Financial Daily from THE HINDU group of publications
Friday, Jul 16, 2004
Financial Daily from THE HINDU group of publications Friday, Jul 16, 2004 |
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Industry & Economy
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Exports & Imports `Ignored' exporters want `something' to be done Our Bureau
Mr Rafeeque Ahmed, President, FIEO, and Mr A. Sakthivel, Chairman, FIEO Southern Region, at a press conference in Chennai on Thursday. — Shaju John
Chennai , July 15 UNHAPPY that "the Budget has completely ignored" them, exporters have reiterated their demand for a bouquet of tax breaks and simplification of procedures. The Federation of Indian Export Organisations is hoping that "something would be done before the Finance Bill is passed." The FIEO wants, among other things, extension of income-tax benefits under Section 80 HHC, introduction of export marketing allowance scheme under Section 35 B of the Income-Tax Act and a refund of service tax paid by companies engaged in export or services. The Section 35 B, introduced in 1968 and withdrawn in 1987, allows 133 per cent of the money spent on overseas market development expenditure, as an expenditure allowed for calculating income-tax. The Federation also wants the Government to "alternatively think of" another provision, Section 35 A, which allowed 133 per cent of investment ploughed back into business for arriving at the taxable profit. The FIEO President, Mr Rafeeque Ahmed, told journalists here on Thursday that with the rise in oil prices and the consequent increase in India's import bill, "unless exporters are taken care of," the trade deficit will increase. He noted that Indian exporters have to contend with hurdles such as an appreciating rupee and competition against China, which has a fixed rate of exchange. The FIEO also called for a "dollar window," under which the RBI could refinance bank's foreign currency loans to exporters, out of the foreign currency reserves. Exporters want foreign currency loans because they are cheaper, but banks do not have enough dollars to lend to them. The Central bank has denied this benefit, saying that the reserves could not be used for such purposes without amending the RBI Act. "Then they should amend the RBI Act," Mr Rafeeque Ahmed said. The FIEO has another grouse. Leave alone cheap foreign currency loans, even the rupee loans for exporters are not getting any cheaper.
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