Commerce Ministry pushes to retain stimulus measures

The Commerce and Industry Ministry has urged the Finance Ministry to retain the stimulus package in the forthcoming budget, stating that its withdrawal may “unsettle” the industry and impede the growth momentum.

In its budget proposal, the Commerce Ministry has suggested that the fiscal incentives given to the industry in 2009-10 in the wake of the global economic downturn be continued.

“The same level of CENVAT (excise duty) should be continued for some more time, otherwise it may unsettle the industry and impact business calculations in such a way as to disrupt the pace of industrial growth,” the ministry said.

The government had reduced excise duty by 6 per cent across-the-board and service tax by 2 per cent in different phases, beginning December 2008, to boost domestic demand which was impacted due to the global financial meltdown began in October 2008.

The other demands include continuation of the 2 per cent interest subsidy to extended to exporters and extension of the export-oriented unit schemes beyond the 2010-11 fiscal.

The ministry has also sought income tax exemptions to all export promotion councils.

Commerce secretary Rahul Khullar had met revenue secretary P.V. Bhide in this regard last month. Since it is the Finance Minister Pranab Mukherjee who has to take a final call on these proposals, Commerce and Industry Minister Anand Sharma would meet Mukherjee soon to press for the concessions in interest rates and indirect taxes.

The country’s exports came under severe pressure since October 2008 and kept contracting till October 2009.

During April-December of this fiscal, merchandise exports declined by by 20.3 per cent to USD 117.58 billion from USD 147.56 billion in the same period last fiscal.

However, since November 2009 the exports sector returned to growth for the first time in 11 months, and in December even imports began to grow.

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Printable version | Feb 18, 2020 9:00:35 PM |

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