Commerce and industry minister Kamal Nath has said the Centre will soon announce certain measures to help exporters, including an increased interest subsidy for some employment-intensive sectors.
The meeting is being convened at the instance of Prime Minister Manmohan Singh, who also holds the finance portfolio. After the meeting, Nath said, ?We will certainly not reach the $200 billion export target this fiscal. All the demands of exporters will be discussed internally in the next 10 to 12 days to see that we are able to maintain the export growth in the light of the depressed conditions in the Western world.?
Nath and other government officials on Wednesday met exporters and representatives of several industries seeking more sops to help them tide over the slowdown. The meeting was attended by commerce and industry minister Kamal Nath, Planning Commission deputy chairperson Montek Singh Ahluwalia, Cabinet secretary KM Chandrasekhar and others. Sources said the government will sort out the procedural roadblocks and the isues are being looked into by a committee, including the secretaries of finance, commerce and revenue departments. Policy issues are being taken up at the ministerial-level and by the PM. Pointing out that the governments in their competing countries including China, Pakistan, Bangladesh have given additional benefit to their industry including higher VAT rebate for exporters and support in the garb of boosting research and development, exporters said the UPA government should also grant them sops to help them price their products competitively in global markets.
?We are losing export orders to our competitors by narrow margins due to additional sops given by them whereas we are not provided a level playing field to compete with them,? said A Sakthivel, president, Federation of Indian Export Organisations, the apex body for exporters. The main demands of exporters include tax exemption on export income, increase in the refunds through duty drawback and Duty Entitlement Passbook Scheme, moratorium for two years on term loans, exemption from service tax and FBT, and export credit across the board at 7% interest rate. The growth of exports showed a mild decline of 1.2% in December 2008 compared with decline of 12.4% in October and 9.8% in November.
However, in December, exports of several employment intensive sectors showed a major decline. FIEO cited the industrial production data for November 2008 to show that production of cotton textiles, man-made fibre textiles, leather and fur products, basic chemicals, metal products, transport equipment and other manufacturing industries contracted in that month.
Sakthivel said, ?going by this trend coupled with no increase in world trade, for the first time in a decade, exports may have a negative growth in 2009.? Exports for the eight month April-November had touched $119 billion.
While Nath maintained that exports could be closed to the target, exporters did not agree. ?If we do not get immediate help from the government, achieving even $170 billion this fiscal could be difficult,? Sakthivel said. He had also warned that 10 million people engaged in the exporting sector would be out of jobs by March.