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Government announces several measures to boost exports

Commerce Minister Ramkrishna Hegde today announced a series of measures in the Lok Sabha to boost flagging exports.

The important elements of the package are reduction in the rate of interest on pre-shipment and post-shipment credit from 11 per cent to nine per cent. The exporting community says one reason for the bad export performance had been the high cost of export credit.

After consultations with the Reserve Bank of India, it has been decided that as a ''special temporary facility'', credit will be made available to exporters at nine per cent up to March 31, 1999.

Other concessions were also announced:
1) Amendments to be made to allow extension of tax holiday for export-oriented units and export promotion zones from five to 10 years.
2) The government will pay interest to exporters if duty drawback or refund of terminal excise duty are delayed beyond two months.
4) EOUs will be permitted sub-contracting facility in the domestic tariff area.
5) Private software technology parks to be permitted benefit of the Export Promotion Capital Goods Scheme.
6) Export processing zones to be allowed to export through courier.
7) A special package for hardware electronics is also to be finalised within a very short time.

From September 1, 1998 the government shall pay interest to exporters if government dues by way of duty drawback or refund of terminal excise duty is delayed beyond two months.

In the ease of duty drawback, this period will be reckoned from the date of shipping bill and in the case of terminal excise duty, the period will be from the date of payment of duty.

This will be subject to the prescribed documents being furnished within 15 days of export/deemed export.

To reduce the costs to the exporters and also to help augment working capital.

Manufacturer-exporters with a record of specified export performance and above one year of unblemished export record will be permitted the facility of legal undertaking, subject to prescribed terms and conditions instead of bank guarantee to the customs as security for import of duty-free raw materials, etc.

Exporters who are permitted to give bonds to excise and customs bond officers, will not be required hereafter to give separate bonds for fulfillment of different obligations but only a ''single mother bond'' on an annual basis, which will subsume all the bonds required to be given for various purposes.

Exporters had been representing that procedural difficulties and erosion of competitiveness are the major reasons for the slowdown in export growth in some sectors, Hegde said in a statement.

A number of promotional measures and procedural changes suggested by the exporters have been agreed to by the government.

They include extension of tax holiday for export oriented units and export processing zones from five years to ten years. Necessary amendments in the statue will be made.

Export oriented units will be permitted sub-contracting facility in the domestic tariff area.

Exports through courier will be permitted from the EPZs.

A special package for the hardware electronics sector will be finalised within a very short time.

Manufacturer exporters of specified turnover will be permitted clearance of goods on the basis of self-certification. A notification laying down the procedure will be issued shortly.

To give a boost to export of processed foods, horticultural and floricultural products, the duty on mobile cooling equipment and other cold chain equipment will be suitably revised to reduce the cost of such equipment.

Some more measures to simplify procedures have also been approved and necessary orders will be issued shortly.

The government trusts that the exporting community will respond positively to these measures and help to achieve an export growth of 20 per cent this year, down by eight per cent during the first quarter of the year.

An analysis of the preliminary data shows that while nearly two-thirds of our export items have reported positive growth, about 30 major export items constituting around 25 to 30 per cent of our export basket, have shown substantial decline.

Export of cotton yarn and fabrics has shown a drop of 20 per cent, export of man-made fabrics declined by about 35 per cent and export of transport equipment has dropped by about 20 per cent.

Hardware electronics has suffered the biggest setback of nearly 60 per cent while oil has shown a 50 per cent decline.

Some sectors have achieved creditable growth, especially software, gems and jewellery, chemicals and pharmaceuticals.

The reasons for the poor performance were partly attributed to the difficult economic situation in some of the southeast Asian countries.

During the first quarter, exports to Indonesia, Thailand, Singapore, South Korea besides Japan have shown a substantial fall, Hegde said.

UNI