Export sops not matching returns — MoF

The refund of such duties will work out to roughly 42 per cent or Rs 14,000 crore of the net revenue anticipated by the revenue department during the current fiscal (1998-99), up 12 per cent from the preceding two years. "Is there a corresponding increase in the export earnings," questions the revenue department.

What was more, revenue department sources explain that the concessions granted to exporters do not include exemption from sales tax and the concessional interest on pre-shipment and post-shipment credit.

The export credit has become a hot topic among various ministries and the RBI. Commerce MinisterRamakrishna Hegde had recently flayed the RBI and MoF for not lowering interest rates on export credit. RBI Governor Bimal Jalan had ruled out cut in export credit rates as exporters are already getting lower rates than others.

Sources suggest that the commerce ministry which is in charge of export promotion conduct a sample survey, of say 10,000 exporters, and find out the reasons for their poor performance. In this country, exporters are being "pampered" without any proper accountability, sources lamented.

It is understood that in countries such as Thailand and the Philippines which have benefited from their recent currency devaluation, credit is given to exporters six months after shipment. The situation is quite different in India where exporters are compensated for customs and excise duties by refunding them 99.99 per cent of such duties in the form of drawback almost immediately after shipment. The only flexibility available in the above two countries is that such credit can be utilised for sundryitems like electricity bills.

Again in China, which is not a member of the World Trade Organisation, exporters are asked to pay 17 per cent of value added tax on all imports and a flat rate of only 10 per cent of it is rebated.

While unveiling the revised exim policy on March 31, commerce minister Ramakrishna Hegde had pointed out that even the export growth rate of 0.41 per cent during April-January 1999 was not something to be "scoffed" at. Revenue department sources further say that while the export performance has been rather dismal, there have been demands from exporters for additional incentives. "For how long can we go on giving concessions without any corresponding increase in export earnings," sources asked.