Source: The Stitch Times: March 2009
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The much touted third "Stimulus Package"
in as many months to boost the economy, proved yet another damp squib. The
Government has once again stuck to its principled stand of not providing any
relief to the economy in general and export sector in particular. There is
nothing sector- or industry-specific provision of relief and has brushed the
total economy with the same paint.
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Let us take the holistic look at what our Government has
done, in the name of providing stimulus, in three installments, to the economy
and to arrest the sharp downhill slide of export trade starting with the first
stimulus and ending with the third one during February, 2009 while presenting
interim Budget.
First, it should be clear that no industry- or sector-specific
provision has been made while announcing any of the three stimulus, while
faithfully and even religiously conforming to their commitment not to provide
anything for the textile and garment exports ever since the UPA Government took
over.
Briefly:
The provisions as incidentally related to textile and garment export, in each
of the stimulus packages are:
FIRST STIMULUS PACKAGE (announced on 7 December, 2008)
- Across-the-board 4% Excise duty cut
- Rs.20,000 crore in additional expenditure
- Benefits worth Rs.2, 000 crore for certain sectors,
including handloom, handicraft, gems and jewellery, leather and textiles.
SECOND STIMULUS PACKAGE (Announced on 2 Jan. 2009)
- Interest subvention of 2% on export credit for labour
intensive sectors.
- Additional allocations foe export incentive schemes
THIRD STIMULUS PACKAGE (Announced on 24 February 2009)
- General rate of Central Excise duty cut to 8% from 10%
- 4% Excise duty cuts to be extended into next fiscal
- Service tax decreased to 10% from 12%
The Stitch Times has
already analysed thread-bare the two packages that had been announced within a
span of a few days, this time I propose to examine the third stimulus package
and the impact that it is going to have or is likely to serve the purpose, it
purports to promote. To recap, neither of the first two packages had failed to
elicit any favourable reaction or acceptability from the trade and industry,
which was amply demonstrated by the comments of trade bodies.
First, what is the reaction of the industry and trade?
I fail to understand, and in fact, rue that the national
level trade bodies, purportedly protecting and promoting the interest of trade
and industry, continue to come out meekly on the impact that the so-called
stimulus packages have made. Their comments, I note painfully, are cursory,
vague and totally unequal to the needs and requirements of the ground
realities. They, as a class, want to eulogise any Government action or what I
call Government inaction or its total indifference and apathy. This would be
amply reflected in the comments of these organizations, which seem to conceal
more than what reveal.
