an export incentive scheme may be introduced at the earliest to compensate the exporters as under-. The scheme should cover the financial loss incurred by the exporters between April 1 to September 30, 07 (tentative month for implementation). It should compensate the exporting company to the extent of say 10% to 15% for the loss incurred by them due to the depreciation of the US Dollar. The exporting company must however increase their exports over the next 3 years at least by the same percentage of incentive extended to them. The incentive should have an added benefit of say 5% for the houses that exceed the revised export targets in the successive years. The eligibility should also be extended to those cos that have lost confirmed orders at hand for which they had procured raw materials the goods in processs(unfinished) finished goods at hand not exported as a result of the cancelled orders by the importers overseas. It should also include compensation for the differential amount between the export value that it would have fetched as against the domestic sales at depreciated value. For the exporters who have open orders should also be consideres for incentives on the above lines as also those exporters who have lost their overseas clients altogether resultant from the surgt of Rupee.
I feel only an action like this will repair the damage partially though and restore confidence in the minds of the industry to rebuild their businesses. If you feel this write up wor
RE:Continuation of transmission on export incentives by arvind damle
by gatzzz on Jun 21, 2007 03:53 PM Permalink
That is stupidity to give incentives to exporters. The onus remains on exporter to adjust his business based on currency fluctations. The exporter should re-work his business model to reduce the cost of production in order to gain benefit from this fluctuations. This is purely business and ups and downs are a part and parcel of every business. Its the reponsibilty of the owner to have Plan B for every outcome.
RE:Continuation of transmission on export incentives by arvind damle
by Surya Gagan on Jun 24, 2007 09:39 PM Permalink
I completely agree with Gatzz. In the free enterprise world why would you need such incentive. Moreover, does GoI provide any incentives to local manufacturers for loss of order or any other losses? Then why do you need it for export? The whole idea of providing business-incentives is absurd. There can't be free lunch in the world...incentives are the biggest mine of curruption in India as people do all nasty things to get this free lunch...
