Govt working on new incentive scheme for exporters

In the backdrop of strong demands from exporters for retaining the incentive scheme, DEPB, Commerce and Industry Minister Anand Sharma today met Finance Minister Pranab Mukherjee.

The exporters have been demanding that the tax-refund Duty Entitlement Pass Book (DEPB) Scheme, which is set to expire by the end of this month, should be extended.

"While the DEPB will end on September 30, the commerce and finance ministries are jointly working for an alternative for export incentives," sources said.

Under the 14-year-old DEPB scheme, the government spends annually about Rs 8,500 crore for reimbursing exporters on the taxes paid on import equivalent content of export products.

The main beneficiaries of the DEPB scheme are engineering, automobile and chemicals sectors.

Though India's exports have shown a remarkable performance, growing by 54% between April-July 2011 to USD 108.3 billion, there are concerns that the momentum may not be sustained in the wake of increasing economic problems
in the US and Europe.