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Q.

Government of India has established many export oriented schemes to promote exports from the country. In the process the government has foregone huge revenues due to duty free imports and other tax exemptions. Did we really achieve commensurate exports to justify this? Your views? (Please do not limit your answer to Yes or No. Give a detailed account)

Asked by Good Citizen, 05 Apr '10 04:07 pm
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Answers (3)

 
1.

The concepts of Special Economic Zones and Export Oriented Units are borrowed from the successful example of China and other countries. If right kind of checks and balances are put in place, the returns from these projects would definitely outweigh the foregone tax revenues and incentives in the medium to long term. But in the short term, you wont notice any remarkable benefits. Rather, the foregone revenues may look huge. To be on the positive side, all the reports say that March export grew by more than 35%. That is quite an achievement. Of course, there are concerns like whether there are proper tax audit, revenue audit, strict compliance of inward forex remittance, compliance of taxation rules etc. If the government provides such data in the Budget, it would help people understand that there is a greater transparency in the system.
Answered by Tony Fernandez, 05 Apr '10 04:30 pm

 
  
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2.

The most important aspect of providing incentives to boost exports is earning precious foreign exchange. The incentives for export promotion were put in place much before the globalisation of the Indian economy and the tight and strangulating license raj of the era, effectively prevented foreign direct investment. So adding to the foreign exchange resrve kitty of the country was a real embarassing situation, particularly when India was not faring well on the export scene. The establishment of SEZ, SEEPZ etc was with the idea of earning more foreign exchange, providing incentives to exporters. Despite a recessionary marker abroad, if India could register a 35% increase in exports during the fag end of the just concluded financial year, it is because of these incentives. And all developing nations where special incentives are being doled out for export, fared well last year. The main point in the question, is whether the quantum of exports is commensurate with the amounts of incentives ...more
Answered by thampy chacko, 05 Apr '10 10:54 pm

 
  
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3.

Not possible-- i would say
Answered by conviction, 05 Apr '10 04:11 pm

 
  
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Yeah. You are right. In fact government has already been providing many incentives to industry to invest in R&D. In house R&D centers of the companies..more

Answered by Tony Fernandez