Sops on the cards for job-creating industries

NEW DELHI: The Finance ministry has some goodies in store for high employment generating sectors such as leather, footwear, toys, textiles & garments and gems & jewellery in Budget 2007. Finance minister P Chidambaram has said that the government was working on concessions for certain identified employment-generating sectors to give them a boost. Mr Chidambaram also said that trade deficit was not a cause for worry and there was no need to discourage imports.

“I can live with the current account deficit. I want the importers to import what they want and our exporters to export as much as they can,” the finance minister said in response to a query following a pre-Budget meeting with export promotion councils which he addressed jointly with commerce & industry minister Kamal Nath.

Mr Chidambaram indicated that the high employment generating export sectors would be rewarded in the budget. “Some bold steps could be taken for the highly employment generating sectors,” he said when asked if tax concessions could be given to exporters in the Budget for 2007-08. Mr Chidambaram, however, refused to elaborate on what the measures could be. “Wait for the presentation of the budget,” he said.

The government is alive to the exporters’ demands, many of which have been accommodated in the past and some of them have been internalised in the system, the finance minister said. “We will continue to do so while keeping the interests of exporters, domestic industry and revenue in mind,” he said.

Mr Kamal Nath said the country’s capital goods industry needed protection and interests of exporters had to be balanced with those of the domestic industry. “Some useful suggestions have been given by the councils that would be looked at and examined,” he said.

Exporters, on their part, asked the finance minister to grant them exemption from CST. In a memorandum submitted to the government, FIEO demanded that CST should be either scrapped from April 1 or exports should be exempted from it.

FIEO also urged the finance ministry to scrap customs duty on import of capital goods from the current level of 5% under the Export Promotion Capital Goods Scheme. The memorandum said the finance ministry should to immediately solve the pending issue of curtailment of benefit under Section 80 HHC through Taxation Amendment Act 2005. The amendment provides exemption from I-T on the profit earned from sale of DEPB to exporters with export turnover of less than Rs 10 crore.