Why are carpet traders scared of the new policies of the government - AI generated picture
Jagran correspondent, Bhadohi. Many claims are made by the government to promote exports. New announcements are made every day. Even in the general budget, many provisions have been made in the name of development of MSME sector, but instead of getting relief for small scale industries, the problems are increasing.
Leave aside new facilities, even the facilities already available are being taken away. Remission of Duties and Taxes on Export Products (Roadtape) Scheme can be seen as a hallmark. The reimbursement amount received under this scheme was halved.
This is the second time in five years that the government has cut the incentive amount. Till December 2020, five percent incentive was available on exports through the Merchandise Export from India Scheme (MEIS).
This five percent amount used to work as a lifeline for small and medium exporters, but not only was the scheme discontinued, but under the new scheme implemented in the year 2021, the amount was reduced to two to two and a half percent. On one hand, worldwide competition and on the other hand, increase in raw material prices have increased the production cost. In such a situation, the incentive amount received from the government has also become negligible.
Due to this, small and medium exporters are facing a crisis. Exporters say that amidst global competition, most of the businessmen used to export without profit. The incentive amount received from the government was considered a benefit but now doing so is like hitting an ax in the foot. Exporters say that if the government does not take positive initiative in this direction, middle class export establishments may get locked.
Two decades ago, up to 18 percent cash incentive was given. Two decades ago, the government used to give 18 to 20 percent incentive to increase exports and encourage entrepreneurs. During that time, 80 percent exporters used to export carpets worth crores without any profit with the help of cash incentives received from the government.
Gradually the facilities started being cut. A decade ago this amount was eight to ten percent but later it was reduced to five percent under the MEIS scheme. Even here the exports were satisfied but this scheme was discontinued in Dec-20.
Under the MEIS scheme, as an incentive, exporters were given licenses at the rate of five percent on the export of products. Which worked as a lifeline for entrepreneurs. On one hand, worldwide competition and on the other hand, huge increase in the prices of raw materials has increased the production cost. In such a situation, the incentive amount received from the government has also become negligible. Due to this, exporters are facing a serious crisis. - Alok Baranwal, Exporter
More than 60 percent of the businessmen in the carpet industry are mediocre. Which operate at low margins despite high costs. They used to remain in the field only with the help of incentive amount received from the government, but that too was reduced by 50 percent. For this, the message is being conveyed to the government through various mediums, but along with the central government, the state government also needs to be made aware of the problem. - Ishwarchandra Gupta, Exporter