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Estimating a robust rise of 15 per cent in goods exports in 2017-18 — which could increase outbound shipments to an all time high of $316 billion — Finance Minister Arun Jaitley has increased allocations under the interest equalisation scheme (IES) and remission of state levies (ROSL) for exporters.
While there are no announcements directly benefiting a specific sector, exporters are positive about the higher allocations for IES and ROSL in Budget 2018-19 and are hopeful that more members of the community would benefit from the schemes as the rate of compensation remains unchanged. “The increased allocation from ₹1,100 crore to ₹2,000 crore for the IES for the current year and ₹2,500 crore for 2018-19 would help the export sector as it gives cushion to include merchant exporters and services exporters,” said Ganesh Kumar Gupta, President, FIEO.
Under the IES, exporters are provided bank loans at lower interest rates with the Centre compensating the banks for the difference in rates.
More allocation
Similarly, enhanced allocation for ROSL, which compensates exporters for State levies, from ₹1,555 crore to ₹1,855 crore for the current fiscal and ₹2,164 crore for the subsequent fiscal will not only help in clearing the backlog but could also be used to extend the benefit to carpets, handicrafts and fabrics and yarn exports, Gupta added.
The imposition of 20 per cent export duty on graphite electrode has made engineering goods exporters unhappy.
“It is not clear why 20 per cent export duty has been levied on graphite electrode. This is contrary to the policy of the government to give an impetus to exports. The emphasis should be on removal of inverted duty structure on the import side wherein the priority should be to have more duty on finished products while raw material should be subjected to the lowest duty structure,” said Ravi Sehgal, Chairman, EEPC.
The extension of fixed term employment facility for all sectors is also expected to benefit exporters. “It will allow exporters to provide additional jobs as and when they get export orders particularly in sectors where the demand is seasonal in nature,” Gupta said.
At the projected growth rate of 15 per cent, exports in 2017-18 would increase to $316.85 billion which is higher than the previous high of $314 billion in 2013-14.
Last year, exports had increased by 5.17 per cent to $275.85 billion after two successive years of fall in outbound shipments.
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