Discontinuation of the tax rebate scheme DEPB from June will make exports uncompetitive, thus affecting its growth momentum, industry body CII has said.Exporters get refund of duties on import content of their export products under which they have been given several extensions. It costs the exchequer about Rs 8,000 crore per annum.
“Withdrawal of the Duty Entitlement Pass Book (DEBP) scheme will have a serious blow to the exports growth momentum achieved in the last few quarters,” CII said.
India”s exports registered the highest ever growth of 37.5 per cent at USD 245.9 billion during 2010-11, demonstrating a robust demand for Indian merchandises both in western economies as well as in new markets like Latin America.
The 14-year-old scheme is the most popular among exporters, especially in the engineering and automobiles sectors. The tax refund mechanism was considered to be non-compliant with the World Trade Organisation rules.
Further, CII said, Indian exporters would require time and capital to develop new products, marketing strategies and refocus on emerging markets to sustain exports growth.
Thus, it is imperative that the government will continue to be sensitive to the exporters” needs to achieve the ambitious target of doubling exports to USD 500 billion by 2014.
The Government does not have the far-sight to see that if some sops are given to the struggling export sector, exports which has already established a surpassed target of $ 225 billion against $ 200 billion, and with the entire shippers finding new markets and establishing their supramacies, Indian exports which has a clear direction of movement will beget spectacular results. Crores of Rupees are wasted and or set aside for populist schemes which derive no advantage except corruption. 2 G Scam, Commonwealth games, Adarsh, and many more, have taken away Crores of Rupees which really belong to the exchequer. The Government’s policy after removing interest subvention, increasing export credit manifold, taking away DEPB will spell disaster. Many subsets were brought under Central Excise, Petrol hike time and again, failure to rein in inflation, Pranab will go down in history as the Finance Minister who halted industrial growth. UPA II is wrong in doing whatever it did!