Date:15/06/2005 URL: http://www.thehindubusinessline.com/2005/06/15/stories/2005061501160700.htm

Back Capexil seeks Rs 5,000-crore fund to upgrade technology

Our Bureau

Chennai , June 14

THE Chemicals and Allied Products Export Promotion Council (Capexil) has sought a Rs 5,000-crore technology upgradation fund for the mineral sector.

At a seminar here today in which the Union Minister of State for Industry and Commerce, Mr E.V.K.S. Elangovan, was present, the representatives sought the Ministry's support in urging the Centre to reconsider fringe benefit tax, cash withdrawal tax and service tax on exports that pushed up costs.

Capexil members also presented a memorandum to Mr Elangovan seeking exemption from Central Sales Tax (CST) for exporters. The exporters were not getting the CST refund that they were entitled to from the local authorities who, in turn, blame the Centre for not allocating funds, Capexil said.

The members also sought the repeal of fringe benefit tax since foreign travel for marketing is expenditure and not a luxury.

Pushing for the creation of a Rs 5,000-crore technology upgradation fund, Mr R. Veeramani, Chairman, Granite, Natural Stones and Products Panel, Capexil, said that such a fund would help to strengthen this sector which would in turn benefit the rural economy.

Mining was concentrated in areas far from urban centres. Therefore, funds are needed to strengthen infrastructure, upgrade machinery and equipment. Such a fund would multiply exports 10 times, he said.

For manufacturing sector to thrive, the environment, both physical infrastructure and policy, should be just right, he said.

How can the Indian industry compete with China when a manufacturer there has the advantage of low power cost, freight cost, finance cost, favourable labour policies and high quality infrastructure such as roads and ports, he asked.

Mr Veeramani regretted that the concept of export-oriented units was being diluted. The Government was caught up with the idea of SEZs, an idea that was suitable for China, which was being directly grafted into India with focus more on urban areas than rural areas.

Mr Elangovan said that he saw merit in the industry's demand and would look into the issues.

Exports in 2004-05 were estimated at $80 billion, a 24 per cent growth over the previous year and higher than the targeted $75 billion. So the target for the current year has been pegged at $92 billion.