Govt expands recession cover

New Delhi: In a bid to give sagging exports a fillip, the government on Thursday decided to extend the Duty Entitlement Passbook Scheme (DEPB) till December 31, 2010. Exporters get credit against taxes paid on input and other benefits under DEPB Scheme.      The other booster schemes, which were announced earlier, will also continue. Some of the such schemes are 2 percentage points interest subvention on pre-shipment credit and enhanced insurance coverage through Export Credit Guarantee Corporation (ECGC). These measures will now continue till March 31, 2010.      ECGC provides a range of credit risks insurance cover to exporters against loss in exports of goods and services. It also provides guarantees to banks and financial institutions to enable exporters to obtain better facilities from them.      The government also proposed to relax the Export Promotion Capital Goods (EPCG) Scheme to facilitate export of second hand plant and machinery. "Export obligation on import of spares, moulds and others under the EPCG scheme has been reduced to 50% of the normal specific export obligation,'' the trade policy said. In the foreign trade policy, the government has also allowed exporters to import capital goods at 0% duty as against the existing 3%.      As the existing export markets are reeling under recession, the government has decided to expand its Focus Markets Scheme (FMS). It has included 26 markets —16 in Latin America and 10 in Africa and CIS countries —in the list of FMS. The policy has also increased the support extended to exporters from 2.5% to 3% of the value of the exports if they cater to these markets, which include South Africa, Nigeria, Tanzania and Brazil.      Besides this, the government has also increased the incentives on the focus products from 1.25% to 2%. Commerce minister Anand Sharma said that labour incentive sectors like leather and garments have included in the focus products scheme.      Exporters and industry bodies like Fieo, CII, Ficci and Assocham welcomed the policy. As the exporters are finding it difficult to fund imports to do value addition and then exports, the government announced step like dollar credit to exporters by banks. This will be overseen by a high level committee, comprising finance secretary, commerce secretary and the Indian Banks Association.      The government would also take special measures to reduce the cost of transactions and to simplify the procedure. Sharma said that the ministry would promote the use of electronic system.  Arresting The Slowdown  26 new markets — 16 in Latin America and 10 in Africa and CIS countries — have been added under Focus Market Scheme (FMS). Incentive to markets under FMS has been increased to 3% from 2.5% of value of exports (exporters will get back this amount in cash)  • Incentive on products under FMS has been increased to 2% from 1.25% of value of exports  • Two percentage point  interest subvention on export finance till March 2010  • Banks to extend dollar credit to exporters  • EoUs can import capital goods at zero duty  • EoUs can sell 90% of the output in domestic market instead of 75%. But over a period of time 50% of the production has to be exported  • DEPB scheme is extended till December 31, 2010  • Diamond bourse will be set up to make India a diamond international trading hub  • Limit on value of goods carried for participation in overseas exhibition has been raised to $5 million from $2 million. That on samples has been increased to $1 million from $0.1 million