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P. Manoj

New Delhi , Nov. 19

THE Centre issued a notification on Friday on subsidy for the export of various grades of natural rubber. However, it has cut the subsidy by half for the current fiscal.

The subsidy for export of RSS has been cut from Rs 3.50 per kg to Rs 1.75, while that for TSR (block rubber) has been pruned from Rs 5 to Rs 2.50.

In the case of centrifuged latex, the subsidy element has been scaled down from Rs 4.50 per kg to Rs 2.25, according to a Commerce Ministry notification.

Since 2001, the Government has extended a subsidy to exporters through the Export Promotion of Natural Rubber scheme.

"The idea behind the subsidy scheme was to help establish India as a regular exporter of rubber in the international market. For this, rubber exporters need assistance in the initial period to improve quality, packaging, and for internal transportation up to the ports including terminal handling charges," a Commerce Ministry official said.

From a net importer of rubber, India has been an exporter for the last three-four years.

"It is a misnomer to call it a subsidy. It is, in fact, an incentive given to exporters for carrying out certain work," he said.

With the Government adopting a medium-term strategy of five years for rubber exports, it was only natural to continue with the export incentives, he said.

"We cannot be a fair-weather-friend in the international market. To be a regular exporter, we need to continue with the export incentives for a reasonable period to stabilise our position in the global market," he said.

The Finance Ministry was opposed to the continuation of incentives for export of rubber, but was persuaded by the Commerce Ministry to extend the subsidy.

Against an export target of 50,000 tonnes for the year, India has so far exported about 23,000 tonnes this year.

The official said the export incentives have worked well with exports picking up from a mere 6,900 tonnes during 2001-02 to 55,311 tonnes in 2002-03 and 75,094 tonnes in 2003-04. The surge in exports has also improved the domestic prices of rubber.

Growers have argued that without subsidies, exports would become unviable as the price differential between Indian and international rubber has narrowed considerably.

Domestic rubber production is estimated to grow by 7 per cent during the year to reach 7.62 lakh tonnes.

More Stories on : Agricultural Policy | Exports & Imports | Rubber

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