corporate in the implementation of AEZs and alterations in the Export Promotion Capital Goods (EPCG) scheme were "refinement".

Mr Chatterjee dismissed the fears over the entry of MNCs in AEZs, depriving domestic companies from taking the benefits intended to increase investment in these zones for boosting farm productivity and farmers' welfare.

He said the States have to rope in corporates. If they did not have any "fixation" and MNCs do extend help to domestic farmers, there is nothing wrong "since money has no colour", he added.

When his attention was drawn to frequent changes in a ritualistic fashion in the Exim Policy, he remarked "we can't set a policy for all time to come. Suppose we make a mistake — it is possible to make mistakes and there is room for misuse. So the policy is constantly updated, revised, refined and to stop misuse, everything is looked at carefully".

In response to a question about over-emphasis on SEZs, which are yet to get off the ground other than the converted export processing zones (EPZs) into SEZs, he observed, "We are trying to give all the facilities to SEZs which are given in other countries for similar zones. Even in China, it took seven years to really get the fruits of SEZs. We have only announced the SEZs in 2000 and some of them started only 2002 and this year we are giving the final touches including a Central legislation and we hope the package will be complete this year".

Mr Chatterjee refused to be drawn into details of the components of the Central legislation, as the whole thing has to be cleared by the Cabinet and Parliament. He said that on an average units in the EOUs/EPZs contribute by way of export receipts Rs 26,000 crore annually out of which Rs 9,000 crore were from EPZs (now SEZs) and only three per cent of their export wares were sold in the domestic tariff area.

He said the market access initiatives launched two years ago still had some teething problems and "we need clearance at a high level. However, the Government did disburse money in the previous and in the last fiscal though the new features could not be operatioanlised, which we hope to get over this year."

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