cr package for Textile Mills & Powerlooms
The government has approved a debt restructuring package for integrated
textile mills and a modernisation scheme for the powerloom sector.
The package envisages repayment of loans to banks and financial institutions
amounting to Rs.6,000 crore at 8-9 percent over five years by the
mills. Both the schemes come into effect from September 15, 2003.
The decentralised powerloom sector will be made eligible for loans
under the technology upgradation scheme with direct interest subsidy
of 12 percent to 20 percent.
Announcing the schemes, textiles secretary Shri S.B. Mohapatra and
banking secretary, Shri N.S. Sisodia told a news conference in New
Delhi on September 09, 2003 that the package would be applicable to
around 350-400 composite/integrated textile mills out of a total of
1,864 mills in the country.
Duty Drawback Norms Amended
In a bid to step up exports, the revenue department has eased the
norms for fixation of brand rate and special brand rate of duty drawback.
The Central Board of Excise and Customs (CBEC) has done away with
the Rs.5 lakh limit and permitted additional/joint commissioners of
Central excise to approve drawback without any limit.
Brand rate of duty drawback is given to exporters of those products
which do not figure in all industry rate (AIR) of drawback table.
The special brand rate is given for export of those products whose
rates are considered to be insufficient to fully neutralise incidence
of duties suffered on the inputs utilised in the production/manufacture
of export product. An exporter can opt for brand rate duty drawback
Under the scheme, exporters are compensated by refund of the amount
of customs and central excise duty incidence which is actually incurred
on the inputs used in the manufacture of export products. The exporter,
however, has to produce documents/proof of actual quantity of inputs
utilised in the manufacture of export product alongwith evidence of
payment of duties.
The CBEC, as part of the decentralisation and trade facilitation exercise,
has directed its field formations not to submit proposal for fixation
of brand rate of drawback to the commissioner of central excise for
approval. Earlier, the brand rate of duty drawback was fixed by the
Referring to specific issues pertaining to fixation of brand rate
of drawback for finished / lining leather, the CBEC has clarified
that while computing the drawback for leather articles, including
footwear, the AIR available on finished/lining leather should be considered
on the consumption of finished/lining leather in the export product.
This is being done to ensure that the duties on inputs like finishing
chemicals, pentrating agents, wattle extracts and leather dyes and
auxiliaries used in finishing raw hides are relieved.
It was further clarified by the CBEC that in case of complete bicycle,
manufactured by using various cycle parts and also certain other accessories/parts,
not listed under drawback schedule, the brand rate could be allowed
in respect of such extra parts/accessories, provided that these parts/accessories
are procured on payment of duty and not imported duty free under the
advance licence/DFRC/DEPB Scheme.
Trade Deficit $5 bn as exports Dip
Exports recorded a 9.29 percent growth during the April-July quarter,
marking a decline over the 11.06 percent increase seen upto the first
quarter. Imports rose by 22.73 percent pushing up trade deficit to
nearly $ 5 billion, more than twice as much as the figure during the
corresponding quarter last fiscal. Commerce ministry officials have
attributed the fall to the continuing appreciation of the rupee vis-a-vis
dollar, the prevailing global slowdown, and Chinas fixed exchange
States allowed to refinance maturing bonds
The finance ministry has decided to allow states to borrow from the
open market to meet the redemption pressure on guaranteed bonds subscribed
by individuals and provident funds during the next three years to
protect the interests of small investors.
According to finance ministry officials, individual and provident
fund subscriptions to state-guaranteed bonds, due to mature in the
next three years, was to the tune of Rs.4,600 crore.
The officials said about Rs.15,800 crore was due to mature during
this fiscal and the next two years.
individuals and provident funds accounted for almost 30 percent of
this, the balance was subscribed to by public sector banks, co-operative
banks and financial institutions.
Since defaults by states could have a negative bearing on sovereign
credit ratings, a committee headed by additional secretary in the
finance ministry Shri B.P. Mishra, set up in March 2003, recommended
a two-pronged strategy to prevent any adverse fallout when such state
government guaranteed bonds matured in the ensuing three years.
The ministry has decided to allow states to issue redemption bonds
to banks and financial institutions that had subscribed to state guaranteed
bonds. These bonds will carry the prevalent rate of interest, significantly
lower than their existing coupon rates.
The ministry has simultaneously cleared a proposal to set up a sinking
fund, to which the Centre will initially contribute Rs.1,000 crore.
States will earmark 5 percent of their net small savings towards this
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