GEA requests new Govt to introduce flexible labour norms

26 May '09

5 min read

2. To provide adequate and need-based funds to exporters at reasonable rates of interest which should not exceed 7 per cent as applicable to agriculture sector and restore 4 per cent interest rate subvention on export credit upto March 2010.

3. To restore 100% exemption to export earnings under Section 80 HHC of Income Tax Act.

4. Apart from taxation relief, GEA would expect the Government to reduce the transaction cost by simplifying administrative procedures by avoiding delays at customs clearance of goods; improving loading and unloading of cargo and infrastructure at ports to avoid congestion at various ports.

5. In view of acute power shortage the Government should encourage captive power generation by providing diesel at International prices and exempted from Excise Duty and Local Levies.

6. To exempt from Service Tax all the export related services to avoid blockage of capital of exporters, as the procedure for refund is time-consuming, resulting in unnecessary delays and harassment.

7. To exempt exporters from Fringe Benefit Tax.

8. GEA would like the Government to implement GST (Goods & Service Tax), at the earliest.

ISSUES RELATING TO MINISTRY OF COMMERCE /FOREIGN TRADE POLICY
1. To treat the exporters who export 100% of their product irrespective of their location at par with 100% EOU's.

2. To provide 100 per cent risk coverage through cheaper ECGC Scheme to encourage exporters to take risks with new markets and new customers.

3. To improve fabric processing facilities.

4. To allow duty free import of fabrics and trimmings used for garment exports.

5. To extend the Focus Market Scheme to all Markets for export of garments to further broaden our market base in these difficult times of worldwide recession rather than to restrict exports only to EU and USA.

ISSUES RELATING TO MINISTRY OF LABOUR
Garment manufacturing is extremely labour intensive and will remain so even with greater automation. A congenial labour environment is, therefore, necessary to ensure maximum productivity. The obsolete and antiquated labour legislation has hindered the growth of the extremely labour intensive garment manufacturing. The restrictive industrial and labour laws restrain management's capability to respond professionally, effectively and speedily to the fast changing dynamic international textile scenario.

The new Government should, therefore, introduce labour reforms with flexible labour laws to increase productivity. There is an urgent need for flexible labour norms specific to garment manufacturers and exporters to enable them to meet the increasing international competition. Although, the need to reform labour laws has been emphasized from time to time by various Government Committees and Commissions, the Government did not so far had the courage to implement them because of political compulsions.

It is essential that an export climate is created where the policies and procedures are made pragmatic and exporters are able to produce export quality goods of international standards with the least procedural and policy regulations at most competitive rates.

The Government should encourage large scale investment in infrastructure and also take effective steps to reduce the production and transaction costs by providing adequate fiscal and commercial relief to exporters. The Government should also make efforts to ensure financial stability in the external sector along with the much emphasized need for price stability in the domestic sector.

Garment Exporters Association

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