Govt likely to reshuffle exports stimulus: Scindia

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SME Times News Bureau | 09 Mar, 2010
The government may withdraw incentives offered to certain export-oriented sectors and reallocate them to industries that are still struggling for survival after a review in April, said the Minister of State for Commerce and Industry, Jyotiraditya Scindia, on Tuesday.

"After a review of the working of the various incentives, a decision for any kind of change in the stimulus measures for the sectors coming out from the impact of global financial meltdown will be taken after March 31," Scindia told reporters in New Delhi.

India's merchandise exports have been showing signs of recovery for the third straight month after declining 13 successive months since October 2008 on account of the global economic meltdown.

But while some sectors like tobacco, spices, man-made yarn, gems, chemicals and jewellery have shown satisfactory export growth in the past few months, textiles, handicrafts, carpet, engineering goods are still reeling under the impact of global crisis.

The government had provided over Rs. 1.80 lakh crore as part of three stimulus packages to prop up the economy against global downturn. Also, the Commerce Ministry had given enhanced assistance for exploring new markets to exporters and extension of duty refund scheme till December 2010, besides other sops.

Scindia also also said his Ministry had requested Finance Minister Pranab Mukherjee to at least retain the allocation of Rs. 3,652 crore for the Ministry as in the previous year. The government had provided over Rs. 1.80 lakh crore as part of three stimulus packages to prop up the economy against global downturn.

The minister, in a written reply in the Lok Sabha on the same day, also informed that the government has announced export incentives on 12.1.2010 for over 2000 items under Focus Product Scheme (FPS), Market Linked Focus Product Scheme (MLFPS) and Vishesh Krishi and Gram Udyog Yojna (VKGUY) under the Foreign Trade Policy (FTP) 2009-14. Further, Japan and China have been included in the MLFPS.

The incentives announced by the government in FTP have contributed significantly to arrest the decline in exports in the wake of global slowdown. The recent incentives are aimed to support exports of the products/sectors including those that are still facing decline or slowdown in exports, Scindia said.