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EXIM Policy 2000-2001
TEXT OF SPEECH (EXIM POLICY 2000-01)
[Text of the speech delivered by Hon’ble Commerce
Minister on the occasion of release of the Exim policy is an important
document for all associated with financial sector.]
The
rapid growth of exports achieved by China and South East Asian countries
has demonstrated that given the right policies and freedom from
interference, our entrepreneurs will also ensure that we achieve sustained
quantum growth in exports. My recent visit to the various provinces of the
People’s Republic of China has been an eye opener to me. The enormous
interest evinced by the various functionaries like Mayors of cities and of
the provinces in matters like GDP, foreign investment and export
contributions of their cities, etc. is an exciting example that we can
emulate. I am proposing a major step of establishing, as in China, Special
Economic Zones in different parts of the country. The idea basically is
that in these areas export production can take place free from the
plethora of rules, and regulations governing import and export. The units
operating in these zones will have full flexibility of operations. They
would be able to import capital goods and raw materials duty free and
would also be able to access the same from the Domestic Tariff Area
without payment of Terminal Excise Duty. No permission would be necessary
for inter unit sales or transfer of goods. There would be no wastage norms
or input-output norms. They would be able to undertake job work for the
DTA units and would also be able to get their goods processed in the DTA.
The only conditions would be that the units in the Zone would have to
export the entire production and that DTA sales would be permitted only on
payment of full applicable customs duties and additional duties without
any concession. The movement of goods from and to ports to and from
Special Economic Zones will be unrestricted and without any hindrance. Any
State Government or corporate entity or individual can furnish proposals
for setting up such zones. The
Government of Gujarat has given a proposal for a Zone of 880 hectares at
POSITRA and the Government of Tamilnadu has proposed a Zone of 1012
hectares at NANGUNERY for treating them as EPZs. Taking the size into
consideration, I propose to consider them as our country’s two first
Special Economic Zones which may come into operation very soon. I want to
create a healthy competition among all our States and Union Territories
and hope that they would offer still larger areas to be declared as
Special Economic Zones. I will be writing to the Chief Ministers to give
special facilities to the units located in such zones. We expect that the
minimum size of the Special Economic Zone shall be 400-500 hectares or
more. In the meanwhile, it is also proposed to convert the existing Export
Processing Zones into Special Economic Zones though the area of such Zones
are limited due to historical reasons. Immediately, SEEPZ, Kandla EPZ,
Vizag EPZ and Cochin EPZ are proposed to be converted into Special
Economic Zones. I am also convinced that we must fully involve the State
Governments as in China in the export efforts. As far back as 1962, the
Report of the Import and Export Policy Committee has pointed out that
there was lack of export consciousness and it was not confined to
businessmen and that even the State Governments do not always seem to be
alive to the primacy of export promotion; and some of their policies,
particularly in the fiscal field, have hindered the even flow of
exports’ –– Even today, it is true; we have to create an export
consciousness among the States to tap their full export potential. Foreign
trade being a subject on the Union List, no organised institutionalised
arrangements currently exist for incorporating the States into the export
effort of the country. Even though the exports benefit the States from
where they originate, especially by way of employment generation, for the
State Govts it is a drain on their revenues because exports are by law
exempt from all local levies. Perhaps this is the reasons why the State of
Tamil Nadu and Kerala have not been in a position to promote exports to
the extent Sri Lanka has, despite having almost equal if not more
potential for exports. This is also true of West Bengal when we compare
its exports with those of Bangladesh which is presently giving our garment
exporters a run for their money. There is no reason that the highly
developed State of Punjab and the industrialised State of Gujarat should
not be able to match Pakistan in exports. It
is evident, therefore, that a way has to be found for motivating and
involving State Governments in this effort for realising the full export
potential of the country. When I mentioned this to my colleagues Thiru K C
Pant, Deputy Chairman, Planning Commission and Thiru Yashwant Sinha,
Finance Minister, they readily agreed with me and offered resources to the
tune of Rs.250 crores for this purpose at the time of supplementary budget
this year and also to improve upon the quantum of resources for this
scheme in the coming years. The details of the scheme will be announced
shortly. Under the scheme the States will be empowered with necessary
resources and requisite flexibility and initiative in decision making, to
make valuable contribution to the export effort by way of creation of
necessary export infrastructure. I hope that the State Governments will
take the initiative to create the right atmosphere for export oriented
units to be set up in their States and also involve themselves actively in
export promotion as these efforts will help create gainful additional
employment. I am also proposing to write to State Governments requesting
them to issue notification under the Industrial Disputes Act to declare
units exporting more than 50% of their turnover as public utility services
to enable them to keep their international commitment regarding delivery
schedules.
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