Upset with Budget, Nath to meet PM

Disappointed with the Budget proposals relating to the export sector, Commerce and Industry Minister Kamal Nath will soon meet Prime Minister Manmohan Singh and seek fiscal relief for exporters distressed by rupee appreciation.

“None of the recommendations of both the Rangarajan and the Krishnamurthy Committee have been considered in the Budget. We are very disappointed and the commerce minister will meet the PM in the next few days,” a senior official said.

However, when asked whether he was happy with the Budget proposals, Nath said, “I am happy with the non-commerce ministry part of it (the Budget)”.

As to how he would provide relief to the exporters, Nath said the “process will go on”. He said the annual review of the Foreign Trade Policy, due by the month end, would try and address many of the concerns of the exporters.

The two expert committees appointed by the prime minister are believed to have recommended several fiscal and other measures to mitigate the trouble of exporters especially in the labour-oriented sectors of textile, handicraft, leather and marine products.

According to the pre-Budget Economic Survey released last week, growth in textile exports for the April-September period of the current fiscal dropped sharply to a mere 1.2 per cent from 33.5 per cent in the same period last year. Handicraft exports have shown a big negative growth of 14.5 per cent against a positive 5.2 per cent a year ago.

“The Budget has not addressed concerns of the labour-intensive sectors of textile, handicraft, leather and marine products, which are the worst hit by the rupee rise,” the official said.

The Federation of Indian Export Organisations had said the Budget had failed to address the challenges of a rising rupee and waning competitiveness of exporters in global markets.

“The proposals for refund of state and local levies, exemption from FBT on business expenses and from specific service taxes have not been considered,” FIEO President Ganesh Kumar Gupta had said.

According to commerce ministry estimates, the over 13 per cent rise in the value of the domestic currency against the dollar would impact about 275,000 jobs in labour intensive sectors.

The rupee appreciated by 9.8 per cent against the US dollar between April 3, 2007 and January 16, 2008.