Exporters, industry pleased with sops in trade policy

New Delhi: Up against weak recovery in major markets, exporters and the industry today welcomed incentives worth Rs1,052 crore, stating the steps in the annual review of the Foreign Trade Policy (FTP) will help India achieve the export target of $200 billion this fiscal, reports PTI.

In order to give immediate relief, a bonus incentive (over and above the present benefits) of 2% has been announced by commerce and industry minister Anand Sharma to sectors like handicrafts, handloom, silk carpets, leather and leather manufacturers, sports goods, toys and select bicycle parts. The extra sops are 2% of the export value.

"We are happy that the sectors, which were not doing well have been considered. Extension of the Duty Entitlement Pass Book (DEPB) Scheme and interest subvention are welcome," President of the Federation of Indian Export Organisations (FIEO) A Sakthivel said. However, extension of DEPB up to 30th June is for the last time.

In the annual supplement of the 2009-2014 FTP, government today extended fiscal incentives worth Rs1,052 crore to exporters, particularly for the labour-intensive textile, handicrafts and leather sectors, to make them competitive in the markets of the developed nations witnessing a weak recovery after the 2008 recession.

Federation of Indian Chambers of Commerce and Industry (FICCI) president Rajan Bharti Mittal said, "I hope with all these incentives we should be able to achieve the target of $200 billion". However, given the uneven recovery in the world economy, export performance needs to be closely monitored, he said.

While the country's merchandise exports have grown by 31% in the first quarter, $178.6 billion shipments in 2009-10 showed 3.5% decline over the previous fiscal because of the global economic woes.

"Special focus to the labour-intensive sectors is most welcome. The focus on reducing transaction is very critical and therefore a laudable step," confederation of Indian Industry (CII) director general Chandrajit Banerjee said.

The leather exporters are particularly pleased with the policy review.

"Commerce and industry minister Anand Sharma stepped in at the time when it needed the most. A very positive step towards inclusive growth," chairman of the Council for Leather Exports Habib Hussain, said.

To encourage garment exports to Europe where growth is still sluggish, the government has given extended benefits to apparel exporters, under Market Linked Focus Product Scheme (MLFPS), for another six months up to 31 March, 2011.

Apparel Export Promotion Council chairman Premal Udani said, "We are happy with the MLFPS. But it is only extended to Europe and not the US, which is a very important market for us."

Under the MLFPS, the garment exporters can avail 2% duty refund on exports to the European Union EU and the US.

Associated Chamber of Commerce and Industry (Assocham) said achieving $200 billion for 2010-11 is still an ambitious target as global recovery is still fragile.

"The technology imports should have also been incentivised to make Indian export competitive," Assocham president Swati Piramal said.


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Stocks vulnerable to Jairam Ramesh

Union minister for environment Jairam Ramesh comes down hard on projects that violate environment norms

Stocks of several companies may get trampled under the charge of the environment ministry with maverick minister Jairam Ramesh at the helm as he comes down hard on projects that are in violation of norms. It does not look like he is any mood to let up the pressure despite growing protests from powerful industrialists whose projects are stuck, and increasing animosity with other ministries.

Hindustan Construction Company (HCC) is the latest to be hit - the stock has come off sharply from around Rs75 to Rs65 as its ambitious Lavasa project came under the scanner due to complaints from locals. On enquiries from Mr Ramesh's ministry about violations of environment norms, the Maharashtra government has apparently said that only the first phase has been cleared. This could mean problems for Lavasa's subsequent phases.

In mid-July, NCC Power Projects, a subsidiary of Nagarjuna Constructions got a rejection from the National Environmental Appellate Authority for its thermal power project at Sompeta, 120 km from Visakhapatnam. The 2,640MW project is worth Rs120 billion. The company was going to go in for an appeal.

Mid July, the ministry also denied approval for NTPC's 261MW Rupsiabagar-Khasiyabara hydro-electric project in Pithoragarh district because it was being set up in a highly ecologically sensitive wildlife habitat on the river Goriganga in Uttarakhand. NTPC has come off from Rs205 since then, to the current price of Rs193, though not because of this, but chiefly on disappointing results. Nagarjuna's price has been affected because of this news to some extent - the stock is down from Rs185 mid-July to Rs165 now.

Vedanta Resources is also in the news of late as the NC Saxena panel report sought a ban on mining projects of the company in Niyamgiri Hills in Orissa citing violations. The committee has already accused Vedanta of illegally occupying forest land. (Read more  Activist calls for legal action against Vedanta, miners http://www.moneylife.in/article/8/4370.html) This will have implications for group company Sesa Goa. It has called its expansion of capacity from 1 million tonnes to 6 million tonnes, unauthorised.

The Naveen Patnaik government in Orissa has come out strongly against the committee's findings saying that the Supreme Court has already given its ruling on the matter. However, attorney general GE Vahanvati said that the apex court nod to Vedanta Resources' bauxite mining project in Orissa does not bind the environment ministry to give an automatic clearance to it, and that the project must be approved only on merits. Therefore, the environment ministry will probably take the ultimate call but further legal battles cannot be ruled out. In any case, the company is in for a long-drawn-out siege.

