Budget, Exim policy proposals discussed

NEW DELHI, JUNE 28. The Commerce and Industry Minister, Kamal Nath, today discussed the budget and Exim policy proposals with the Finance Minister, P. Chidambaram, to ensure that both are well integrated and exports are given a boost. Disclosing this here today after a two-hour long meeting, Mr. Kamal Nath said leverage had to be provided to enable higher export growth. The meeting was held even as exporting organisations such as the Federation of Indian Export Organisations (FIEO) had been urging that various fiscal incentives need to be provided to pep up export growth.

Among the issues raised in the run up to the budget by the FIEO is the need to treat domestic tariff area units on a par with export oriented units and to continue with the duty entitlement passbook (DEPB) scheme. Worried about the impact of regulations of the World Trade Organisation on schemes perceived as export subsidies, it has suggested that the scheme should continue as otherwise exporters face unequal competition abroad. Another plea made over the past few years has been for restoration of the 100 per cent tax exemption on export profits under Section 80 HHC of the Income-tax Act.

Though the Commerce Ministry is making a plea for such tax exemptions, the Finance Ministry is clearly opposed to offering such incentives. In any case, the Finance Minister is believed to be opposed to exemptions as a rule and is studying existing ones with a fine tooth comb with a view to weeding them out. Exporters thus may not be able to look forward to any relief on this score.

However, Mr. Kamal Nath has already declared that efforts will be made to ease procedures to make exports easier. He proposes to unveil a National Foreign Trade policy by the end of July along with the Exim policy to bring India's exports to the target of one per cent share of world trade.

Recommended for you