New Delhi, Jan. 12: The government today announced incentives worth Rs 500 crore to promote exports of over 2,000 products, including engineering, electronics and chemicals. It also decided to aggressively tap the markets of China and Japan.
“The incentives are being given to those specific sectors that have not done well so far and require the government’s support,” commerce and industry minister Anand Sharma said.
The commerce minister has urged finance minister Pranab Mukherjee to allow the interest subvention of 2 per cent to continue for labour intensive sectors such as textiles (including handlooms), handicraft, carpets, leather, gems & jewellery, marine products and SMEs.
Sharma said, “Many sectors have done better than anticipated while many sectors still need incentives. However, we are optimistic that in the last quarter of this fiscal, we will close the gap (with last year’s exports).”
After a 13-month contraction, exports showed a recovery in November and December, growing 19 and 10 per cent, respectively.
“The positive signals emanating from the data have given us the confidence that exports in 2009-10 could touch $165-175 billion,” Sharma said. This would, however, be lower than last fiscal’s revised export figures of $185 billion.
The sectoral package includes extension of the focused product scheme (FPS) and special FPS under which exporters are given 2 to 5 per cent incentives on their earnings. The government will include China and Japan in the market-linked focused programme under which exports to specified countries are provided incentives.
The sops will be effective from tomorrow, and the financial burden borne by the internal budget of the commerce ministry.
Sharma said 112 new products, including engineering, electronics, rubber, chemicals, plastics, carton boxes and egg powder, would get a 2 per cent incentive on earnings under the FPS.
Another 113 products under special FPS will get a 5 per cent incentive, including hand tools, parts of agriculture and horticulture machinery, sewing machines and parts, liquid pumps, nuts, bolts, washers, screws and staplers. The minister said 1,837 products would get the 2 per cent incentive under market-linked FPS.
The products in the category include machine tools, earth moving equipment, transmission towers, electrical and power equipment.
Sharma said chemicals had been included in the scheme for six months.
FIEO president A. Sakthivel said, “The continuation of the interest subvention scheme with the inclusion of the new products will add to competitiveness of exports and will ensure availability of credit for exports at reasonable rates.”
He said the government should extend the market-linked focus product scheme to the garments sector for exports to the EU and the US.
Source : The Telegraph