Exporters get 2% interest subsidy for 6 more months

After months of lobbying for a whole range of tax and non-tax sops, a six-month extension on the interest rate subvention scheme is all that Indian exporters got in today’s interim Budget presentation. The 2 per cent interest rate subvention of pre- and post-shipment credit for traditional export sectors like textiles, leather, gems and jewellery, marine products and small and medium enterprises was extended beyond the March 31 deadline till September 30, 2009 by acting finance minister Pranab Mukherjee in the interim Budget today.

However, more measures may follow soon. “Some procedural changes like giving retrospective effect to the service tax refund scheme may come up in the due course of time,” commerce secretary GK Pillai told The Indian Express. “The Government always has to maintain a fair balance between fiscal concessions and the fiscal deficit, so the Budget couldn’t have considered all their (exporters’) demands,” he added.

But the government’s failure to address their concerns in the Budget today came as a major disappointment to the exporter community, which was hoping for a slew of measures to be announced in this Budget to help ease their problems arising from the demand squeeze in the West. The Federation of Indian Export Organisations (FIEO) had made representations to the government asking for various tax sops like income tax exemption on export profits, exemption from fringe benefit tax, investment allowance, etc. “It is a little disappointing since we were expecting certain more tax-related measures today, but except interest rate subvention, none of our demands has been fulfilled,” A Sakthivel, president of FIEO said. Rakesh Vaid of the Apparel Export Promotion Council, too, was disappointed. “Export promotion just doesn’t seem to be a priority for the government,” he said.
Soure: http://www.indianexpress.com/news/