In view of hardening of the rupee resulting in the loss of jobs and closure of units, exporters were expecting some relief from the desk of the Finance Minister through the Union Budget 2008-09 particularly as the Economic Survey had also indicated that the road ahead would be tough for exporters. "However, their expectations have been belied", said Mr. Ganesh Kumar Gupta, President Federation of Indian Export Organisations (FIEO).

The proposal to provide zero rating of exports through refund of state and local levies, exemption from Fringe Benefit Tax( FBT) on genuine business expenses and exemption from all service taxes on services used during the course of exports to provide a level playing field to Indian exporters have not been considered.

FIEO was also expecting an extension of the sunset clause for EOU, EHTP and STPI besides temporary reintroduction of 80-HHC to encourage investment in export manufacturing. None of these proposals were, however, incorporated in the budget.

"It was really unfortunate that the government did not address any of our concerns. We are not asking for any kind of incentives. What we really wanted was the paring down of certain taxes that have been imposed on the exporting community", said Mr. Gupta to tradeindia.com.

"The only silver lining for the export sector is the gradual move towards a Goods and Services Tax (GST) by reducing the excise duty from 16 % to 14 % and few concessions given to sports goods and the gems and jewellery sector through reduced customs duty on their imports".

When asked whether there was any hope that the Annual Foreign Trade Policy would address some of these concerns, Mr. Gupta wasn't willing to mince any words."As of now we have no hope that it is going to be addressed. The possibility is extremely minuscule right now",he revealed.

On the strengthening of the Corporate bond market for infrastructure purposes, Mr. Gupta said that all governments have been "very partial"' to the industrial sector including the present one.

About pruning of the list of items reserved exclusively for the SSI sector, Mr. Gupta said that "dereservation should continue as this is good for the entire export sector".

When asked whether the utilisation of forex reserves for infrastructure purposes is going to happen some time soon, the FIEO President told this correspondent that though this is an extremely positive announcement made by the government, we will have to wait and see what is done in this regard. "The FM would know best" was what Mr. Gupta had to say regarding this.

Mr. Rajeev Mehta

(Tradeindia Expert)

Mehta Stores

Managing Director, Mehta Stores
New Delhi, India