Work on the Rs300 billion Ganga Expressway Project was halted on 29 May 2009, when the Allahabad High Court ordered the UP government to get the project cleared by the environment ministry. The project, won by Jaypee Infratech, had also been facing land acquisition hurdles. Late June this year, another UP project, the Upper Ganga Canal Expressway was halted pending clearance by the Union ministry of environment and forests. Six companies had cleared the preliminary rounds for this project - among them were Era-Sibmost, IRB Infrastructure, Jaiprakash Associates, and Reliance Infrastructure. At Rs82, Jaypee Infratech is significantly below its listing price of Rs102 while Jaiprakash Associates has been oscillating between Rs120 and Rs130 for many months now.

Between 2003 and 2007, Prakash Industries, Hindustan Zinc, UltraTech and Chhattisgarh Captive Coal Mining were given captive blocks in the Hasdeo-Arand coal field (in Chhattisgarh). The block is said to have over 5 billion tonnes of coal reserves. Now the environment ministry has given the red signal for mining activities in this field citing large number of species, trees and unfragmented landscape and wildlife habitat in the region. The companies, which were already given licenses, will be allocated alternate coal blocks. However, delays are inevitable.

A recent joint survey on nine coal fields conducted by the coal ministry and the environment ministry recently concluded that almost 35% of the area under study was not viable for mining activities - the survey was conducted on fields in North Karanpura and West Bokaro (Jharkhand), IB Valley (Orissa and Chhattisgarh) Singaurali (Madhya Pradesh and Uttar Pradesh), Talcher (Orissa), Wardha (Maharashtra), Mandirgarh and Hasdeo-Arand (Chhattisgarh) and Shoagpur (Chhattisgarh and MP).

However, in a clear sign of huge inter ministerial tussles, of the 203 blocks that were declared non-viable in these nine fields, the boundaries of mines in eight coalfields were tweaked to get 77 blocks out of the barred list and apparently prompted by the Prime Minister's Office (PMO), a high-level inter-ministerial panel recommended that mining be allowed in these 77 coal blocks. It is an open secret that Mr Ramesh has made bitter enemies in the coal, civil aviation and transport ministries.

In June, bid submissions for the 4,000-MW ultra mega power project (UMPP) at Sarguja in Chhattisgarh were extended by two months because it had not received clearance from the ministry of environment and forests. The PMO was expected to intervene but has not yet done so. In April this year, Mr Ramesh said his ministry would not approve Adani Power group's proposal for drawing water from Pench Tiger reserve for its project in Madhya Pradesh.

South Korean steel major Posco's Rs540 billion proposed project in Orissa is stuck for four years now because of environmental clearance. Posco needs about 4,004 acres of land to build a 12 million tonnes per annum (tpa) steel plant in Jagatsinghpur district of Orissa - however almost 75% of this land falls under the forest cover.

JSW Energy has been warned by the environment ministry that it will have to shut down its proposed plant in Ratnagiri in Maharashtra if its operations impact fruit production (Alphonso mango) adversely. JSW is going to start a 1,200MW coal-based plant in Ratnagiri. The locals have expressed concerns that the plant will emit toxic gases, which could harm fruit production.

The City and Industrial Development Corporation (CIDCO) is making fresh pleas for an environment clearance and an approval of the coastal regulatory zone (CRZ) for the proposed airport at Navi Mumbai. However, the environment ministry looks unrelenting on this one citing diversion of two rivers, destruction of mangroves, and flattening of a hillock. There are strong rumours that the airport site may be shifted to Nevali near Kalyan and that a prominent unlisted builder, anticipating this development, has been quietly acquiring land in this area. Land prices have already shot up from Rs500,000 per acre to Rs10 million per acre within a space of a few months.

Nuclear Power Corporation of India's (NPCIL) four projects in Haryana, Madhya Pradesh, Gujarat and Andhra Pradesh have come into environment clearance problems. The Rs9 billion upgradation of the Gopalpur port from a seasonal one to an all-weather deep-water one is stuck because of environment clearance as the upgradation could affect the nesting of Olive Ridley turtles, a rare species. It is being promoted by Gopalpur Port Ltd - a joint venture between Orissa Stevedores and Sara International, which has achieved financial closure for the first phase work.

The pressure is on from international quarters as well. Mid July US environmentalist groups charged the US Export Import (Exim) Bank of succumbing to intense lobbying since it approved $600 million in loan guarantees to suppliers for Reliance Power's (R-Power) 3,960MW coal-fired project in Sasan, Madhya Pradesh. Incidentally, the Exim Bank decided not to finance the power plant citing emissions and detrimental effects on the environment.

