Economy Jan 15, 2013
Reeling under the impact of global slowdown, exporters are unlikely to get tax sops in the forthcoming Budget as the government has little room for fiscal manoeuvre, sources said.
"The Commerce Ministry has asked for some more relief for exporters which are hit hard by the global demand slowdown.
The ministry is trying hard but things are looking difficult," the source said. Exporters are demanding measures like adequate availability of credit at affordable rates, exemption from service tax on some services like branding and marketing of a product and a planned scheme for marketing of items.
"The government need to take revolutionary steps to boost exports. It will help in increasing tax collection," Federation of Indian Export Organisations President Rafeeq Ahmed said. Sharing similar views, Apparel Export Promotion Council Chairman A Sakthivel too said that the government should extend support to exporters in the Budget.
Due to the demand slowdown and economic uncertainties in the India's traditional markets, the US and Europe, exports are in negative territory contracting since May last year. Both the US and Europe accounts for one-third of India's exports which stood at $307 billion in 2011-12.
During the April-December period of 2012-13 fiscal, the country's overseas shipments have shrunk by 5.5 percent to $214.1 billion. Finance Ministry has already expressed its intention to contain the fiscal deficit which is expected to go up to 5.3 percent of the GDP in the current financial year as against the budget target of 5.1 percent.
The government has already expressed its commitment to bringing down fiscal deficit to 4.8 percent in line with recommendations of the Kelkar Committee on fiscal consolidation.
In order to control expenditure, the government had raised the diesel prices by over Rs 5 per litre and limit the supply of subsidised LPG cylinders to six per family per year. Commerce and Industry Minister Anand Sharma has recently provided some support to exporters. He has extended the 2 percent interest subsidy scheme till March 2014. Finance Minister P Chidambaram is scheduled to present the Budget for 2013-14 on February 28.
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