New Delhi: The Government needs to provide a relief from income tax, waive fringe benefit and service taxes and make export credit cheap in the forthcoming budget to arrest a decline in exports, an umbrella body of exporters said on Tuesday.
Exports, which have been falling since October 2008, fell 33.2 percent in April, as a global slump cut demand. The trade secretary said on Monday the decline is expected to last until September before a recovery starts. The exporters sought income tax exemption on export profits for five years, an extension of interest subsidy on bank loans until March 31, 2012, and cheaper export credit at 7 percent.
"Once all our requests are met, we can definitely achieve this $200 billion (exports) in the coming year," said A Sakthivel, president of the Federation of Indian Export Organisations (FIEO), after meeting Finance Minister Pranab Mukherjee.
Exports, which stood at $168.7 billion during 2008/09, is expected to remain flat in the fiscal year to March 2010, the junior trade minister said on Monday.
However, Sakthivel said with the government support exports can grow 15 percent in the current fiscal. Exports contribute close to a fifth of India's gross domestic produce and its contraction has impacted factory output and overall economic growth.
The contraction has left 5 million people jobless in the last fiscal, Sakthivel said, adding there could be further job losses with a "minus growth rate". Last week, Mukherjee said the government was considering more relief measures for export oriented sectors like textiles, leather, gems and jewellery.
Policy makers fear worsening of economic situation in the United States and Europe may continue to slash India's exports. The World Bank has forecast global trade to shrink 6.1 percent this year as a result of the crisis while World Trade Organisation forecast a 9 percent contraction.
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