India has 38 tiger reserves covering 40,969 sq km, 88 elephant corridors, which allow them to move from one habitat patch to another, 100 notified national parks, 355 wildlife sanctuaries, four coral reefs and 34 mangrove areas identified for protection. The environment ministry has undergone a huge change under the helm of Mr Ramesh, whose mandate was to make it more accountable and transparent.

From being accused of clearing projects without necessary investigations, the ministry is now nicknamed the 'no clearance ministry' mostly in the industrial and political circles. It is tough to assess whether prime minister Manmohan Singh will stand behind Jairam Ramesh's firm views on environment issues (since pressure from the industry is building steadily). However, for now, a lot of the smugness about easy environmental clearances is being wiped out from the face of corporate India.




6 years ago

The environment is getting destroyed before the scientist or govt can see the damage done...Honorable minister is taking utmost care to stop this loss...But things does not fall at its right place when you see the drastic difference in economic conditions of common public and privileged society...

madhavrao damle

6 years ago

Name should be changed to Absolute Nonsense Ministry. Slums are top on list of eco disaster, how come Mr.Jairam has never take any action ? Does india have any ranking as eco friendly country ? even in Asia we are way down on the list, he has some other programme

S Gandhy

6 years ago

For acting like that rare being - a cabinet minister who takes his job seriously - Ramesh will undoubtedly get the boot sooner or later. That is the tragedy of this country - those who try and do some good inevitably get sidelined, kicked out or in extreme cases, killed.


6 years ago

I would like to thank our minister jairam ramesh to interrepted in this lavasa project another wise we will lose our hotspots .
ab to sharad pawar ko aisa lag raha hai ki unki khadi fasal kisi ne kat li hai .lage rahiye sir enviornmental science department Baba saheb bhimr ao ambedkar university lko apke sath hai .


6 years ago

i think jairam ramesh ko india ki growth se problem hai

Abhishek Khudania

6 years ago

Well, the article gives me a sense of deja vu.While renewed focus and criticism of the projects is understandable; it's only a task half done.There have been inumerable instances in the past wherein initial dissent has been observed against such projects.
It remains to be seen however if such dissenting voices can lead to permanent stalling of such projects and renewed focus and execution of environment friendly and alternate energy options etc..Long way to go..


6 years ago

Till now environment ministers were puppets. Like T N Shesan (CEC), he is bringing some sense about environment. Else, politicians, bureaucrats and business looted the country.

Why Praful Patel insisting on New Mumbai Airport at Mandwa (near Panvel)? It is widely told that almost all land is purchased there by vested interests. If airport is shifted from Mandwa, these people will loose a lot of money. It's all money game yaar.

In Gujrati, we say - Raja Vayapari, Praja Bekari (When the king becomes businessman, the janata becomes beggar). How true?

These people are raping the environment from every side, which is the property of future generations and we are only the custodians.

So, lago raho Rameshbhai. Hum tumhare saath hai. Hope, he will be allowed to work and proved to be another T N Shesan.


6 years ago

Environment minister is doing a good job, but the same time he should keep in mind that some amount of environment will be disturbed in the progress path of India. He can enforce for compensatory actions like tree plantation other non used lands by these companies.
With out such restriction India soon will be garbage land and with strict restriction India may not move ahead. It should be balance act.

Mehul Purohit

6 years ago

Citizens who really care for nature should come forward and support minister by wrting PM Mr Singh to allow him to function without any external pressure and assure him his post for full tenure.

Adi Daruwalla

6 years ago

The ministries should be very clear, where the land needs to be allocated and to which industry.
The local state governments must have planned areas marked/chalked out for various projects.
These should prior to bid by any company Indian or foreign should have the environment ministires clearance for specific industry purpose as mentioned by the state government.
Is it so difficult to follow a guided path for IAS and ultra qualified babus?
It is unfair that midway to a project the its progress is halted citing these reasons. Why the red tape? Were you sleeping when the sanctions were given or that time there was less pollution and more migratory birds were flying into India. It is all of a sudden that the weight in the pocket feels less so the objections start arising. All the actions are now damn well predictable of which ministry is going to do what? Arn't we tired of this tandav they perform on us!!!! Well get on with it, give us our 20kms of roads a day, drinking water that you levy 30% cuts on, good means of telecommunication and video communication, good public transport and do all this keeping everything green. Got it. Well take it to parliament and approve it


6 years ago

very good work by Jairam Ramesh. Otherwise our politicians, industrialist and bureaucrats will spoil the natural resources and environment of our country.

Sunil Date

6 years ago

If the motives of the department are honest I am sure the Indian janata will support them. But, given the past history, I hope the " tough stand" does not convert into higher amounts for you know what.!!!


6 years ago

Lago raho Rameshbhai. Hum tumhare saath hai.

MoEF main Koi to mard aaya.

GM Brinjal ke baad corrupt industry.

Pintu Das

6 years ago

I wish all the Best to Shri Jairam Ramesh for the great effort to save the Flora n Funna and hope he will continue to do the same

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