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April 1, 2000
Political parties, industry air extreme reactions to Exim Policy
The Politburo of the Communist Party of India (Marxist) has criticised the Exim Policy 2000-2001 and termed it as against the country's interest.
Restrictions on imports of 714 items had been removed. This policy went against the interests of farmers, workers and small-scale and medium entreprenuers, the party said.
The opening of imports affects a wide range of consumer goods and agricultural and dairy products such as wheatflour and milk. Due to placing milk products on the Open General Licence list, milk prices had crashed.
Domestic industry is going to suffer due to the opening of floodgates for imports. Fifty-eight items belonging to the small-scale sector were now being placed on the OGL. This had effectively dismantled the reservation for the small-scale sector.
The party further says that the policy of large-scale import liberalisation has not helped the country as exports continue to grow at a sluggish rate.
The party warned the government that anti-labour practices would not be tolerated.
Chidambaram hails move to create special economic zones
Former finance minister P C Chidambaram has congratulated the government on introduction of the special economic zones under the new Exim Policy terming it as a 'welcome initiative'.
He said the government has to do the homework as to what will be the tax and forex regime under the special economic zone.
He also congratulated the government for maintaining the policy book to 60 pages. ''Fortunately, every one has accepted more free trade, more liberalisation, less regulation and eventually an almost free export-import regime.''
The commerce ministry is doing a commendable job by trying to simplify the policy, he said.
The former finance minister said the quantitative restrictions' regime has to be dismantled under the WTO regime and ''the commerce ministry has done the right job by removing QRs on the 714 items''.
On Duty Entitlement Pass Book, he said, ''I don't understand why the government has done away with the pre-export DEPB and retained the post-export DEPB. It should have been scrapped completely. There is no logic in maintaining a post-export DEPB with a pre-determined price.''
However, there is a neat arrangement of removing the threshold limit, he said.
On Export Promotion of Capital Goods scheme, Chidambaram said, manageable EPCG can be had by scrapping of the export obligations. Since price of monitoring the export obligations is going to be high, the answer is to scrap them.
On conversion of export promotion zones and free trade zones into special economic zones, he said, the methodology has to be worked out.
As regards the special incentives for biotech, granites and several other items, he welcomed them, saying these sectors do deserve an incentive.
Antony says the policy would ruin Kerala
Congress Working Committee or CWC member A K Antony today said the new Exim Policy would adversely affect the Kerala economy as it had lifted restrictions on the import of 714 items.
With the inclusion of coconut products, rubber sheet, rubber-based products, umbrella, handloom, beedi, tiles, fish, coffee, tea, pepper, cashewnuts and spices in the list, the agriculture sector and khadi-based industries in the state were heading for a crisis, he said in a fax message to the prime minister.
On the other hand, the state had very little to cheer about getting new projects in the policy, said Antony, who is also the opposition leader in the state assembly.
Holding that the new policy came in the wake of a series of similar adverse decisions by the Bharatiya Janata Party-led government, he urged the prime minister to direct the Union commerce ministry to take steps to contain consequences to the minimum.
BJP says exports earnings would rise
The BJP has welcomed the new Exim Policy. "It would help in accelerating export earnings."
The party appreciated the scheme for setting up special economic zones at Pipavav in gujarat and Tuticorin in Tamil Nadu and also the proposal to convert the existing export processing zones at Bombay, Kandla, Visakhapatnam and Kochi into special economic zones. This would definitely boost export earnings, it said.
Similarly, reintroduction of the replenishment scheme would help exporters in importing the inputs directly required in manufacture of export goods without payment ofcustoms, duty, surcharge and special additional duty.
The party said that the proposal of involving the state government in export promotion would help in stepping up export promotion efforts.
Trade union body terms it 'anti-people, anti-national'
The Maharashtra unit of the Centre of Indian Trade Unions today criticised the Exim Policy. "It is anti people and anti-national," it said.
The policy will further cripple the growth of indigenous industries and agriculture.
Removal of the little restrictions presently in the force on import of 714 items and including a further list of 715 items for importing from foreign countries without any restrictions, will adversely affect the domestic industries and agriculture sector, especially small and medium ones, CITU said.
A total of 1,429 imported items of dometic consumptions, including agricultural products, textiles, tea, coffee, vegetables and milk, will be available in the Indian markets without any curbs, and this will destory the domestic industries and agriculture, he pointed out.
Expert calls for management approach to exports, imports
Noted management consultant and president of the Indian Insititute of Strategy and Leadership, Prof Shyamal Datta Gupta, said the policy will push up the country's exports.
Gupta, however, pointed out that the new Exim Policy might lead to more confusion because the big units will have licence to exploit the small sector in the name of exports.
