The Hindu Business Line : Shefexil seeks extra 10% sop in Vishesh Krishi scheme

Kolkata, July 15The Shellac and Forest Produce Export Promotion Council (Shefexil), whose members have taken a hit because of the 10 per cent rupee appreciation since March, has sought additional Vishesh Krishi Upaj Yojana (VKGUY) incentive of 10 per cent to Indian exporters of minor forest produce (MFP).

The council, to tide over the crisis caused by the sharp rupee appreciation, has also sought higher drawback rate of 10 per cent against the existing 2 per cent, for shellac.

Under the new package, drawback rate for shellac has been raised to 4 per cent, which is cited as inadequate. Duty Entitlement Passbook Scheme (DEPB) is essentially neutralisation of basic customs duty suffered on inputs of an export product, with the two primary components of basic duty and value addition.

‘Inadequate incentives’

Pointing out that apart from the relief on packing materials, there was nothing else for exporters of shellac products and minor forest produce in the incentives package announced on Thursday by the Government, Mr Pradeep K. Shaw, Chairman of the council, said MFPs were purely export-oriented commodities, wherein more than 85 per cent of the total production was exported.

Suggesting that the net foreign exchange earning from MFPs and shellac products was nearly 95 per cent, Mr Shaw said the industry has been in a severe crisis during the last three months, when the rupee has appreciated substantially against the dollar, affecting members’ export realisation in rupee terms.

“This has compelled the Indian exporters of MFPs to quote a higher price, resulting in a substantial drop in export demand for this produce,” he said.

Seeking urgent remedial measures to maintain the tempo of export of MFP for earning the much needed foreign exchange, he said the sector provides employment and livelihood options to poor tribals/weaker sections of society numbering several lakhs. Mr Shaw said the council has a membership of 450, ensuring an estimated total employment of 36,000, with jobs in SMEs accounting for nearly 11,000.

He said as per current projections, exports of shellac and MFP during 2007-08 may drop by 15-20 per cent.

The estimated job loss, however, will vary from unit to unit.

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Shefexil seeks extra 10% sop in Vishesh Krishi scheme