| Date: |
21-09-2015 |
| Subject: |
Commerce minister seeks sops for exports |
|
NEW DELHI: Faced with falling exports, the commerce department has sought fresh government support to prop up the flow of goods from the country.
Sources said more funds have been sought for the Merchandise Exports from India Scheme (MEIS) in addition to Rs 9,000-10,000 crore for reviving the interest subsidy scheme for select sectors. The scope of the interest subvention scheme is almost identical to the one announced by UPA although the coverage is proposed to be expanded to cover more engineering products, processed food items and electronic goods.
The interest subsidy scheme is expected to cost around Rs 2,000 crore annually but funding has been sought for five years to provide policy certainty, said sources.
The request for more assistance comes at a time when exports are down over 16% during April-August and have registered a decline for nine months in a row. With commodity prices continuing to fall, analysts are already lowering the forecast for the current year and say exports will be significantly lower than last year's level of $310 billion.
A revival of exports is also critical for a pick-up in the industrial production. Despite a slight improvement in demand in Europe and other parts of the globe, non oil exports too are witnessing a decline although a large part of the contraction is due to a fall in the value of petroleum products shipped out of the country. The global export outlook too is not buoyant and pressure is mounting on traditional sectors such as engineering and textiles too. For a government that has been trying to get the economy back on the rail, trade has been off the radar with the commerce department unable to convince the finance ministry about loosening its purse strings so that some benefits can be added. For instance, despite identifying trade as a priori ty, the Narendra Modi government failed to announce a trade policy during the first year of its office, although it was overdue. When it finally announced the policy last April, it could not get the finance ministry to provide significantly additional funds. Even the demand for reviving interest subsidy has been pending for months but the government has been unable to decide on it.
Given the falling oil prices, the pressure on government finances has eased substantially, potentially freeing up funds for an export push. But sources said that the revenue department has so far not responded to the commerce department's proposal, which was sent a few weeks ago.
Source : timesofindia.indiatimes.com
|