Exporters have not brought to scrutiny export receipt certificates (ERC) of 10 lakh bales of cotton registered for overseas shipment.
At the time of imposition of ban on cotton exports on March 4, which had led to a huge outcry, the government had registered nearly 130 lakh bales for exports. The government, subsequently, lifted the ban on March 12 but ordered a scrutiny of export receipt certificates (ERCs) to get to the root of the sudden spurt in exports that caught it unawares. The Empowered Group of Ministers (EGoM), headed by Finance Minister Pranab Mukherjee, which met on Tuesday (April 10), had been informed of the failure of exporters to turn up for the scrutiny of nearly 10 lakh bales registered with the Director-General of Foreign trade (DGFT).
Senior officials in the Ministry, as well as in the DGFT said their stand on artificial spurt in cotton exports and scrutiny of self consignments, especially the ones to China, had been vindicated as out of the pending 35 lakh bales of cotton registered at the time of imposition of ban, only 25 lakh have turned up for validation or scrutiny of their ERCs. “Nearly 10 lakh bales registered for exports have not turned up for scrutiny, indicating that fraudulent exports were taking place and there was an attempt to export and hoard the commodity before selling it at a higher price later on. We continue to pursue to the matter to the logical conclusion,” a senior official said.
Similarly, the EGoM had also taken a decision to create a buffer stock of cotton to shield the country from any kind of artificial spurt in prices. The Cotton Corporation of India (CCI), which has a Rs.4,000-crore fund at its disposal for market intervention scheme, has already started purchasing cotton from the markets for the creation of 10 lakh bales buffer stock. “CCI has, in the last two days, intervened and purchased around 1.50 lakh bales and will continue to do so till it creates the sanctioned buffer,” a senior official added.