A parliamentary panel has suggested that the commerce ministry should engage with its finance counterpart for additional allocation under the recently notified tax rebate scheme for exporters ''RoDTEP'' as the budget allocation of Rs 12,500 crore for the programme would be inadequate to meet its objectives.
Last month, the government announced rates of tax refunds under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for 8,555 products, such as marine goods, yarn, dairy items. The government has set aside Rs 12,454 crore for the current fiscal.
The report of the department related parliamentary standing committee on commerce has also suggested the Department of Commerce to expedite implementation of the scheme to enable exporters to avail benefits under the scheme.
"The committee recommends the Department of Commerce to engage with the Ministry of Finance to provide additional allocation for the scheme," the Rajya Sabha Secretariat said in a statement.
The committee has recommended the commerce ministry to iron out issues that hindered the signing of free trade agreements (FTAs) with India's leading trade partners.
It called for entering into trade agreements that are beneficial for India while balancing the interest of the domestic market with that of exporters.
It noted that domestic exporters are at a disadvantage in the US and European markets while competing with other exporting countries due to absence of FTAs with these two regions.
There are issues that need to be addressed in negotiating free trade agreements with the USA and EU in view of the concerns expressed by some domestic sectors, it said.
It has asked for taking appropriate measures, relook at export strategies and policies to achieve positive growth rate of exports and higher share in global markets.
To provide affordable credit to the export sector, the committee has recommended extension of interest subsidy scheme for at least five years or till the time our interest rates are at par with rates of the competing countries.
"The committee recommends the department to revamp its efforts on promoting EOUs (export oriented units) and provide necessary support/incentives, including tax incentives, to enable the sustained increase of exports from these units," it said.
Further to cut logistics costs, the committee stated that the different charges levied at terminals and container depots be reduced to a level comparable to other modes of transport.
"...a distance based concession in the rail freight should be provided to the exporters located away from the sea port to ensure that they are able to deliver their export at a competitive rate," it said.
On container issue, it expressed concerns on the exorbitant rates charged by the intermediary, i.e., the shipping lines on movement of empty containers from port to Inland Container Depots (ICDs).
"The committee recommends that the requirement of an intermediary in this case may be abolished and appropriate strategy may be worked out to enable importers/exporters to deal directly with Railways, i.e., CONCOR for movement of empty containers from ports to ICDs," it said.
Further, the committee suggested the rail ministry to ensure that a competitive freight rate is maintained and other charges levied by it are also fixed in such a way that it does not cause undue burden on exporters.
On the matter of risky exporters, the panel stated that such a system should not come at the cost of punishing "genuine" exporters due to error in identification.
"The committee, therefore, recommends the Department of Revenue to streamline its system to avoid error in identification, send prompt communication to exporters who are identified as risky, and provide opportunity to exporters for resolution before taking further steps," it said.