Sinha promises package to boost sagging exports

Amongst other Bills the government has also proposed to introduce the much awaited Narcotics Bill, the Money Laundering Bill and the Foreign Exchange Management Act (FEMA) to replace the Foreign Exchange Regulation Act (FERA), during the current session of Parliament, said Sinha.

The finance minister who was speaking to journalist in an informal chat after addressing the high level committee on credit support for IRDP in Capital on Saturday said that the incentive package for exportswill be designed to meet the competitive edge of East Asian economies whose drastic devaluation had given them an advantage against India in the global market.

The economies of East Asian have witnessed devaluation of their currencies ranging from 40 to 400 per cent due to the currency meltdown in the area. Sinha said since the Exim policy had been announced before the presentation of Budget this year, there was need to fine tune export incentives which the new package would take care of.

Monitoring of export policy is a continuous process and we cannot be silent after unveiling one concrete policy for the purpose in the wake of the fierce competition in the international market and changing situations, he said.

Sinha also justified the removal of withholding tax on external commercial borrowings (ECBs) saying this was done in the wake of rise in interest rates which was acting as a dampner for raising resources abroad.

Since interest rates have gone up, we felt the removal of withholding tax onexternal commercial borrowing would encourage the industry to access ECBs, he said.

Asked why industrial recovery had not taken place despite the sops announced for the sector, Sinha expressed confidence that the economy will end up with eight to 10 per cent industrial growth this financial year.

Sinha asserted that the Rs 263 crore tax concessions announced yesterday would not have any major adverse effect on the fiscal deficit as fiscal deficit has already run into thousands of crores.

The finance minister also stated that he was trying hard to push the introduction of the Insurance Regulatory Authority (IRA) Bill which would pave the way for opening up the insurance sector. He had indicated in his budget speech that all types of insurance would be opened up to the Indian private corporates and cooperatives.

He said that the government has been holding several discussions on the IRA Bill during the last few weeks and that he was still making an effort to introduce the IRA Bill during the currentsession of Parliament. He said that the matter could even be taken up during the the next Cabinet meeting.Sinha also said the government was taking steps to curb dumping in the country.