Ahead of the budget, handicraft exporters have demanded incentives such as opening of warehouses in major markets, exemption from service tax and inclusion of artisans in MNREGA.
The exporters have also demanded restoration of interest subvention scheme in the Union budget to be presented on February 29.
Pitching for exemption to handicraft exports from service tax, the Export Promotion Council For Handicrafts (EPCH) said: “For example, participation in fairs both in India and overseas is important for export promotion and service tax on business exhibition organised within India to be exempted from service tax”.
The council has also suggested that funds allocated under Market Development Assistance Scheme (MDA) and Market Access Initiative (MAI) and which at present are around Rs 50 crore and Rs 200 crore respectively be increased substantially.
Besides, to cater to the issue of irregular employment opportunities to handicraft artisans, it suggested that the handicraft artisans may be covered under MNREGA scheme.
“The connection of MNREGA scheme to the artisans in the handicraft sector would provide stability of production and supply and potential availability of volume.
“It would lead to reduction in prices of handicrafts and better development of artisans. It would also lead to development of interest in the sector,” EPCH said.
Among other suggestions, the council asked the government to restore the interest subvention and increase it from 3 per cent to 5 per cent. It also requested inclusion of ‘Merchant Exporters’ in the list of exporters eligible for benefit of interest equalization scheme.
It demanded that sale of handicrafts items to foreign tourists be considered for deemed exports benefits.
“The provisions of ‘Deemed Exports’ benefit on the sale of handicrafts items to foreign tourists existed till 1990-1993 in the Exim policy. The provision had existed till 1990-93 Foreign Trade Policy,” EPCH said.
It asked the government to incentivise exports through e-tailing mode and establish an extensive network of warehouses and distribution channels to help save time and cost and also compete with China.
Handicrafts exports during April-January stood at Rs 17,254.45 crore, registering a growth of 10.25 per cent over the same period last year