Govt may not provide any sops to exporters in FY11

Govt may not provide any sops to exporters in FY11

Bangalore: Citing “serious fiscal situation," the government has said that no new incentives and sops could be provided to exporters in the next fiscal in view of significant resource crunch faced by the Centre.

Commerce secretary Rahul Khullar told a meeting of exporters here on Thursday night that the current fiscal situation was so serious that it was not going to be a “temporary problem" in terms of resource crunch.

There was bad news for exporters who tend to believe that the government would come around next year and “throw money" at them, he said addressing the Federation of Karnataka Chambers of Commerce and Industry, Federation of Indian Export Organisations and Bangalore Chamber of Industry and Commerce.

“There are some problems which will not go away merely because you throw money at them", he said.

In April-August this fiscal, India’s exports contracted by 31.3% to $63.9 billion from $93.1 billion in the same period last year as demand weakened in its traditional markets of the US, European Union and Japan, which account for more than two-thirds of its outward shipments, he said.

When the country was facing a tight budgetary constraint, the government has no option but to tell the exporters that it can’t give anything next year because “there is a bigger national problem."

Khullar told exporters to dispel any notion that “this is a temporary phase and come next year there will be upturn in the economy and suddenly the commerce ministry will come around and give more incentives and sops."

“Those of you who are banking on that to happen, I am sorry, it’s not going to happen," Khullar, who heads a inter-ministerial panel to address exporters’ woes, said, adding, if exporters lived on that hope, it would not come true.

FIEO president A Sakthivel said though export figure showed a negative growth of 19.4% in August, it is a positive development after constant decline of about 30% in the past six months.

France and Germany also posted good results in the second quarter of 2009 raising hope of recovery in Euro zone. “However, at this stage, it would be premature to conclude that we are on way to recovery..…," he said.

Sakthivel requested the commerce secretary to monitor the delays in refund of service tax and central excise rebate for exports. “What can be stated with certainty that not more than 10% of the exporters have got the refund for service tax and the average delay in getting central excise rebate is more than three months", he said.