Commerce ministry to get only 5% increase in budget allocation .

Centre may have ambitious targets of doubling exports but in terms of financially supporting the sector, there is barely any major schemes and allocation for commerce ministry in the coming budget.

As against the initial proposal of Rs 4,636 crore, the proposed allocation for commerce ministry was first slashed down to Rs 2,550 crore. In fact, the final allocation is likely to be just Rs 2,100 crore for 2012-13 vis-à-vis Rs 2,000 crore in 2011-12, an increase of only 5 per cent, according to sources in commerce ministry.

A closer look at the proposed allocation would make it clear that there is hardly any new scheme for exporters this year. A maximum budgetary allocation of mere Rs 150.15 crore has been proposed for new schemes and virtually the whole of it that is Rs 150 crore would be utilised for setting up more footwear design and development institutes across India.

The absence of any major initiative for commerce ministry in 2012-13 budget was indicated last week when commerce minister Anand Sharma met finance minister Pranab Mukherjee. The FM had hinted that centre does not have much fiscal sops to offer to exporters this year on the back of tight fiscal situation.

“Commerce ministry's bold initiatives of enhancing exports would have required an investment of Rs 4,636 crore in 2012-13 but planning commission asked us to revise it down. Thereafter, we projected a requirement of Rs 2,550 crore. However, we’ve been indicated that the final budgetary allocation this year would not be more than Rs 2,100 crore,” commerce ministry sources said.

Sources pointed out that from the total proposed expenditure of Rs 2,550 crore for 2012-13, 54 per cent or Rs 1,380 crore will be for central sector schemes, including support to plantation boards and research and development. “The biggest allocation this year, like before, would be to the centrally sponsored ASIDE (Assistance to States for Developing Export Infrastructure) scheme. It has been proposed that the annual outlay for the ASIDE scheme would be 40 per cent or Rs 1,020 crore,” a source added.

This is despite the proj-ected slowdown in exports in coming months with bleak demand from tradit-ional markets of EU and US. In fact, the growth of merchandise shipment from India has slowed down since July last year. Comm-erce secretary Rahul Khullar had reiterated it over and again that the coming financial year (2012-13) will be more tough for exports vis-à-vis current year where the growth was phenomenal in first six months. From a peak of 82 per cent in July 2011, export growth has slipped to 44.25 per cent in August 2011, 36.36 per cent in September 2011, 10.8 per cent in October last year and 10.1 per cent in January.

Source : mydigitalfc.com