Date:21/06/2005 URL: http://www.thehindubusinessline.com/2005/06/21/stories/2005062100260700.htm

Back Exporters hail Board of Trade move to set up working groups

K.R. Srivats

New Delhi , June 20

THE exporting community has described the setting up of five working groups by the reconstituted Board of Trade as a `concrete step' towards boosting exports from the country. It has also expressed confidence that all policy concerns would get addressed and transaction cost reduced.

Industry captains and exporters, who attended the first meeting of the reconstituted Board, raised a host of policy issues including labour law reforms, income-tax issues and transaction costs that needed to be addressed to propel export growth.

These issues were also brought to the attention of the Prime Minister, Dr Manmohan Singh, during their interaction at his residence here.

Reacting to the decision of the Board of Trade to set up five working groups, Mr O.P. Garg, President, Federation of Indian Export Organisations (FIEO), told Business Line that this was a welcome step.

He said that the interaction of the exporters with the Prime Minister and later with the Commerce Minister, Mr Kamal Nath, and senior Government officials was a "fruitful exercise."

Mr Garg said that the Prime Minister showed personal interest in understanding the problems of exporters and had promised that the Government would look into their policy concerns.

In his address at the first meeting of the reconstituted Board, the FIEO President pleaded for exemption from service tax and input stage value-added tax (VAT) on exports and also doing away of fringe benefit tax on export marketing efforts. He also expressed concern over the lack of coordination among different agencies involved in foreign trade. Mr Garg recommended the setting up of a single nodal agency for export and import that would handle the entire gamut right from formulation of the foreign policy to its implementation including grant of various benefits.

The Apparel Export Promotion Council (AEPC) Chairman, Mr A. Sakthivel, urged the Prime Minister to look into issues like labour reforms, transaction cost, involvement of the States in export effort, income-tax issues and service tax exemption.

On labour reforms, Mr Sakthivel said that the apparel industry could provide more than 250 days' employment to every person if contract labour is to be allowed and working hours increased from 48 hours per week to 60 hours per week.

He also suggested that a new section should be introduced in the Income-Tax Act that would give a weighted deduction of 150 per cent of the wages paid.

This deduction should be available only for those units that export more than 70 per cent of its production.

The Chairman of the Export Promotion Council for EOUs and SEZ units, Mr Sharad Jaipuria, submitted detailed representation on important issues relating to EOUs/SEZ units to the Prime Minister.

Besides making a case for removal of the sunset clause under Section 10B of the Income-Tax Act, Mr Jaipuria also suggested that 100 per cent export-oriented units (EOUs) be exempted from payment of central sales tax under the CST Act.