How do you guarantee that policy statements on reducing procedural hassles will benefit exporters
Gujral: A very significant portion of the EDI (electronic data interchange) initiative and the reduction of transaction cost is the early implementation of the e-trade project. This is monitored on a regular basis by the commerce secretary once in three months and sometimes every two months. Once the computerised system in customs is totally centralised, the issues of transactionsfor example, getting a TRA (telegraphic release advice) from one port to anotherwill disappear.
As far as DGFT is concerned, you are aware that the advance authorisation, DEPB, EPCG (export promotion capital goods) have already been automated. The incentive schemes during the next three months will be made online. Once this e-trade project is extended, the number of EDI-enabled ports can easily be extended to 70 from 34. This system should be in place by December. But extension of the system to ports will be done on a gradual basis.
How long is the DEPB extension valid
Gujral: The extension of DEPB (duty entitlement passbook) is for one year or till an alternative scheme is finalised, whichever is earlier
How will you reconcile the differences with the finance ministry
Gujral: There are no differences with the finance ministry. You will have simultaneous notifications from the finance ministry from today (on the FTP).
How will the committee on dollar credit help traders
Khullar: Understand the problem commercial banks opened two windows rupee and dollar. You, as an exporter come and apply, and they (banks) say thank you very much, we will lend you in rupees but not in dollars. What happens then You get the rupees and you convert it into dollars.
But interest costs that you carry are on rupee credit. Those exporters who have large imports to make for their exports need dollars. For those exporters, this (the committee) is a very good step forward. What will happen now is the coordinating committee comprising the finance secretary, the chairman of the IBA (Indian Banks Association) and me, will ensure that commercial banks actually operate the dollar window. There will be pressure on banks to lend in dollars and not in rupees.
How much is the FTP expected to cost the exchequer
Khullar: It cant be estimated.
Can you elaborate on the new markets you plan to open up
Gujral: New 520 focus products have been announced. In the market-linked focused products, over 1,550 products have been added for 13 additional countries. As many as 26 new countries have been added to the focus market scheme. Most of the new products are for the manufacturing sector.
What is being done to upgrade technology
Khullar: Capital goods imports under EPCG can now be done at 0%, which is a very special concession. It has a sunset provision. The window is open till March 31, 2011. We want to encourage exporters to import capital goods. You dont have to pay any duty, raise your productivity or lower your costs. Become competitive and take that opportunity now. Dont wait till March 2011. This is a very special concession that the finance minister has given us. It entails a significant revenue outgo.
Can you explain the initiative taken by DGFT on standard input-output norms (SION)
Gujral: SION norms are finalised with DGFT. These are very important for schemes like advance authorisation, DEPB or duty drawback and are done over a period of time. But they were compiled for the past five and a half years. This has now been compiled and updated.
Will you continue with the annual supplement to the FTP
Khullar: We will see about it next year.
What about the mid-term review
Khullar: In the policy for five years what we are saying is we will take stock in 2011. Nobody knows when the turnaround will happen. Its a good thing to pause and reflect on what have you achieved. Supposing by March 2011 exports turn around and everything is booming, then maybe it will be time for us to reset our targets. Similarly, if there are problems at that time do you want us to continue with a policy without recognising them
Will the FTP take into account the proposed introduction of the Goods and Services Tax
Khullar: I have nothing to do with the rollout of GST.
The state trade councils have never met.
Khullar: We will get them on board at a next meeting of the National Development Council.
Is there a policy measure to address currency fluctuation
Khullar: There is no way to address the forex fluctuation. I cant predict what will happen. Over the last six months its been, by and large, okay. There has been no volatility.