The Hindu Business Line : ‘Hike duty credit for non-timber forest produce export earnings’

Kolkata Aug. 12 Increase in the VKUY (Vishesh Krishi Upaaj Yojana) duty credit rate to 10 per cent (from the existing 5 per cent) for non-timber forest produce (NTFP) and its value-added products has been sought to counter the adverse impact of rupee appreciation.

Non-timber forest produce

Describing NTFP as one of the key sectors for generating employment in backward villages adjoining forest areas inhabited by tribals and other weaker sections of society, the Shellac and Forest Products Export Promotion Council (Shefexil) has pointed out that the rupee impact has cut the per unit rupee export earnings of exporters by 14 per cent, leading to substantial loss of jobs and closure of many tiny and cottage sector units.

Mr Pradeep K. Shaw, Chairman of the Council, told Business Line that the Union Commerce Minister, Mr Kamal Nath, after detailed discussions with the council representatives recently, has agreed to review the matter. “The Minis ter was appreciative of our concern and has agreed to examine our proposal for increased VKUY duty credit benefit for value-added NTFP.”

Disorganised sector

Pointing out that the sector was highly disorganised, even though exports of the forest produce besides earning foreign exchange also contributed significantly towards the livelihood of tribals and other weaker sections, Mr Saraf said the recently announced benefit on packing materials was of no use, as imports by the sector was practically nil.

He felt the only relief that can accrue to this sector, to counter the ill effects of the rupee firm-up on export value realisation in rupees was the VKUY duty credit route.

He said there were some 500 units engaged in NTFP and export of its value-added products in Chhattisgarh, Andhra Pradesh, Madhya Pradesh, Tamil Nadu, Kerala, Karnataka, Orissa, Maharashtra, West Bengal, North-East region, Rajasthan, Haryana and Punjab.

Pointing out that the world demand for NTFP and its value-added products was now growing at an annual rate of 20-25 per cent, Mr Shaw said despite positive expectations, Indian exports have received a setback owing to a stronger rupee.

“We expect an export loss of nearly Rs 900 crore during 2007-08 on this count.”

On the estimated job loss in 2007-08, he said with a total number of 35,000 employees/tribals, an export of Rs 3,972 crore was achieved during 2006-07 (export earnings per employee works out to Rs 11.50 lakh).

He clarified that on the basis of above, the estimated job loss this financial year may be around 7,800.

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