In the run-up to Budget 2006-07, the government on Thursday hinted at major concessions for export sectors with high employment-generating potential.
Some lenient but bold steps are likely to be taken for key export sectors, Finance minister P Chidambaram said after a meeting with various export promotion councils here. It is expected that sectors like leather, textiles and garments, and gems and jewellery, will be the ones to get Budget benefits. Chidambaram also said the economy would grow close to 9% this year and that it could record even higher growth in the next few years if we remain truly committed to the path we have taken.
This was the first ever pre-Budget and pre-Foreign Trade Policy meeting of exporters convened by commerce and industry minister Kamal Nath with Chidambaram at the helm. Nath said since the countrys capital goods industry was in its infancy, it needed protection.
He also underlined the need to balance exporters requirements with the interests of the domestic industry to facilitate growth of both the sectors. Speaking on the occasion, Chidambaram said the country could live with the current account deficit and that it was under control as there was a fair increase in the flow of capital and other invisibles like remittances by Indians abroad. He said the widening trade deficit was not a cause for concern as foreign exchange inflows from other sources were balancing it out. Chidambaram said, I want importers to import what they want and our exporters to export as much as they can. On their part, exporters asked the finance minister for central sales tax exemption and urged the the government to meet its commitment of not taxing exports in the coming Budget.
Sop Opera Exporters seek: Cut in customs duty on import of capital goods from 5% to 0% Continuance of Duty Entitlement Passbook Scheme and Textile Upgradation Fund Scheme
They also demanded that the government cut customs duty on imports of capital goods from 5% to 0% under the Export Promotion Credit Guarantee Scheme.
Exporters also demanded a rebate on the service tax and exemption from the fringe benefit tax on sales promotion services. They also urged the government to ensure that the Duty Entitlement Passbook Scheme and the Textile Upgradation Fund Scheme be continued. Besides, they demanded the removal or rationalisation of levies that eroded the global competitiveness of Indian exports.
Nath suggested that all export promotion councils should undertake in-depth studies of their prospective competitors as part of a long-term strategy to stay ahead in the race for a larger share of world trade.