NEW DELHI: At a time when falling exports have been a cause for concern globally, the government has reduced the budgetary allocation for commodity and plantation boards and export development authorities.
The budgetary allocation for Agricultural and Processed Food Products Export Development Authority (APEDA) has been cut by 28 per cent to almost Rs 81 crore while that for Marine Products Export Development Authority (MPEDA) was reduced by a third to Rs 90 crore fromRs 135 crore in FY15-16 (revised estimates). Similar cuts have been made in allocations for Coffee Board, Rubber Board and Spices Board.
"Such big cuts in allocation are surprising...these bodies will now have to find their own ways of funding," said a commerce department official.
The country's exports in January fell 13.6 per cent year on year to $21.07 billion (Rs 1,44,000 crore), declining for the fourteenth consecutive month on subdued global demand and softening commodity prices. The country's exports this fiscal are set to fall short of the $310 billion achieved in 2014-15.
The country's exports in January fell 13.6 per cent year on year to $21.07 billion (Rs 1,44,000 crore), declining for the fourteenth consecutive month on subdued global demand and softening commodity prices. The country's exports this fiscal are set to fall short of the $310 billion achieved in 2014-15.
Last year, the government took a series of measures to boost exports including the interest equalisation scheme to provide cheaper credit to exporters for five years, expanding support to various products under the Merchandise Exports from India Scheme and revising duty drawback rates for exporters.
The cuts in budgetary allocations to boards have come even as finance minister Arun Jaitley announced more support to boost overseas shipments. Various export promotion schemes have been allocated Rs 725 crore for 2016-17. Similarly, Rs 1,000 crore has been allocated to the interest equalisation scheme launched last year to provide cheaper credit to exporters for five years.
"We knew the allocations would not be increased, but we had no idea that they would be cut, especially when exports are falling," said an official of an export promotion body. "This is contrary to the finance minister's announcement of extending incentives for exports," said the person who requested not to be identified.
Tarun Bajaj, general manager at APEDA, said: "There is benefit under the market promotion schemes which would get restricted because of the Budget cuts. The number of participants in these schemes would also get limited."
APEDA, which passes on financial benefits to around 703 product categories, plans to prioritise its allocations.
However, another official from one of the boards said the revised estimates usually go up and the commerce department always accepts demands that are put up. "We have never fallen short of funds-...whenever there is an allocation increase to the department, they pass it on to us," the person said.
