Full remission of duties and taxes for exporters, says Nath

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New Delhi, Nov 17 : Exporters will soon get a relief package from the government, including a complete remission of duties and taxes, both local and state, as well as easier availability of cheaper credit.

A fiscal package for exporters, who are hit by the global financial crisis and the demand slowdown in their biggest markets like the US and the European Union, and other monetary measures to limit the impact of the global financial crisis on the Indian economy was discussed on Monday by Prime Minister Manmohan Singh with finance minister P Chidambaram, commerce and industry minister Kamal Nath, Planning Commission deputy chairman Montek Singh Ahluwalia and RBI governor D Subbarao.

Earlier in the day, talking to reporters on the sidelines of the World Economic Forum India Economic Summit, commerce and industry minister Kamal Nath said the government was looking into the recent fall in growth in export and the need to review the ambitious target of $200 billion for this fiscal.

“We (the Centre) are going to look at how a level-playing field can be provided to our exporters. This means a total remission of duties and taxes both local and state to ensure that the exporters are not at a disadvantageous position vis-à-vis competition,” he said.

For the first time in five years, India’s total exports in dollar terms contracted recently. Exports in October shrunk 15% compared to October last year, measured in dollars. This means India will most likely miss its annual export target of $200 billion. Exports during April-October this fiscal were worth $107.2 billion, a 21.5% growth over the same period last fiscal. The average growth of exports in the first five months of this fiscal was 35%.

“Right now we are on track. The next five months will determine whether we will be able to meet the target. This again depends on the revival of the western economies,” Nath said.

The high-powered committee constituted by Prime Minister Manmohan Singh met on Monday evening to take a final call on the commerce ministry’s demand for a total remission of taxes and duties like octroi, electricity duty and central sales tax.