Economic Survey 2013: Urgent attention requires on infra, taxes to boost exports

Feb 27 2013, 14:21 IST
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India's exports entered the positive zone after a gap of eight months. (Reuters) India's exports entered the positive zone after a gap of eight months. (Reuters)
SummaryIndia's exports entered the positive zone after a gap of eight months.

India needs "urgent attention" on issues related to infrastructure, trade facilitation, taxes and credit in order to boost the country's exports, said the Economic Survey 2013.

According to the survey, the recent global slowdown has thrown up new challenges for India with its export growth being continuously negative since May 2012 compared to high growth rates of even above 50 per cent in some months of the previous year.

Making a marginal recovery, India's exports entered the positive zone after a gap of eight months, recording a growth of 0.82 per cent to USD 25.58 in January.

The survey, tabled by Finance Minister P Chidambaram in Parliament today, said the government has limited fiscal space and with protectionist measures of trading partners showing signs of rising, the policy options left are more at the micro level.

"Thus there are many micro, port-specific and sector - specific issues that need urgent attention. These are related to infrastructure, trade facilitation, tax and tariffs, and

credit, and can realistically be addressed in the short and medium term.

"Addressing these issues, as is currently being done by the government, can exponentially promote India's export growth," it said.

On infrastructure related issues, it said that even the best of Indian ports do not have state-of-the-art technology as in Singapore and Shanghai.

On trade facilitation measures, the survey said there is a need to simplify the multiple documentation procedures as on an average Indian exporter is required to sign at about 130 places to complete an export transaction.

These procedures and costs need to be reduced to the barest minimum. Other procedural and documentation reforms include reducing unnecessary paper work and addressing the issue of trade litigations, it said.

It also said that time limit should be fixed for disbursal of duty drawback, service tax refunds and central excise rebate claims to the exporters as delays adversely affect the

working capital and making them less competitive.

The survey asked to review the inverted duty structure under the India-Thailand FTA as finished jewellery imports from Thailand are cheaper than primary gold (raw material) available in India.

Further, it said India needs to diversify its product basket besides repositioning itself in its traditional areas of strength like textiles and leather to overcome from the global demand slowdown.

It said many challenges are there for India on the trade front.

"While India has successfully diversified its export basket, more needs to be done on the product diversification front. It also has to

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