The Hindu Business Line : Exporters get second stimulus package

New Delhi, Jan. 2 With the country’s exports growth plummeting for the second month in succession in November 2008, the Government has announced a series of measures including provision of pre-shipment and post-shipment credit in rupee or dollar at competitive rates, extension of duty neutralisation scheme till end-December 2009 and a Committee to address procedural problems plaguing exporters.

As part of its “substantial counter-cyclical stimulus,” the Government announced that the Export-Import (Exim) Bank of India has obtained a line of credit of Rs 5,000 crore in order to provide pre-shipment and post-shipment credit in rupee or dollar to the exporters at “competitive rates”.

Pre-Nov DEPB rates

As the rupee has appreciated nearly four per cent against the dollar since November 2008, the Government has restored Duty Entitlement Pass Book (DEPB) rates to those prevailing prior to November 2008.

Further, with a view to imparting predictability and stability of policy regime in the short term for future contracts, the DEPB scheme would be extended till end-December this year.

Thirdly, duty drawback benefits on certain items including knitted fabrics, bicycles, agricultural hand tools and specified categories of yarn were being enhanced to take effect retrospectively from September 1, 2008.

Finetuning procedures

As exporters have raised a host of procedural hassles where fine-tuning of procedures could cut down delays, it has been decided to set up a Committee under the chairmanship of the Finance Secretary including Secretaries of the Departments of Revenue and Commerce to consider these issues and resolve them on “a fast-track basis”.

It may be noted that on December 7 the Government announced some relief to exporters in the form of interest rate subvention and additional allocation for refund of Central Sales Tax/Terminal Excise Duty to exporters.

FIEO UNHAPPY

However, reacting to the stimulus package for exporters announced on Friday, the new President of the Federation of Indian Export Organisations (FIEO), Mr A. Sakthivel, said, “exporters are disappointed at the measures.”

He said the exporters sought 3 per cent increase in both drawback and DEPB rates, additional 2 per cent interest subvention as was provided when rupee appreciated in 2007 and moratorium on term-loans to exporters for two years.

He said unless these measures are put in place, the high job losses in manufacturing sector and labour-intensive export industries could not be averted.

He said only on January 1, 2009, China has increased VAT refund rates to 17 per cent to exporters and in the absence of any such incentives, Indian exporters would be hard put to compete with neighbouring countries in an increasingly shrinking export markets.

More Stories on : Exports & Imports | Policy | Economy

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

Stories in this Section
Cold wave over northwest as fog cover hangs

Suzlon Energy sells 10% stake in Hansen

UPA’s final booster dose for economy

Assets under management of mutual funds move north in December

Hyundai, Honda buck the trend

Motherson Sumi to buy Europe’s Visiocorp

Tata Motors commercial vehicle sales dip 51% in Dec

Govt waives divestment condition for PepsiCo

Vendors seen financing project starts for clients

New royalty rates for uranium mining in States

Banks to benefit from latest fiscal and monetary measures

Analysts see execution as key to stimulus success

Markets this week

RBI cuts key rates further

Exporters get second stimulus package