Target plus scheme likely to go, 2 others may stay

New Delhi, Oct 30 | Updated: Oct 31 2005, 05:30am hrs
The target plus scheme is likely to be the only reward scheme for exporters which may be abandoned by the government because of its non-compatibility with World Trade Organisation (WTO) norms.

The two other schemes presently being scrutinised by a two-member committee of officials may be spared the axe as they do not violate WTO stipulations and the flow of benefits to exporters is relatively more transparent.

As per the target plus scheme, exporters who have achieved a quantum growth in exports would be entitled to duty free credit based on incremental exports, which is substantially higher than the general actual export target fixed. Rewards were granted based on a tiered approach.

Officials pointed out that the scheme is incompatible with WTO norms as it is based on past performance.

The scheme may not pass the WTO-compatibility test as exporters are rewarded for some achievement of the past, an official said.

The Vishesh Krishi Upaj Yojana, on the other hand, provides reward based on current performance.

Designed to encourage exports of fruits, vegetables, flowers, minor forest produce and their value added products, the scheme lays down that the exporters of such products would qualify for duty free credit entitlement equivalent to 5% of the FOB value of exports.

The Served from India scheme, which grants duty credit entitlement to service providers who earn foreign exchange of at least Rs 5 lakh, is also compatible with the WTO norms.

Officials, however, pointed out that the decision of the two- member committee would be applicable only from the next fiscal.

Even if officials decide to discontinue a particular scheme, the benefits flowing from the current fiscals export performance would be given to the qualifying exporters.

The two-member committee examining the schemes include director general of foreign trade K T Chacko and Central Board for Excise and Customs member A P Sudhir.