Exporters’ wish-list for the 2017-18 Union Budget include an Export Development Fund to help marketing of the products of small exporters in global markets, extension of the 3% interest subsidy to merchant exporters (engaged in trading activity) and an increase in the cash withdrawal ceiling.
Stating many countries were supporting aggressive marketing aimed at the limited orders available globally following a global trade slowdown, the Federation of Indian Export Organisations (FIEO) said the government should create an Export Development Fund for such marketing particularly for small and medium exporters amounting to about 0.5% of the previous year’s exports. The present support through marketing scheme was inadequate, it said. Stating that merchant exporters contribute to more than 40% of the country’s exports, FIEO said the 3% Interest Equalisation Scheme, available now to small and medium manufacturing units, must be extended to merchant exporters.
Claiming that the demonetisation exercise of the Government has resulted in problems including payment of wages to workers, FIEO said the cash withdrawal limit may be increased from ₹50,000 per week to a monthly limit of one per cent of the previous year's turnover of each company. “The said (higher) limit can easily be operated by the banks as they have access to the balance sheet and turnover details of each firm/company,” the FIEO said.
It said the Government should also exempt merchant exporters from interstate goods & services tax against a running bond which may be debited while taking supply and credited when proof of exports is provided.
This can easily be implemented since Goods and Services Tax Network and ICEGATE (Indian Customs and Central Excise Electronic Commerce/Electronic Data interchange Gateway) will be linked, it added.
Noting that the Credit Linked Capital Subsidy Scheme (CLCSS) has helped the small scale sector to modernize and expand their production, the FIEO said the CLCSS limit was fixed at ₹1 crore about a decade back and therefore, the limit under CLCSS may be enhanced to ₹5 crore.
Also, in view of the recent developments on the GST front, the Budget should align indirect tax rates (other than custom duties) towards the standard rate of 12% and 18%. Service tax and Excise duties may move in this direction for smooth transition to the GST, FIEO said.
