The Hindu Business Line : Anand Sharma to push for export sops in Budget

The Union Minister for Commerce and Industry, Mr Anand Sharma, and the Commerce Secretary, Mr G.K. Pillai, at a press conference in the Capital on Wednesday.

Our Bureau

New Delhi, June 3 Concerned over the continuing downtrend in the country’s exports in the first two months of this fiscal, the Commerce Ministry today held a brainstorming session with several export promotion councils to devise incentives for the sector reeling under the impact of the global slowdown.

Addressing a news conference here after the meeting, the Union Commerce and Industry Minister, Mr Anand Sharma, said that the negative export growth might persist for some more time but the Government would work to “minimise the impact of global slowdown”. In the run-up to the Union Budget 2009-10, to be presented next month, he would take up the issue of incentives for the export sector with the Finance Minister, Mr Pranab Mukheree.

He would seek specific thrust and incentives for handlooms, textiles, leather and plantation industries, as also for labour-intensive manufacturing units. He would pitch for sector-specific spurs to help domestic exporters and manufacturers bear the brunt of decline in overseas and domestic demand.

The Minister also made a case for banks to cut lending rates, even while reassuring the exporting community of all efforts to cut down the transaction cost and to ease procedures.

30% drop seen in May

Later, talking to reporters, the Commerce Secretary, Mr Gopal K. Pillai, said that the quick estimates for May too show exports declining some 30 per cent, as in April. The trend would continue till August, before exports get back on the growth track. The May export figures will be officially out on July 1, with a lag of two months.

Pricing problems

Talking to Business Line, the Federation of Indian Export Organisation (FIEO) president, Mr A. Sakthivel, said that if the declining trend continues, the export growth in the first half of the current fiscal would nosedive 15-20 per cent in dollar terms against last year’s first half performance of 30 per cent plus export growth. Though trade inquiries were pouring in, pricing remained a major problem. The huge stimulus extended by competitors such as China, Vietnam, Thailand, Bangladesh had distorted prices, he said, adding that is why “we seek fiscal and no-fiscal measures to underpin India’s competitiveness in trade.”

The FIEO has sought the abolition of the fringe benefit tax, service tax exemption and continuation of interest rate subvention across the board.

The Export Promotion Council for EOUs and SEZs too presented a wish-list to the Minister seeking extension of sunset clause for income-tax exemption for five years, withdrawal of applicability of Minimum Alternate Tax on EOUs and extending benefits of Vishesh Krishi and Upag Yojana Scheme, focus market scheme, focus product scheme and hi-tech export promotion scheme, besides simplification under EoU schemes. The Apparel Export Promotion Council also made a presentation to rev up the $10-billion industry.

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