Exporters have their expectations pinned on the Union Budget for more incentives to sustain growth momentum, a way out of the working capital woes stemming from the new GST regime and an improvement in infrastructural facilities. The Finance Ministry, however, will need to weigh a lot of factors such as maintaining fiscal prudence, conforming to multilateral obligations of curbing export subsidies and nudging State Governments to participate in infrastructure development for exports, while coming up with a fresh package for exporters. Is it, however, important to understand what exporters expect from the upcoming budget?
I have a big wish list from the Government. Firstly, the duty free imports of fabrics existing
earlier should be continued. Intensive awareness programs must be conducted by
Customs in clusters Jaipur, Ludhiana, Mumbai, Delhi and other places to create
awareness about hassle free customs experience. Another area of concern is that while on the
one hand we are paying 18 percent freight on exports, we have to pay an additional 18 percent
GST on the other. We are obviously affected by this and it should be rectified. Overall,
prevailing drawback rates should definitely be revised as we are losing business every day.
Our competitiveness is affected and we are already seeing poor results on our balance sheets.
HKL Magu, Chairman, AEPC
The situation of our industry is no longer hidden from everyone and what is required is strong support. Firstly, the Government has to restore drawback rates to earlier levels, as we are losing business every day. Presently, investments and expenditure up to a combined limit of Rs 1 lakh get exemptions under Sections 80C, 80CC and 80CCC of the Income-Tax Act. This should be enhanced to Rs 10 lakh. Apart from this, the rates of interest on loans vary between 9 to 12 percent; the interest rate should be reduced so that an exporter can invest more. The most important areas where we need Government’s intervention is in duty drawback rates and RoSL, as the new rates have disturbed the business.
Narinder Chugh, Million Exporter, Ludhiana
The Government has given us three months from 1st Jul to 30th Sep to deal at the existing duty drawback rates and our main concern is that it should be extended or retained as earlier for the sake of survival. Every garment exporter was working on a net profit of 4 to 5 percent and we are now losing around 1 to 2 percent on every order. No company is so competent that it will keep running while incurring losses. We are told that a special committee is being formed to take care of the drawback rates of the garment and many other sectors and if they sincerely listen to advice and suggestions, we hope that they will agree to pay drawback as earlier. While earlier we were making a product for USD 5$, the same piece can no longer be made even at USD 5.50; the buyer is not ready to pay a higher price and thus the government should come forward to our rescue. Traditional items like machine parts, gems, jewellery, garments, textiles and many more are all suffering and they should get due relaxation. The industry is the biggest employment generator; since people have already started closing down, jobs are adversely affected. We expect the Government to take action on all these aspects as quickly as it can.
Anil Varma, President, Delhi Exporters Association, Delhi
I am told that the Central government’s budgetary outlay for improving export infrastructure is only Rs. 500 crore. Since infrastructure is crucial for exports, budget allocation on infrastructure has to be enhanced considerably. Higher assistance should be provided to logistics also. Karnataka had received investment intentions of Rs. 1.49 lakh crore till October 2017, which is 43 percent of the investment intentions of the country. The State has become the top destination for FDI in the country and has done well in exports, contributing about 40 percent in electronics and software services.
RV Deshpande, Karnataka Minister for Large, Medium Industries and Infrastructure Development