The Hindu Business Line : Subsidy outlay for rubber exports in 10th Plan hiked by Rs 27 cr

THE Centre has stepped up the subsidy outlay for the export of natural rubber by Rs 27 crore for the remaining period of the 10th Five-Year Plan from Rs 36.5 crore to Rs 63.77 crore, a Commerce Ministry official said.

The subsidy outlay was hiked after the original allocation of Rs 36.5 crore for the entire five-year plan period was exceeded during the first three years alone through a steady increase in rubber exports, he said.

"The increase in subsidy outlay has been approved by the Planning Commission and the Finance Ministry," he said.

Fund crunch was one of the main reasons that forced the Union Government to cut the subsidy for the export of various grades of natural rubber by half for the current fiscal.

Through a recent notification, the Commerce Ministry axed the subsidy for export of RSS from Rs 3.50 per kg to Rs 1.75 while that for TSR (block rubber) was pruned from Rs 5 to Rs 2.50.

In the case of centrifuged latex, the subsidy element was scaled down from Rs 4.50 per kg to Rs 2.25. However, unlike in the past, the subsidy this fiscal is not linked to any minimum quantum of exports.

Though the Government has revised upwards the subsidy outlay for the 10th Plan period, the Commerce Ministry reckons that rubber exports this fiscal will take place "without much incentives" being given to the growers.

"Resources are required to run the subsidy scheme for the remaining period of the Plan. The additional outlay will also be utilised to fund the spill-over during the first three years when the actual subsidy on account of exports touched around Rs 44 crore, against the original allocation of Rs 36.5 crore," the official said.

The incentives provided by the Government boosted rubber exports significantly from a mere 6,900 tonnes during 2001-02 to 75,094 tonnes in 2003-04.

The subsidy was reviewed after the exports for the last two years alone exceeded the target of 1,00,000 tonnes for the entire five-year plan period.

"As a result, the growers were not paid since the excess subsidy outgo required approval from competent authority," the official said.

Against an export target of 50,000 tonnes for the current fiscal, so far about 23,000 tonnes have been exported. The surge in exports also helped in improving the domestic rubber prices, though it is still ruling a few notches below the global level.

The Export Promotion of Natural Rubber scheme was introduced to help establish India as a regular exporter of rubber in the international market. Until a few years ago, India was a net importer.

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