MP exports, others get credit

How much does Madhya Pradesh export? It is unlikely even Kamal Nath, who is commerce and industry minister and a member of Parliament from the state to boot, knows the exact figure.

Now the state government will place their case before the Centre that states like Maharashtra and Gujarat get credit for Madhya Pradesh's share of exports""in the absence of mandatory obligations from the central government agencies like the Directorate General Foreign Trade.

"Exporting companies do not mention the origin of exports. As a result, exports are shown against the states where ports are located," a state government source told Business Standard, adding that Madhya Pradesh did not get credit for what the state exported.

This is affecting fund allocations to the state under the Assistance to States for Development of Export Infrastructure (ASIDE) scheme. This year, the state has been sanctioned Rs 143 crore under the scheme. So far, Rs 33 crore has been released, of which Rs 27 crore has been spent.

"The commercial tax department of the state should be asked to make mandatory provisions for Madhya Pradesh's exporters to register the details of origin of exports, at the time of filing commercial tax and entry tax returns and applying for tax exemptions on exports," an official source said. The state government has written a letter to the Union ministry of commerce and industry in this regard.

Madhya Pradesh has seven authorised business chambers that issue certificates of origin to various companies.

However, "the Centre has also authorised bodies outside Madhya Pradesh to issue similar certificates, and it is difficult to maintain a database of exports," said a highly-placed source in the state's industries department. The issue would be brought before the Centre, he said, adding that "MP must bring in some new clause for exports."

"The School of International Business Management of the Indian Institute of Foreign Trade has advocated a restructuring of the existing export incentives so as to make them compatible with the WTO (World Trade Organisation) agreement on export subsidies and countervailing measures," a government source said.

It has also make a survey, wherein it has projected exports of Madhya Pradesh will increase to Rs 15,000 crore by 2006-07, from Rs 4,000 crore now," a government source said.

"The state government, in a letter to the Centre, has asked for an increase in the fund allocation under ASIDE. In view of the poor monitoring, various companies evade taxes," said an official source.

The Congress government of Digvijay Singh had announced a transport subsidy on exports from agri-export zones. But in the absence of a database, exporters' subsidy claims are piling up in the department of agriculture. The new government has not moved on this, either.

"On the basis of applications, the number of exporters can at best be guessed," an official in the agriculture department said.

The Centre has created agri-export zones for wheat, onion, garlic, coriander, etc. but the state's shares in the all-India exports of these commodities are negligible.