Higher cost of credit dissuades exports

Ambika Sharma

Tribune News Service

Solan, October 25

Absence of banks dealing in foreign exchange to facilitate export oriented units in various industrial clusters of the state was acting as a major deterrent for the growth of exports.

The absence of such banks has led to higher cost of credit than the adjoining states. These findings have emerged in a study conducted by the Kolkata-based Indian Institute of Foreign Trade.

The study, a copy of which was available with The Tribune, also pointed out that according to the exporters, tax rates in the state were on the higher side. These units had invested in the state for the lure of the tax holiday available from 2003-2010 by the Central government.

The study also pointed out that exporters have inadequacy of export testing and inspection facilities, especially in the field of fruit and vegetable industry, precision engineering, textile etc.

The study has also pointed out that the exporters are demanding setting up of dedicated export zones, especially of bi-technology parks which will be suitable for state pharma companies. They also felt speedier operationalization of Integrated Textiles Parks at Una would help them and the state should also explore the possibilities of setting-up of software technology park for generating additional exports, employments and economic activity in the state. Further dedicated export enclaves will provide them readily available export infrastructure which will significantly cut-down their transaction costs.

The state figures extremely well in terms of three major indicators- which includes a very high pace of growth, higher per capita income of the state in comparison to the national average and one of the lowest levels of poverty within India.

With the lapse of the Central incentives the quantum of exports have declined in the state and goods worth Rs 2,788 crore were exported in 2015-2016 till December as against goods worth Rs 5,486 crore in 2014-2015 and goods worth Rs 5,003 crore in 2013-2014. Sirmaur, Solan and Shimla have been ranked as the key districts in terms of infrastructural facilities followed by Kangra and Mandi.

Desired change suggested in the state government policies for enhancing exports include issuance of different licences on priority, relaxation of levying of certain taxes, introduction and interaction with various organisations on a regular basis.

The study has laid stress on introducing new initiatives of tax beneficiary schemes, introduction of tax relaxation schemes, single window system for all the refunds, control over labour union and truck union and setting up of Special Economic Zone.

The study has been forwarded to the state government which will ponder over the facts to formulate the new export policy informed Rajinder Chauhan, Advisor, Industries.