New Export Promotion Measures and duh...
Worried over the decreasing exports from India, Commerce ministry came up with additional export promotion measures. The measures were announced on 26 Dec by Hon'ble Commerce minister of India. Details here.
- 2% interest subvention scheme extended for one more year, and the base broadened to include all SMEs of all sectors, and some important parts of Engineering sector, project exports to SAARC etc.
- Five new countries (NZ, Cayman Islands, Latvia, Lithuania, Bulgaria) added to the list of countries, the exports to whom, will qualify for incentives under Focus Market Scheme. Three more countries added under Market Linked Focus Product Scheme (Thailand, Taiwan, Czech) and some more products added under Focus Product Scheme. See details here.
- A new incentive at the rate of 2% on the incremental growth of exports made to US, EU, Asia, in the period of Jan-March 2013, over the base period of Jan-March 2012
The third one was 'duh'.
Let's imagine two exporting firms. Both are passing through this recession in global demand. One is lucky to have an inelastic demand for its product (say refined petroleum products, e.g. Reliance), and the other one who is affected by global slump (e.g. Brakes India, an auto component manufacturer). Who should be supported through incentives? The one who's struggling in the tough phase, or the one who is sailing well? Someone in the Govt thought that the one doing well should be rewarded; and the one who is struggling needs to be ignored. The logic beats me. Probably, it beats the current Director General of Foreign Trade too, looking at his expression below, while the commerce minister made that announcement :)