Exporters seek sops in budget to revive growth
Updated: Jun 07, 2014 02:02:26pm
New Delhi, June 7 (KNN) Government needs to provide environment and stimulus for creation of employment in the country, said exporters’ body adding that employment in manufacturing sector and particularly in exports can also help in inclusive growth.
“Though there are no official estimates of the new jobs created in export sectors, based on the earlier RIS study and our projection suggests that every USD 100 billion of exports, based on the present profile of exports, creates 5 million direct jobs in the export sector besides indirect jobs. Therefore, an additional export of USD 450 billion in next five year can create over 22 million jobs in the export sector,” Federation of Indian Export Organisation (FIEO) said in their pre-budget consultation meeting with the Finance Minister yesterday here.
FIEO President Rafeeque Ahmed said that, “While jobs may be created in all the segment of manufacturing, maximum growth in employment is likely to come from labour intensive sectors like textiles, leather, gems and jewellery, marine products, food processing, handicrafts, handlooms, etc which have a very high capital employment ratio and are highly export centric. Most of the manufacturers in such sectors are micro and small scale.”
Proposing reduction in threshold limit for investment allowance, Ahmed said that the labour intensive sectors are in dire need of expansion and modernization.
“Fiscal incentives will encourage infusion of capital in such sectors. The investment allowance without any threshold limit or with a threshold limit of Rs 1 crore for small scale and Rs 5 crore for medium scale would add to the capacity to help in achieving the export target over next five years which we feel should be fixed around USD 750 billion.”
He further said that an Export Development Fund (EDF), with focus on marketing research and innovative tools of marketing, would help not only the existing exporters but would attract new entrepreneurs in the field of exports.
“However, if providing the corpus of the fund is an issue, Government can provide tax deductions on expenses incurred by the exporters on export marketing. Some of South Asian countries are providing a tax deduction equivalent to 200 per cent of the expenditure incurred on export marketing. Such a support will go a long way in showcasing India’s strength in diverse sectors of exports. Such a fund will help in taking India’s exports to USD 750 billion in next five years,” he said.
Raising concern over the taxation complexities affecting exports, FIEO chief said that, “Some of the taxes have caused great pain to the export sector particularly those levied on reverse charge mechanism for Services undertaken abroad for branding, advertisement, testing, etc.
“Similarly, the levy of TDS on remittances made to foreign agents with no business presence in India has simply added to the problems of Indian exporters as such tax needs to be absorbed by them,” he added.
Ahmed added that the non-fiscal initiatives do play a part in facilitating exports. “The complexity of procedures and delay in delivery mechanism erode the competitiveness of exports. It is rather surprising that India, being the software leader in the world, is still struggling to bring complete EDI for exports and import operations.”
An effective EDI amongst all the 13 stakeholders can reduce the transaction cost and time substantially and will help the country to increase its ranking in Doing Business Report particularly in the “Trading Across Border” segment, FIEO suggested.
The exporters’ body urged the Finance Minister to do away with retrospective amendments like MAT/DDT on SEZ units or Taxation on DEPB sale and also circulars issued by various Government Departments which by virtue of clarifications are given retrospective effect at times reversing the existing practices/interpretation. (KNN Bureau)
“Though there are no official estimates of the new jobs created in export sectors, based on the earlier RIS study and our projection suggests that every USD 100 billion of exports, based on the present profile of exports, creates 5 million direct jobs in the export sector besides indirect jobs. Therefore, an additional export of USD 450 billion in next five year can create over 22 million jobs in the export sector,” Federation of Indian Export Organisation (FIEO) said in their pre-budget consultation meeting with the Finance Minister yesterday here.
FIEO President Rafeeque Ahmed said that, “While jobs may be created in all the segment of manufacturing, maximum growth in employment is likely to come from labour intensive sectors like textiles, leather, gems and jewellery, marine products, food processing, handicrafts, handlooms, etc which have a very high capital employment ratio and are highly export centric. Most of the manufacturers in such sectors are micro and small scale.”
Proposing reduction in threshold limit for investment allowance, Ahmed said that the labour intensive sectors are in dire need of expansion and modernization.
“Fiscal incentives will encourage infusion of capital in such sectors. The investment allowance without any threshold limit or with a threshold limit of Rs 1 crore for small scale and Rs 5 crore for medium scale would add to the capacity to help in achieving the export target over next five years which we feel should be fixed around USD 750 billion.”
He further said that an Export Development Fund (EDF), with focus on marketing research and innovative tools of marketing, would help not only the existing exporters but would attract new entrepreneurs in the field of exports.
“However, if providing the corpus of the fund is an issue, Government can provide tax deductions on expenses incurred by the exporters on export marketing. Some of South Asian countries are providing a tax deduction equivalent to 200 per cent of the expenditure incurred on export marketing. Such a support will go a long way in showcasing India’s strength in diverse sectors of exports. Such a fund will help in taking India’s exports to USD 750 billion in next five years,” he said.
Raising concern over the taxation complexities affecting exports, FIEO chief said that, “Some of the taxes have caused great pain to the export sector particularly those levied on reverse charge mechanism for Services undertaken abroad for branding, advertisement, testing, etc.
“Similarly, the levy of TDS on remittances made to foreign agents with no business presence in India has simply added to the problems of Indian exporters as such tax needs to be absorbed by them,” he added.
Ahmed added that the non-fiscal initiatives do play a part in facilitating exports. “The complexity of procedures and delay in delivery mechanism erode the competitiveness of exports. It is rather surprising that India, being the software leader in the world, is still struggling to bring complete EDI for exports and import operations.”
An effective EDI amongst all the 13 stakeholders can reduce the transaction cost and time substantially and will help the country to increase its ranking in Doing Business Report particularly in the “Trading Across Border” segment, FIEO suggested.
The exporters’ body urged the Finance Minister to do away with retrospective amendments like MAT/DDT on SEZ units or Taxation on DEPB sale and also circulars issued by various Government Departments which by virtue of clarifications are given retrospective effect at times reversing the existing practices/interpretation. (KNN Bureau)
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