FIEO briefs media
on issues affecting exports
 |
|
President, FIEO addressing the Press conference |
In a press conference organized by FIEO at New Delhi on 24th April, President Ganesh Kumar Gupta raised concerns over various issues affecting exports from the country. Referring to the Union Budget 2007-2008, FIEO President said hike in education cess from 2% to 3% and imposition of 12.24% Service Tax on renting of commercial space would further raise the already high transaction cost for exports.
According to Mr. Gupta, exporters were, on the contrary, expecting some income tax relief for employment generating sectors like textiles, leather, handloom, carpets, handicrafts (other than wood based handicrafts), marine, auto components, forgings etc. "If the present UPA Government is committed to focus employment generation then it must provide some tax relief to exporters from these sectors who are facing a rough weather for a variety of reasons beyond their control." he said.
|
As regards Fringe Benefit Tax also, FIEO Chief expressed disappointment and said exporters were looking towards its withdrawal in the Budget. He said tax on foreign travels and participation in foreign exhibitions was dissuading exporters from aggressive marketing. Mr. Gupta appreciated the measures announced in the Annual Supplement to Foreign Trade Policy to neutralize the incidence of service tax on post production services both in India as well as outside and |
|
|
A view of the media persons. |
the tax on input services for non-excisable sectors. He, however, expressed concern over some media reports on North Block’s displeasure with this announcement by the Commerce Ministry and urged the Commerce Minister to ensure that his announcements were honoured by his colleagues in the Finance Ministry.
Referring to e-commerce, Mr. Gupta called for the announcement of a timeframe to achieve full EDI compliance by all the agencies involved in foreign trade and also suggested some surveillance to oversee strict adherence to the prescribed timeframe by these agencies.
FIEO President brought the attention of the media persons attending the conference towards erosion of profitability and competitiveness of Indian exports due to Rupee appreciation. "Export industry is attuned to bearing minor fluctuation in exchange rate, but appreciation of currency by over 13% in just about a year or so and by 4.5% in just a month (April) is creating panic in the industry," said Mr. Gupta. FIEO Chief went on to say that the Reserve Bank of India had also failed to take any concrete steps to address the growing concerns of the exporters over appreciating Rupee. "Whatever measures have been suggested in the Annual Policy Statement issued by the RBI today would fall too short to check the appreciating Rupee," he added.
Mr. O. P. Garg, immediate Past President of the Federation in his address expressed some discontent with the Annual Trade Policy announcements made recently, especially with reference to the two so called employment oriented schemes - the Focus Product scheme and Focus Market scheme. He observed that exclusion of non-EDI ports from the purview was not allowing the schemes to reach the target beneficiaries. He said ICDs at Kanpur, Panipat and Moradabad should be brought under the ambit of the schemes as the three cities were the biggest manufacturing centres of labour intensive products like leather, handloom and brassware respectively. "If a port is non-EDI enabled, then the onus lies with the Government to bring it within the EDI network and exporters should not suffer on account of any delay on the part of the Government," he remarked.
Dr R. K. Dhawan, the Northern Region Chairman of the Federation, while highlighting the beneficial aspects of Rupee appreciation on economy and foreign debt, suggested adopting a mechanism akin to LERMS where 60% of the foreign exchange was converted at market rate and 40% on official rate. The official rate may be fixed and the ratio of official and market rate may be kept in a proportion that exporter gets about Rs 44-45 per Dollar, he suggested.
Mr. Navratan Samdria, a Past President of the Federation briefed the media about the effect of rupee appreciation on tiny and cottage sectors. He made a shocking revelation that many exporting units in small towns like Moradabad had already closed due to hardening rupee especially in the wake of competition from China which is following almost a fixed exchange rate.
Mr. Subhash Mittal, Convenor (IT&EP) while reacting to the difference in perceptions between Finance Ministry and Commerce Ministry on service tax suggested that the two ministries might be merged together so that exporters did not suffer due to inter-ministerial differences in perception.
 |
| Mr. Ganesh Kumar Gupta, President, FIEO(3rd from) right addressing the press meet. With him are from right, Mr. Navratan Samdria, Past President, FIEO; Dr. R.K. Dhawan, Chairman, FIEO(NR); Mr. O P Garg, Immediate Past President, FIEO; Mr. Subhash Mittal, Convenor, FIEO Committee on IT & EP; and Mr. Ajay Sahai, Director, General, FIEO |
