The fate of exporters battling rupee appreciation has now slipped away from the hands of the finance ministry and the commerce department. The final shape of the proposed package for exporters would now be decided by Prime Minister’s economic advisory council chairman C Rangarajan. The PMO has asked the former RBI governor to give his views on hike in the credit provided under the duty entitlement pass book (DEPB) scheme and other export incentives. Dr Rangarajan would also look into the demand for bringing more services under the exemption list for exporters.
Speaking to ET, commerce ministry officials said the revenue department had shot down most of the proposals made by the commerce department in a recent note to the Cabinet Committee on Economic Affairs (CCEA) on the grounds that they were outside the domain of the commerce & industry ministry. Therefore, the PMO had to step in.
While the commerce department has acknowledged that the proposals on interest rate subvention was an issue for the consideration of the finance ministry, it has argued that all other proposals including increase in remission under various schemes was its concern as well. “All proposals that have a direct effect on the country’s foreign trade are our concern as well,” an official said.
Mr Rangarajan will examine whether there is a need for a 1% enhancement of DEPB and duty drawback rates. He will also look at the proposal for grant of duty free tradeable scrips –– at 2% of the FOB value of exports –– for 100% EoUs, SEZs, gems & jewellery exporters and units which do not avail of drawback or DEPB.
The tricky issue of identifying more services linked to exports, for providing exemption to exports, will also have to be decided by the EAC chairman. The finance ministry has given exemption on only 12 services while the commerce department has made a case for about two dozen services.
“There is no deadline for a decision on the issue. We, at the commerce department, are hoping that the sops come early as the delay would result in many more job losses,” the official said