Goyal proposes to discontinue export incentives for services exports under SEIS
The foreign trade policy provides tax incentives under the Service Exports from India Scheme (SEIS) to several services industries.
Depending on the nature of services, the government gives duty credit scrips or certificates. The scheme offers reward at 5 per cent or 7 per cent of net foreign exchange earned and covers service providers located in India.
"So, I am proposing that from the earliest opportunity, (we should) discontinue this SEIS in its current form. It has not helped us to increase our exports positively," he said here at a function.
He said that industry has to get out of the mind set of subsidies as they are detrimental to India's long-term interests.
"For example, we now give subsidies on services exports. I have gone through the list in great details, barely 2,200 companies take that subsidy. Some of them are such large names, making 1000s of crores of rupees of profit, that there is no business of giving them a subsidy," he said.
The minister wondered that if those big companies do not get this subsidy, will they stop providing those services.
He suggested that the subsidy can be used to promote sectors like tourism.
"...tourism...has huge untapped potential... which are the areas where we need targeted support for a defined time frame to get better value addition," he added.
Further, Goyal said countries that do not provide reciprocal opportunities to Indian companies in their procurement programme, India would also not allow them.
"I would urge all to use this reciprocity clause and if you do not use, you are actually hurting India's interest," he said.
On the liquidity issue, the minister said there is a little bit of liquidity crisis because banks have become discerning in giving loans nowadays.
"Borrowers have become conscious that they have to repay.... Now, big people have to repay their money. You may be anybody, you may have any surname in this country, everybody is required to repay his loans," he said.
He also appealed to all large companies such as L&T and Maruti to start a programme to pay their suppliers in time.
"Can I appeal to all large companies to start paying your suppliers within a week or 10 days," he said.
He asked his ministry to identify 100 public sector undertakings and 250 top Indian companies to monitor how many companies are taking this appeal forward.
Goyal also pitched for expanding India's exports basket and ship value-added goods.
"Today, we are not world leader in anything... can we identify certain manufacturing and services sectors, where we can take leadership roles," he said. RR HRS