The Telegraph
Since 1st March, 1999
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The status-holders have been a pillar of strength in increasing exports. There is a feeling among them that under the export-import policy, substantive benefits are no longer available to them since the earlier benefits such as fast track clearance and relaxation from certain procedures, are now universally applicable in the liberalized environment. We recognize that the status holders will continue to play a significant and increasing role in boosting exports, particularly from the small scale sector, as most of the small scale units will not be in a position to directly access the international markets.

Moreover, it will be our endeavour to facilitate India emerging as a major base for outsourcing products and services for the rest of the world. They are also critical to our strategy for accelerating the rate of incremental growth of exports. Therefore, we intend to give a premium to the status holders who achieve high growth rate in their exports. It is proposed to give a duty-free entitlement to them for import of capital goods, spares, office equipment and consumables. This will be available to status holders who achieve a growth rate of 25 per cent or more in the current year with a minimum export performance of Rs 25 crore. They would be entitled to a duty free entitlement of 10 per cent of the incremental growth in exports during the current financial year. This entitlement would be subject to actual user condition which can be passed on to associate manufacturers.

Coming to the specific initiatives, the 2002-07 policy had recognized three major industrial clusters at Tirupur, Panipat and Ludhiana as towns of export excellence with a view to maximizing their export profile. It is also recognized that pro-active steps need to be taken to enhance the productivity, quality, cost effectiveness of Indian industry by bridging the gap in critical physical infrastructures by providing back up support of common facilities such as design centres, training for essential skills in the workforce, testing facilities to upgrade quality and market linkages etc. This will increase the overall competitiveness of the selected industrial locations which are predominantly export-oriented.

The department of industrial policy and promotion as a nodal department has formulated industrial infrastructure upgradation scheme which is in the final stage of approval. This scheme envisages upgradation of infrastructure in existing clusters/ industrial locations that have developed on account of local skills, market and resources. Efforts under the scheme will be supplemented by...similar schemes being implemented by other departments. To start with, ten clusters/locations with high growth potential would be supported to bridge technology and productivity gaps. Areas of intervention in the selected clusters/locations would include, inter-alia, technology and skill upgradation, physical infrastructure, environmental mitigation facilities etc. The user industry would identify the needs and implementation would be based on a participatory approach.

Like other developing countries, India is a capital scarce country. We cannot afford the luxury of dragging on indefinitely the process of either rehabilitation or winding-up of a sick unit. We have to ensure that a sick unit is quickly rehabilitated in case it is possible to do so. To facilitate this, we already have a provision for extension of the period of fulfilment of export obligation in case a sick unit is taken over. However, there is no such provision for the existing management bringing a unit back to health on the basis of an approved rehabilitation programme. To remove these lacunae, we propose to allow extension of the period of export obligation of sick units on the basis of the draft rehabilitation schemes prepared by operating agencies appointed by the board for industrial and financial reconstruction. Similar facility would be available for units outside the scope of the board for industrial and financial reconstruction and under the scheme of rehabilitation of the concerned states.

In keeping with our policy to do away with unnecessary restrictions which increase transaction costs, there will be further simplification of procedures in order to reduce these costs to a minimum. A study carried out by Exim bank in October 2002 indicates a significant reduction in the transaction cost in all the sectors covered from levels prevailing as per an earlier survey in 1998.

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