(PTI) Making out a case for extension of the popular incentive scheme – DEPB – for Indian exporters, Commerce Minister Anand Sharma today said he will take up the issue with Finance Minister Pranab Mukherjee on his return to New Delhi. “I am one who is not subscribing to this view that our exports have reached a stage where we can do away with some of the incentives…I am going to discuss DEPB and interest rates with the Finance Minister,” Sharma told PTI here.
He said the issue would be taken up with the Finance Minister after his return to New Delhi. Sharma is here in connection with India-Africa Forum Meeting.
With the country”s exports registering an impressive growth of 37.55 per cent in 2010-11, the Finance Ministry is not in favour of any more extensions to the tax rebate scheme – Duty Entitlement Pass Book (DEPB).
The Indian government spends annually about Rs 8,000 crore reimbursing exporters the taxes paid on import content of export products.
The DEPB scheme is due to end on June 30, but exporters are lobbying hard with the Commerce Ministry which is pursuing their case with the Finance Ministry.
India has to look at ways and means to keep the exports high because the share of the country”s shipments in the global merchandise trade is low, he said.
“There has to be a cushion. The cushion can only be by increasing exports. How do we increase exports? How do we make up trade deficits? These are concerns which I will be discussing (with the Finance Minister),” he added.
India”s exports went up by 37.55 per cent year-on-year to USD 245.86 billion during 2010-11.
The Finance Minister is unduly worried about continuing the DEPB Scheme which was to make an exit by 30 June 2011. Along with it, interest subvention, favourable Credit for export based sectors, also demit. BoT and BoP has a wide disparity. How would Foreign Exchange flow? India, already riddled with scams of the magnitude of the XI Five Year Plan would not make Foreign investor to make undaunted investment either in the capital markets or Foreign investment in M & A. The Government Policies are inconsistent, and the tilt is towards populist and unworthy schemes, which would produce no impact on the economy. Yet Government is persisting with it because India’s 10 Downing Street wants more and more public spending for populace directed schemes. The funds routed to these schemes reach somebody else than intended. Economic governance should aim to growth oriented schems/plans, and higher growth/spending would increase capacity yet inflation would also step up. The Schemes, or plans must be growth oriented minus inflation. It requires more painstaking efforts. Present government wants to go for easy options; tax the people, increase the petrol price; intrduce more services in Service tax net, increase public expenditure to non productive sectors, etc. Remember the past experience of Brazil, East Asian economics, Middle East issue?