Exporters may get Rs 2,000 cr

Event Date: 6-Dec-08

New Delhi: In order to help the export community ride out the impact of economic downturn, the government has prepared a stimulus package of Rs 2,000 crore for the sector. Export sector which has fallen by 15% from a year earlier in November, is likely to announce reliefs like 2% subsidy to micro, small and medium exporters across the board. In addition, a 2% subsidy for textile, marine, handicraft, leather, carpet sectors is also expected according to sources in the ministry of commerce. This, according to sources, is likely to cost the exchequer around Rs 600 crore. 

    However, the bigger sop for the exporters might be the Income Tax waiver under Section 80 HHC of the Income Tax Act. The government might reintroduce Section 80 HHC of the Income Tax Act which provides exporters exemption from Income Tax on their income. Even though, an income tax waiver could mean a revenue loss of between Rs 10,000 and 15,000 crore to the exchequer, the government is likely to go ahead with it as it will be a substantial incentive for the exporting community. 
    Additionally, a Rs 300 crore booster for schemes such as Market Development Assistance (MDA) and Market Assessing Scheme (MSA) has been earmarked with a view to helping the exporters develop new markets. This will be applicable to all exporters. Another Rs 800 crore is likely to be earmarked for the Technology Upgradation Fund according to sources. 
    In addition to these, the exporting community also expects Rs 350 crore to be given to the Export Credit Guarantee Corporation (ECGC) for continuing the single buyer policy. G K Gupta, president of the Federation of Indian Exporters Organization said since ECGC was not interested in continuing the single buyer policy, this booster will force them to take this scheme. This will be applicable for all levels of exporters. Other export relief measures may include increased duty drawback rates used by exporters to get back duties like excise paid on producing goods for overseas sales. Moreover, an extension of period of postshipment export credit from 180 days at present to about 270 days may also be also on the cards. 
    Indian goods’ exports fell for the first time in five years in October and are likely to stay sluggish for the rest of the year, making it difficult for the country to meet its target, said sources. Therefore, amongst the other packages being announced by the government, exports will also get a leg up by the government. 
    Additional export relief measures may include increased duty drawback rates used by exporters to get back duties like excise.

Source: TOI, Page 14, Dated 6-Dec-08