The country has to rely heavily on external capital to bridge a staggering gap of Rs 2,49,800 crore between exports and imports during the Ninth Plan period. Reforms in the tariff structure, recasting of the incentive scheme and streamlining of the customs and banking facilities are among the measures advocated in the draft Ninth Plan to achieve an export growth rate of 14.5 per per annum during the period 1997-2002.In value terms, the projected growth rate will yield approximately Rs 2,35,900 crore (at constant prices) or $64.75 billion (in real terms) by 2001-2002 (terminal year of the plan).
The draft Plan has also recommended implementation of special schemes for exporters by allowing them duty-free access to imported inputs, preferential access for external commercial borrowing approvals, and special efforts to release infrastructure bottlenecks which hamper export effort.
To achieve investment in tradeable goods and services, to move away from non-tradebles and to make the external environmentmore attractive for exporters, a more "gradualist" exchange rate mechanism has also been suggested.
The other policy measures required to strengthen the export effort outlined in the document are:
* Enhancement of the investment limit of the SSI sector against committed export obligation to enlarge the production base for export
* Special efforts and policy measures to reduce transaction cost of foreign trade
* Implementation of the electronic data inter-change (EDI) in a time-bound manner covering export facilitation sectors like banking, transport, insurance, trade information
* Effective involvement of states in export effort, including removal of inter-state barriers/levies for free movement of export goods
* Strategic support to the exporting community to upgrade marketing and information skills, standardisation of quality and common facilities for research and development, and training through budgetary resources
* Developing new instruments specifically for export finance andinsurance schemes for various tradeable commodities
* Enhancement and upgradation of export-related infrastructure such as ports, shipping, airports, and ensuring that the cost associated with these activities is brought at par with international rates
* Enhancement and upgradatioin of overall infrastructural facilities, particularly in respect of power, transport and communication facilities.The document notes that although schemes for exemption or reimbursement of all taxes on exports have been in vogue for quite some time, they have been both 'incomplete" and "cumbersome".
In particular, these schemes have more or less been limited to Central taxes and there has been no meaningful effort to reimburse State and local taxes, which cumulatively amount to to a fairly heavy burden.
One of the reasons for the lack of movement in this area is that the State governments by and large do not perceive any direct benefit from participating in the export promotion effort. Moreover, the difficulties ineffecting such reimbursement in the existing system of State and local taxes can be formidable. The Central government, the draft document, opines will need to take a lead in this matter to create a sense of involvement and interest among states in exports.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
