Budget to be in sync with Exim Policy

RUN UP TO THE BUDGET 2004-05

The government is working on integrating the proposals in the Budget and the Exim Policy to boost exports from the targeted employment generating sectors, Commerce and Industry Minister Kamal Nath said today.

"We had discussions on the Budget and the Exim Policy proposals to see that both were well integrated, so that the exports from the targeted sectors get a boost," Kamal Nath told reporters after a two-hour meeting with Finance Minister P Chidambaram.

Though the minister did not disclose the details of the proposals put before the finance minister, officials said the two ministries were trying to iron out differences on fiscal issues related to special economic zones.

The government proposes to put in place a comprehensive legislation to encourage investment in these zones. In addition, the commerce department has sought simplification of rules so that exporters are able to reduce transaction costs.

For instance, a lot of procedures related to audit of export-oriented units were time-consuming, they added. The commerce ministry is also pitching for availability of cheaper credit for exporters to make them more competitive in the international market.

Today's meeting, 10 days ahead of the Union Budget, assumes significance with Kamal Nath promising to take up the exporters' cause after detailed presentations made by export organisations like the FIEO.

"Heads of export organisations had met me, as well as the finance minister. We have to see what leverage can be rightly provided to enable export growth," he said.

The revenue department has opposed the continuation of some export promotion schemes citing leakages in the past. While the revenue department is of the opinion that tax exemptions are misused by exporters, leading to a loss of revenue of Rs 25,000 crore, nearly half of the total customs mop-up annually, commerce department feels, without tax incentives, exporters will not be able to face global competition.

The commerce department is of the opinion that high input and transaction costs need to be offset to make Indian exporters more competitive.