The Hindu Business Line : Restore target plus scheme benefits to exporters: FIEO

The Federation of Indian Export Organisations (FIEO) has urged the Prime Minister, Dr Manmohan Singh, to direct the Commerce Ministry to restore the benefits that were available to exporters under the Target Plus Scheme (TPS) for exports effected during fiscal 2005-06.

The exporting community has represented to the Prime Minister that the Commerce Ministry's move of June 12 to prescribe a uniform entitlement of 5 per cent of the incremental exports achieved during April 1, 2005 to March 31, 2006, would place them under financial crunch.

TPS is an export promotion scheme aimed at rewarding those exporters who achieve a minimum export growth of 20 per cent in a licensing year.

Avoiding conflict

The FIEO, a representative body of the exporting community, has now said that the Prime Minister's intervention to restore the benefits due to the exporting community would also eliminate any possible option of legal conflict between the Government and the exporting community.

"The exporting community has already factored the likely benefit of 10-15 per cent under the TPS while doing the costing and accordingly passed on the same to the buyers to become competitive. The retrospective reduction in the entitlement rate of TPS would severely affect the exporting community and they are likely to suffer major losses," Mr O.P. Garg, FIEO President, said in a letter to the Prime Minister

Changing policies

Stating that the credibility of the policy is also under question in the minds of the exporting community, the FIEO letter has expressed concern that policies are being changed frequently without giving time to the exporting community. It has also noted that policies are being changed with retrospective effect to the detriment of the exporters.

As per the TPS introduced in April 2005, the exporters showing export growth between 20-25 per cent were entitled for 5 per cent benefit under the TPS, those showing growth between 25-100 per cent were entitled for 10 per cent and beyond 100 per cent were entitled for 15 per cent. The Department of Commerce had in February 2006 excluded certain products such as gems and jewellery, ores and minerals and cereals from the benefits under the TPS.

In the Annual Supplement to the Foreign Trade Policy notified on April 7, 2006, the scheme was withdrawn for exports made from April 1, 2006.

However, exporters were entitled to claim the benefit for exports made during 2005-06.

On June 12, the Directorate General of Foreign Trade through an executive order did away with the 10 per cent and 15 per cent entitlement slabs and specified a uniform 5 per cent for the incremental growth achieved in 2005-06.

Industry sources said the Government's move to curtail benefits for 2005-06 on a retrospective basis would result in savings of about Rs 1,500 crore to the revenue department.

More Stories on : Exports & Imports | Industry Associations

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page