The Federation of Indian Exports Organisation (FIEO) today said the Duty-Entitlement Passbook (DEPB) scheme should not be withdrawn till the Goods and Services Tax (GST) is implemented in the country.
"Exports grew by 46.4% at USD 29.2 billion in June 2011, this is a reflection of the entrepreneurship of the exporters and the government's supportive policies towards exports.
"However, the growth trend will get restricted to 35-40% during the third and fourth quarters due to the withdrawal of DEPB scheme from October 1," FIEO President Ramu S Deora said in a statement today.
Under the 14-year-old DEPB scheme, the government spends about Rs 8,500 crore annually for re-reimbursing exporters on the taxes paid on import equivalent content of export products.
"DEPB scheme should not be withdrawn till implementation of GST in the country," he said.
The GST is expected to be implemented in the country from April 1, 2012.
Deora also requested Union Finance Minister Pranab Mukherjee to reintroduce interest subvention of 2% for the entire export industry.
Citing China, which is offering export credit at 6.31% to 6.56%, he said the high disparity in interest rates would make India's exports uncompetitive in the global market.
Deora added that the recent hike in interest rates by many public sector banks would make export finance costlier and make Indian goods "non-competitive".
Source : www.moneycontrol.com