The Hindu Business Line : Kamal Nath meets Chidambaram — Integrated approach for export growth discussed

THE Commerce and Industry Minister, Mr Kamal Nath, on Monday called on the Finance Minister, Mr P. Chidambaram, to discuss various policy measures that are likely to be unveiled in the forthcoming Budget and the national foreign trade policy (NFTP) of the UPA Government.

NFTP that would go beyond the Exim Policy and outline the game plan for enhancing the country's share in global trade is likely to be unveiled by end July.

Emerging from a two-hour meeting with the Finance Minister at the North Block, the Commerce Minister told presspersons that the main intent behind the meeting was to see the Union Budget and the Exim Policy (which would be part of the NFTP) are "well integrated" to give a fillip to the export growth of targeted sectors like non-IT services.

Mr Kamal Nath, however, declined to elaborate on any of the proposals that were discussed at the meeting. He pointed out that the exporting community have already submitted their "wish list" to the Commerce Ministry as well as the Finance Ministry.

"The question now is to see what leverage (fiscal incentives) can be provided to enable export growth", Mr Kamal Nath said.

Indications are that the Commerce Minister had in his meeting with the Finance Minister raised a host of issues including taxation of export profits, taxation of transfer/sale of DEPB licences and taxation of services exports.

Exporters have been calling for the restoration of Section 80HHC deduction under the Income-Tax Act. They have also been emphasising that the units operating in the domestic tariff area must have a level playing field with those in the special economic zones.

All the export promotion schemes and duty-neutralisation schemes have revenue implications. Any such measures unveiled in the Exim Policy have the concurrence of the Revenue Department, which has generally been sceptical about the trade gains achieved through grant of duty exemptions.

On their part, the exporting community have been generally complaining about the absence of better coordination between the Department of Commerce and the Revenue Department on the implementation of Exim Policy proposals. There have been a number of occasions in the past where the Revenue Department had notified its decisions much later than the policy announcements made in the Exim Policy.

"Only in the last one or two years, we have seen that the revenue side notifications are issued on the same day as the Exim Policy. An integrated approach to policy making is what we want," an exporter said.

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