Handicrafts sector seeks spl stimulus

Written by Rakesh Sood | New Delhi | Updated: Jun 30 2009, 06:06am hrs
The handicrafts industry, which registered a decline of 48% in exports during 2008-09, has demanded a separate stimulus package in the ensuing Budget for the revival of the sector.

In its pre-Budget memorandum submitted to the finance minister Pranab Mukherjee the Export Promotion Council for Handicrafts (EPCH) has said, The industry, which is already facing the unabated import of Chinese handicrafts in India has resulted in the loss of over three million jobs and this is affecting exports too.

To counter the downturn, the council has sought exemption under Section 10 BA of Income Tax 1961, for all handicraft items. Currently, it applies only to wooden handicraft items.

Malhotra has also said that service tax, enjoyed by organisers of business expositions and extended to textile manufactures and merchant exporters, should also be be granted to the handicrafts sector.

The Council is not demanding any bail-out package, but asking the government to extend certain benefits, which are legitimate to this industry which employs over 7 million workers spread across the country, the chairman of the Council, Raj Kumar Malhotra told FE .

Areas such as Saharanpur, Jodhpur, Barmer, Srinagar, Anantnag , Jaipur and the North Eastern region, known for wood carving, wooden furniture and iron handicraft, paper mashie shawls, handprinted textiles, cane and bamboo industry, should be notified as towns of export excellence. The mega cluster scheme for handicrafts, developed on a public-private partnership basis, should be introduced for mega clusters at these centres.

To implement skill and technology upgradation scheme, a grant of Rs 100 crore for each town should be sanctioned.

Similarly, the import of tools, equipments and machineries at zero customs duty is required in the manufacture of handicrafts. A separate custom notification needs to be issued to enable the duty-free clearance of tools etc, for handicraft manufacturers, already permitted under the foreign trade policy.