The commerce ministry will ask the finance ministry to continue with the duty entitlement passbook (DEPB) scheme beyond June 30 so that the export growth momentum could be maintained, especially at a time when there is risk of trade deficit getting out of control due to high international crude oil prices.
?Exporters have their concerns and I am one who does not subscribe to the view that our exports have reached a stage where we can do away with incentives,? commerce minister Anand Sharma said.
The government suffered revenue loss of R8,000 crore on account of DEPB scheme in the past fiscal alone. The scheme is set to expire on June 31. Concerned about the prospect of missing the fiscal target due to high oil subsidies, the finance ministry is tightening its purse string and hence the plan to let the scheme lapse.
?Let?s not forget that last year we had trade account deficit of $105-106 billion. Compared to the previous year, it got down because we exceeded the export target,? he said.
?The development between now and then is skyrocketing oil prices which will take our oil imports to a high level in value terms. How can we neutralize this? The cushion can only be in increasing exports. These are our concerns which we will discuss with the finance ministry,? he said.
?I am going to discuss DEPB and interest rates. I feel interest rates are high. We have seen a situation where capacity expansion is not taking place. It will also affect employment generation,? Sharma said.
?After my return from Paris, we will have an internal assessment. We are going to have a substantive meeting with the finance ministry and its team,? he added.