The entire export policy will require a management perspective instead of the bureaucratic style. He offered help, cooperation and assistance to make it management-oriented.
Gujarat body sees exporters joining the global league
The Gujarat Chamber of Commerce and Industry has welcomed the policy. "It is not only positive and pragmatic in many respects, but also essentially embodies strategy for export-led growth and development in the economy, which will enable the Indian exporters to become global players in the world economy," the chamber said in a statement.
''We are confident that the country will achieve export growth target of over 20 per cent in the year 2000-01. Opening of flood gates of imports of 714 items mainly pertaining to processed foods and household items will no doubt make consumer the king in the country, but it is apprehended that it may have a telling effect on serious competition in the market for domestic manufacturers,'' it said.
The GCCI said the basic thrust of the policy is to provide much needed momentum for exports. With that in view the initiatives taken to establish special economic zones in Gujarat and Tamil Nadu and to convert four of the existing export processing zones -- Santacruz, Kandla, Visakhapatnam and Kochi -- to free trade zones are indeed steps in the right directions.
However, the GCCI said, in order to make special economic zones as effective and efficient instruments of export promotion as those in China, it is absolutely essential that they should be freed from labour laws and banking laws and permitted to carry out job work in domestic tariff area.
It said that cent per cent FDI inflows in such zones will facilitate larger import of funds and technology leading to maximisation of exports.
It said, what is more creditable is the fact that the long awaited rationalisation of existing export promotion schemes will go a long way in making imports and exports easier.
In this context, extension of the Export Promotion Capital Goods Schemes uniformly to all sections, including capital goods, without any threshold limit of payment of five per cent duty, reintroduction of duty free replenishment licence scheme , rationalisation of rates under DEPB and removal of threshold limit of Rs 200 million are indeed positive features.
The GCCI said the initiative taken by the central government to involve the state governments in export promotion activities is a welcome step in as much as combined efforts of all the stake-holders in export promotion, he added.
Rajesh Pilot sees problems for the farmer
Another CWC member Rajesh Pilot has said lifting of import duty on agriculture products by the government will adversely affect the Indian farmers and will damage the food security of the country .
He asked the government to come out with a detailed analysis of how they are going to protect the Indian farmers and guarantee food security .
Pilot pointed out the validity for implementing the WTO agreement is 2003 and as per the secret understanding with the USA, it is 2001 .It is intriguing as to why the government had suddenly advanced the announcement of the lifting of import restrictions to March 31, 2000.
The congress leader said the government decision had shocked the farming community and, he, sharing their concern, will take up cudgels on their behalf.
'QR removal will hurt small scale sector'
The Laghu Udyog Bharati or LUB has criticised the new policy as the removal of QRs on 58 items reserved for the small scale sector will have an adverse impact on the domestic industry.
LUB President Sudarshan Sareen said in a statement that ''the policy has not given due attention to needs and expectations of the small scale sector and removal of QR is against the declared policy of the present government to protect small scale industry.''
Sareen said that free imports shall obviously have an adverse impact on the domestic industry, specially the SSIs. As the local taxes have increased making the domestic products incompetitive in foreign markets, SSIs stand to lose the home ground as well as foreign markets.
D-G of Foreign Trade clarifies on 'deemed exports'
Director-General of Foreign Trade N L Lakhanpal today clarified that 50 per cent export criteria for a unit to be declared as public utility will not include deemed exports.
Answering queries of exporters at a function organised by the Confederation of Indian Industry in New Delhi on Saturday, Lakhanpal said only actual exports will be taken into consideration while requesting states to declare a unit as a public utility.
Commerce Minister Murasoli Saran yesterday stated that he will request states to treat all units exporting more than 50 per cent of their turnover as public utility services.
Lakhanpal said goods going to special economic zones from domestic tariff areas will be considered as deemed exports.
Joint DGFT L B Singhal said, uniformity is maintained between deemed exporters and demostic suppliers. In cases of deemed exports where basic customs duty or surcharge is not there, domestic suppliers will also be assisted through special impressed licence and duty drawback refunds.
In cases where imported goods are exempted from countervailing duty, domestic suppliers will be exempted by way of concessions on terminal excise duty.
'Policy is against Directive Principles'
The Exim Policy is ''anti-small scale industries and against the basics of the Directive Principles of State Policy framed by the founding fathers of our constituion, said the Bombay Small Scale Industries Association in a statement.
The cottage industries, tiny and village industries as well as small scale industries, will be severely affected due to the removal of all the restrictions on import of 714 items and including a further list of 715 items for importing from foreign countries without any restrictions.
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