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From the President’s Desk…..
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My Dear Fellow Exporters,
The Union Budget 2007-08 seeks to attempt ‘inclusive’ growth, which is very much the need of the hour, especially when despite a sustained high economic growth of over 8.5 per cent our human and gender development indices remain abysmally low. No matter how high is the economic growth, any democratic polity in the world can’t be stable until it assures the benefit of growth to its larger population. Our Hon’ble Finance Minister has deftly hit the ball in that direction without sacrificing the growth process as he firmly believes what the Bangladeshi Nobel laureate Dr. Muhammad Yunus says, "Faster growth rate is essential for faster reduction in poverty. There is no other trick to it." The increased allocations for agriculture, education, public health, drinking water, sanitation, rural roads, housing etc. are surely going to help the process of building human capital, which is as much important for political stability as for the growth of manufacturing and services in our country.
The Budget promises substantial increase in the outlays for education and public health. Introduction of means-cum-merit scholarship is a good move to address the problem of dropout of at least the ones who have merit but no means. The Budget also focuses secondary education to address the skill requirements of our manufacturing sector as well as our burgeoning services sector. In fact, at ServinXpo, an International Congress on services sector that we oraganised recently, it was one of our major observations that the availability of skilled manpower in our country is far too insufficient to keep pace with demands of our fast expanding services sectors. In his budget speech, the Minister has himself recorded the impressive growth of services sector in the past three years at 9.6 per cent, 9.8 per cent and 11.2 per cent respectively.
Among our services sectors, travel & tourism is ideally disposed to create a job-led growth unlike some other sectors which are sometimes criticized for setting jobless growth. The UN World Tourism Organization Report has noted a remarkable shift in global tourism towards South Asia with India providing the greatest momentum to it. The income tax exemption given to hotels in NCR Region together with increased allocation for tourism infrastructure will help meet physical needs of this sector which has unlimited potential in our country. One of the speakers at ServinXpo had said that ‘Incredible India’ campaign is focused on just well known tourist destinations in the country; there remains a huge hinterland untapped.
Among manufacturing industries, textiles sector is not only known for its employment generation potential but also for earning huge foreign exchange for the country. Our textiles exports are growing reasonably well and currently enjoy 4.7% share of global trade in this sector. The ‘Textile Vision 2010’ envisages 12% annual growth in textiles industry which is projected to create 12 million additional jobs. The increase in allocation for Textiles Park Scheme from Rs. 189 crore to Rs. 425 crore and for Textile Up-gradation Fund Scheme from Rs. 535 crore to Rs. 911 crore is a good news. TUF scheme helps our industry to take on the challenges of quota-less world trading and its continuation has been rightly announced by the Minister.
The Minister had announced scheme for development of handloom clusters during the last budget by covering 120 clusters under the scheme. He has promised to add 100-150 more handloom clusters under this Budget. This will surely boost handloom exports from the country. The budget has added to the competitiveness of gem & jewellery sector also by reducing duty on cut and polished diamonds, rough synthetic stone and unworked corals. I hope this helps the gem & jewellery sector to get over some sluggishness that it experienced in the last fiscal.
By announcing to reduce CST from 4% to 3% beginning the next fiscal, the Minister has signaled its gradual phase-out. Unfortunately, clear roadmap for Goods and Services Tax (GST) with specific GST rate has not yet been announced which could have helped excise duty, service tax and VAT to move towards the GST rate.
Yours sincerely,
Ganesh Kumar Gupta
PRESIDENT
