Kamal Nath says exporters need more relief

New Delhi, Oct 6 The Union Commerce and Industry Minister, Mr Kamal Nath, on Saturday gave a qualified welcome to the mini-package for exporters announced by the Finance Ministry in the wake of the appreciating rupee, stating that he would continue to press for more relief required for exporters.

Mr Nath said at a news conference in his office here that rupee appreciation, though a sign of resilience of Indian economy, has become a matter of particular concern to exporters whose import-intensity in export production is not much. He said that a Committee has been set up to address this serious concern.

He also said that last week the Prime Minister, Dr Manmohan Singh, had asked Dr C. Rangaraman, Chairman, PM’s Economic Advisory Council, to study the problems plaguing the export sector in the aftermath of the appreciating rupee, as also the slowdown in industrial production, and prepare a report within a month.

He welcomed the Finance Ministry’s decision to allow interest on Exchange Earners Foreign Currency (EEFC) account and also extending services-tax exemption to four more areas, making such exemptions available for seven services. He said that his ministry would plead for inclusion of other services-tax exemption too and the modalities for this were being worked out.
Cost of relief

To a specific query about the cost of the relief announced on Saturday, in the light of the Rs 1,400-crore package announced in July 2007, Mr Kamal Nath said that it was not proper to estimate loss of tax revenue for these incentives to exporters as they are only notional. He said export activities generate their own spin-off effects, which produce more revenue to the exchequer.

Stating that export was no longer an exchange-earning activity but more of providing gainful employment through sustained economic activities, the Minister said that despite the appreciating rupee he was not revising the export growth set for the current fiscal, which is likely to be 20 per cent in dollar terms. He said that product coverage under Vishesh Krishi and Gram Udyog Yojana employment-intensive industries would be expanded, and he cited minor forest produce and food processing industries as those with good employment potentials. Meanwhile, the President of the Federation of Indian Export Promotion Organisation, Mr G.K. Gupta, and the Vice- President, Mr A. Sakthivel, while hailing the relief package, regretted that main services such as commission to foreign buyer, overseas travel, courier charges and charges to customs house agents, which continue to impact all exporters substantially, remain outside the remission mechanism.