At present, exporters are allowed to retain only 50 per cent of their foreign exchange earnings in the EEFC account. Status-holders are companies that have been issued certificates by the ministry on the basis of export performance.
The policy also allows the status-holders from special economic zones to park foreign exchange earnings outside the country for 360 days from the present 180 days.
Union minister for commerce and industry Murasoli Maran, while announcing the policy today, pointed out that the Reserve Bank of India (RBI) was examining the question of requesting banks to treat the status-holders as prime borrowers for term loans. Besides, the status-holders would also be allowed priority finance for medium- and long-term capital requirements as per the conditions notified by the RBI.
The policy has also brought down the threshold for obtaining the status certificate as export house from Rs 15 crore to Rs 5 crore for tiny, cottage, small scale, handloom, handicraft, farm exports, services, units having ISO 9000 (series) status and exporters catering to the Latin American, CIS and Sub-Saharan countries.
The government has also allowed the status-holders to submit licence, certificate, permissions and customs clearances for both imports and exports on a self-declaration basis.
The status-holders will also be allowed to set input-output norms on priority. The policy has exempted the status-holders from compulsory negotiation of documents through banks. This has removed the bias in favour of banks by allowing the status-holders to directly interact with clients and save on bank charges. The remittances, however, will continue to be received through banking channels.
Based on all these parameters and the results expected from the new initiatives announced during the last two years, Maran has envisioned a critical mass emerging on the country's export horizon. In the new policy, he proposed to nurture this mass so that exports reach a stage of criticality from where they will perhaps not require policy support.
