Business Daily from THE HINDU group of publications
Thursday, Jun 14, 2007
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Business Daily from THE HINDU group of publications Thursday, Jun 14, 2007 ePaper |
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Forex Industry & Economy - Exports & Imports Kamal Nath to press for higher DEPB, drawback rates Our Bureau
MR KAMAL NATH
New Delhi June 13 In the wake of rupee appreciation and its adverse impact on export receipts, the Commerce and Industry Minister, Mr Kamal Nath, assured exporters on Wednesday that he would persuade the revenue department to increase the drawback and the Duty Entitlement Pass Book (DEPB) rates by 5 per cent. Mr Nath also announced that all arrears of Terminal Excise Duty (TED) and central sales tax (CST) reimbursement would be cleared by June 30 to provide relief to exporters reeling under rupee appreciation. A committee is also being set up to assess job losses and loss of export orders due to rupee appreciation even as the Federation of Indian Export Organisations (FIEO), an apex body representing exporter interests, claimed that 8 million jobs would be lost in the export sector this fiscal. In an interaction with FIEO delegation and chairpersons of various export promotion councils (EPCs) here, Mr Nath said the Export Credit & Guarantee Corporation (ECGC) would reduce its premia rates by up to 10 per cent to make exports more competitive. Any increase in drawback and duty entitlement passbook (DEPB) rates would come as a big relief to exporters, who have been seeking government intervention to tide over the 9.7 per cent appreciation in rupee against the US dollar in the last seven months. Mr Nath also said he would urge the Finance Ministry to reduce the rate of interest on pre-shipment and post-shipment credit for exporters to 6 per cent, against the extant rate of 9-11 per cent. Efforts would be made to mandate scheduled commercial banks to meet 15 per cent export credit disbursement target, make Exchange Earners' Foreign Currency Account (EEFC) an interest bearing account and notify service tax exemption/refunds for exports announced in the Foreign Trade Policy 2007 without further delay. Agreeing with exporters that rupee appreciation was currently a major problem, Mr Nath exhorted the exporting community to look at it also as an opportunity to enhance their competitiveness. "Rupee rise is no doubt a problem, but it is also an opportunity for all of you to move towards greater efficiency, reducing costs and enhancing competitiveness. You must also look at new markets," Mr Nath said. He expressed confidence that the resilience of Indian exporters would enable them to tide over the problems caused by the rupee appreciation and achieve export target of $160 billion set for 2007-08. The FIEO President, Mr G.K. Gupta, said labour-intensive segments such as textiles, engineering, handicrafts and agri-related sector bore the worst brunt of the appreciating rupee. He said export realisations have fallen by 12 per cent for chemicals, 6-6.5 per cent for textiles and exports are likely to dip by 20-22 per cent for processed foods and agro products, electronics and electrical items and steel products. The exporting community has also urged the Government to reintroduce income tax exemption on export profits (bring back Section 80HHC exemption). Alternatively, a 133 per cent weighted deduction has been sought against export promotion expenses such as product development, quality upgradation and market development.
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