The Hindu Business Line : Subsidy for rubber exports may continue

THE Government is likely to extend the subsidy given to rubber exports next fiscal, as the it is in favour of offering such an incentive to the exporters.

Despite protests from tyre manufacturers, who say that the subsidy has led to soaring rubber prices in the domestic market, the Government is understood to have decided to continue with the scheme in 2004-05, according to official sources.

The amount of subsidy given per kg and the total volumes for which the subsidy will be applicable are to be worked out. The sources said the subsidy per kg was likely to be less than what was offered in 2003-04.

In the current fiscal, a subsidy of Rs 3.5 per kg is given for the RSS (ribbed smoked sheet) 4 and Rs 5 for block rubber, for exports up to 50,000 tonnes. These rates are likely to go down in the next fiscal.

The Government offered the subsidy in a bid to boost exports when rubber prices were ruling low besides improving the prospects in the global commodity markets. At the time of introducing the subsidy, the target was to achieve exports of one lakh tonnes during the 10th Five-Year Plan.

However, this target was surpassed in just two years. India's rubber exports in the last fiscal was 55,000 tonnes while this year it has already crossed 67,000 tonnes.

This surge in the volume of exports, coupled with increase in rubber prices in the domestic market, has led to questions on whether there is a need to continue with the subsidy.

The tyre makers are demanding that this subsidy be withdrawn, while farmers and exporters say that the incentive is a prerequisite to hold the prices at the current level and to take India's position in the international markets to new heights.

The Government is expected to take a decision soon on whether or not to extend the subsidy to the additional 17,000 tonnes exported in the current fiscal, the sources said.

More Stories on : Rubber | Exports & Imports

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

Stories in this Section
`Time to tap potential of commodity futures'

NCDEX plans futures trading in 5 more commodities by month-end

Cauvery farmers look to alternative cropping systems

Rubber unchanged on dull trading

Subsidy for rubber exports may continue

Exporters help sustain Coonoor tea auction

Tea break

Milk production up in Perambalur dt.

Tobacco auctions disrupted in AP

Govt defends move to declare NDDB as PFI

`Strengthen framework for commodity futures'

New Delhi to host meet on medicinal plants

Agriculture almanac from ANGRAU