MUMBAI, March 1: Export growth of plastics has been negative during the last two years for various reasons. Despite this, the Plastics Export Promotion Council (Plexconcil) has envisaged an export growth of 25 per cent during the next three years to 2001.According to Plexconcil, plastic exports to the USA in 1995-96 at $578.34 million were up 19.29 per cent from 1993-95 levels. This in 1997-98 (April- October) at 268.48 million were up just eight per cent from previous year's levels. Accordingly, a massive 62.71 per cent of the targeted figure remains to be achieved during the current year.
Given the current situation, reaching the targeted export figure of $720 million in 1997-98 is unachievable, and therefore, the growth is most likely to be negative.Despite this, the council has targeted that plastic exports in 1998-99, 1999-2000 and 2000-2001 will be rising to $900 million, $1,125 million and $1,400 million respectively.
In a memorandum recently submitted to the commerce secretary and the revenuesecretary, the council has maintained: "The current state of exports is not very encouraging expecially in view of the unfavourable Exim policy and factors like devaluation in the competing countries (especially the Asian Tigers), the general recessionary tendencies that have added fuel to the fire." In order to realise the targeted growth plans, Plexconcil has called for government's support in the following areas:
A stable policy (on all fronts like the Exim policy and other related policies pertaining to finance and revenue)
Hassle-free duty free inputs for export production
Additional support to compensate for inadequacies in infrastructure especially those pertaining to power, transmission, both within and outside the country and taxes (sales tax and octroi) levied on export inputs and;
Finance for export production - allow exporters to utilise finance up to six months of the export turnover for export production (within the overall limits fixed and which is as per the RBI guidelines). However,banks are fixing the slabs for utilisation of credit limits for various purposes.According to the council, the duty exemption schemes (eg DEPB) has remained a non-starter for the plastics sector, and the QBAL scheme continues to remain "very cumbersome to operate." Both these schemes need fine-tuning, it says giving suggestions.
As regards the DEPB schemes, entitlement needs to be denominated in the US dollars from Indian rupees currently "to reduce risks on account of the exchange rate fluctuations; a fixed transparent and time- bound schedule for fixation / revision of DEPB rates on the receipt of applications; export promotion copy of shipping bill or additional copy of shipping bill may be treated as the DEPB scrip. (Currently, there is considerable time lag to get DEPB credit from the time the exports takes place) and lastly imports under DEPB should be permitted through any port. The QBAL scheme has remained cumbersome with customs/excise procedures involving high degree of follow- up and hiddencosts. All this make exporters shy away from exports. The suggestions to simplify include:
One, the "exceptional cases" mentioned under para 7.20 of the HBP volume 1 be more clearly defined or scrapped completely.
Two, any advance licence /imported material should be automatically transferable once the Export Order is completed and the licence redeemed.Three, the one time amnesty scheme extending the validity of advance licences up to December 31, 1997 be extended to September 30, 1998 provided that the licences are put up for bond waiver and transferability.
Lastly, it has suggested that multiple levels of control should be removed, the procedure for release advices from one customs house to another should be reviewed, any move by the state governments to impose tax on exports should be stopped, and a common form should be designed to regulate any duty free schemes.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
