Pre-Budget consultation meetings have started as Budget 2023-24 will be presented by the Union Minister of Finance Nirmala Sitharaman on 1st February 2023.
In such a pre-budget meeting with the Union Finance Minister, Federation of Indian Export Organisations (FIEO) said that depreciation of the rupee against the US dollar is affecting exports’ competitiveness so the export sector requires Government support.
A Sakthivel, President, FIEO also highlighted that when global demand is declining, it becomes all the more necessary to go for aggressive marketing. However, most of the Indian companies are cutting their marketing expenditure in view of contraction. This may impact the country because if we are not visible in the market, we will not get whatever little demand there is and may not be able to exploit it when the global situation improves.
So therefore, for aggressive marketing, there is a need for creation of an Export Development Fund with a corpus of minimum 0.5 per cent of preceding year’s exports.
It was also highlighted that the Government may provide a 200 per cent tax deduction on the expenditure made by the exporters for overseas marketing. Such a move will encourage and help the showcasing of Indian products overseas.
The credit rate for most of the MSMEs has already crossed the double-digit mark and is currently between 11-13 per cent. We expect the same to go further in the next few months or so. Therefore, there is an urgent need to restore the interest equalisation benefit of 5 per cent to MSMEs and 3 per cent to all 410 tariff lines as it existed prior to October 2021, as cost of credit has crossed the pre-Covid level and is adversely impacting exporters.
FIEO urged the Government to provide fiscal support to units that provide additional employment in the export sector. Such a scheme will also help the workers to move from informal employment to formal employment, which is a priority of the Government. Incentives may be provided based on twin criteria of growth in exports and growth for workers so that while on one hand, when exports are increased, on the other, the employment-intensive units also get a boost.
