CMP powers Kamal Nath’s trade policy

Apart from tinkering with incentives for specific sectors, Nath’s big-picture announcement is the setting up of an Inter State Trade Council, a platform to create competition among states to adopt economic policies like tax framework and labour laws to compete for investments in export-oriented companies.

In terms of numbers, India’s exports posted a healthy 24 per cent growth, touching $80 billion, surpassing the target of $68 billion. The target for next year is $92 billion. There is a $25-billion trade deficit as imports were $105 billion.

In a major relief to exporters, Nath said all income tax notices to exporters under Section 80 HHC for 2001-02 onwards would now be held in abeyance, thanks to intervention from the Prime Minister.

The Prime Minister’s Economic Council will now examine issues relating to taxes on profits from DEPB (Duty Entitlement Pass Book scheme) sales involving Rs 13,000 crore export earnings, exemption of service tax to Export Oriented units (EOUs), extending deemed export benefit to DTA units for supply against ‘served from India scheme certificate’ for service providers. The Council has been given 30 days to submit its report.

To cut transcation costs, Nath outlined some reforms measures like a single application form)—‘‘Aayat-Niryat’’—which has been prescribed for exporters reducing 60 per cent paperwork. Exporters filling 102-page forms so far will now have a 50-page form to fill.

To accelerate exports under the Advance Licensing Scheme and to incentivise fast-track companies, firms fulfilling 75 per cent or more of their export obligation in half the original obligation period shall be freed from the balance export obligation. The ALS has been rationalised, allowing clubbing of licences for export regularisation and permitting transfer of duty free material imported under licence from one unit of a firm to another.

Nath also outlined steps to streamline procedures and laid thrust on agri exports, including removal of export cess on farm and plantation commodities. Translating the Trade Policy for the countryside, Nath announced benefits under ‘‘Vishesh Krishi Upaj Yojana’’ for agricultural, dairy and poultry products including flowers, fruits and vegetables allowing exporters to get duty credits against exports.

Promoting Brand India, Nath said a trademark would be developed for the handloom sector on the lines of silk mark and woolmark.