New Delhi: Finance minister Pranab Mukherjee on Friday said measures initiated in Budget 2011 would help revive private investments and put the economy back on 9% growth. He said for 2009-10, GDP growth has been "impressive" at 7.2%.

Mukherjee said the measures that would help revive private investments include enhancing allocation to the MSME sector to Rs 2,400 crore, increasing the limit for presumptive taxation, raising the threshold for compulsory auditing of accounts of small businesses, extension of interest subvention for exports in certain sectors and exemption from capital gains tax to facilitate conversion of small businesses to limited liability partnership (LLP) format.

I am optimistic that the measures I have outlined in this year's Budget will revive private investment and put the economy back on the growth path of 9% per annum," the FM said on the sidelines of Small Industries Development Bank of India's foundation day celebration.

Elaborating on the role of micro finance, FM said it has emerged as a new channel of economic empowerment and attainment of Millennium Development Goals. "The government aims to double credit flow to MSME sector within five years," he said and promised to implement recommendations of a report of the PM's Task Force on MSMEs set up to address various issues and concerns of the sector.

We expect the economy to grow by 7.2% in 2009-10 which is impressive by global standards," the FM said and added that the growth rate will climb back to 8.25%-8.75% in 2010-11.

The good news is that the world economy today seems to be recovering from the meltdown crisis of 2008-09," the FM said. The fast-paced recovery of the Indian economy underscores the effectiveness of the policy response of the government in the wake of this financial crisis, he added.

India’s exports during February, 2010 were valued at US $ 16091 million (Rs. 74547 crore) which was 34.8 per cent higher in dollar terms (26.7 per cent in Rupee terms) than the level of US $ 11941 million (Rs. 58822 crore) during February, 2009. Cumulative value of exports for the period April-2009 to February-2010 was US $ 152983 million (Rs 727345 crore) as against US $ 172379 million (Rs. 774585 crore) registering a negative growth of 11.3 per cent in Dollar terms and 6.1 per cent in Rupee terms over the same period last year.

India’s imports during February, 2010 were valued at US $ 25057 million (Rs.116082 crore) representing a growth of 66.4 per cent in dollar terms (56.4 per cent in Rupee terms) over the level of imports valued at US $ 15062 million ( Rs. 74198 crore) in February, 2009. Cumulative value of imports for the period April, 2009- February, 2010 was US $ 248401 million (Rs. 1180124 crore) as against US $ 287099 million (Rs. 1289412 crore) registering a negative growth of 13.5 per cent in Dollar terms and 8.5 per cent in Rupee terms over the same period last year.

Oil imports during February, 2010 were valued at US $ 7636 million which was 97.4 per cent higher than oil imports valued at US $ 3869 million in the corresponding period last year. Oil imports during April, 2009- February, 2010 were valued at US$ 73230 million which was 18.2 per cent lower than the oil imports of US $ 89492 million in the corresponding period last year.

Non-oil imports during February 2010 were estimated at US $ 17421 million which was 55.6 per cent higher than non-oil imports of US $ 11193 million in February, 2009. Non-oil imports during April, 2009- February, 2010 were valued at US$ 175171 million which was 11.4 per cent lower than the level of such imports valued at US$ 197607 million in April 2008- February, 2009.

The trade deficit for April 2009- February, 2010 was estimated at US $ 95418 million which was lower than the deficit of US $ 114721 million during April 2008 -February, 2009.

A total of 48 proposals from Gujarat regarding setting up of Special Economic Zones (SEZs) have been accorded formal approval out of which 30 have been notified. A total of 10 SEZs are already exporting. Details like sector, location, area, etc. of SEZs are available on the website: www.sezindia.nic.in

Three Agriculture Export Zones (AEZs) have been set up in Gujarat. An investment Rs.30.33 crore have been made in these AEZs and exports of Rs.302.14 crore have been made.

As on 31st December, 2009, an investment of Rs.56,713 crore has been made in SEZs in Gujarat and direct employment for 47,324 persons has been generated. Also, total export of Rs.23,931.50 crore has been made from SEZs in Gujarat during the financial year 2008-09. Exports of Rs.67,052.15 crore have been made by SEZs in the state during the first three quarters of the current financial year.

The Approval Committees under the Development Commissioners constituted for each Zone, which comprise representatives from Customs, Income-tax, State Governments etc. have been directed to monitor the performance of the SEZ Units. This includes scrutiny of Annual Performance Report (APR), Quarterly Performance Report (QPR) and details of rent recovery. Failure to meet the requirements of the scheme or any violation attracts action under Foreign Trade (Development and Regulation) Act, 1992.

This information was given by Shri Jyotiraditya M. Scindia, Minister of State for Commerce and Industry, in a written reply in the Lok Sabha.

During an informal interaction with the media on the outcome of the General Budget 2010-11, Shri Anand Sharma, Union Minister of Commerce and Industry, has stated that the support and incentives for Special Economic Zones (SEZs) will continue without any dilution. Earlier, SEZ unit holders and developers had raised concerns regarding continuation of tax benefits like income tax holiday after the Direct Tax Code comes into effect, replacing the existing Income Tax Act. The Minister informed the reporters that the Finance Minister in his Budget speech has said that the government is committed to ensuring continued growth of SEZs to draw investments and boost exports and employment.

Replying to a question raised by the media on continuation of sops to Export Oriented Units (EOUs), Shri Sharma said: "if there are any issues, we will assess and if there are legitimate concerns which may have serious impact, we can always take it up with the Finance Minister". He also informed that some other policy issues concerning the labour intensive units, would be addressed soon.

As regards exports, which have turned positive after 13 months since November 2009, the Minister said that the export shipments are expected to further contribute to the momentum in the last quarter of the fiscal. The Budget allocation for the micro, small and medium enterprises has also been raised from Rs.1794 crore to Rs.2400 crore for 2010-11. This sector contributes 40 per cent of the country’s exports and the additional allocation would further boost the export growth.

The government has now proposed to extend the interest subvention of 2 per cent for one more year for exports covering handicrafts, carpets, handlooms and small and medium enterprises (SMEs). Earlier, the government had provided interest subvention of 2 percent in pre-shipment export credit up to March 31, 2010 in certain sectors.

A number of steps have been taken to simplify the Foreign Direct Investment (FDI) regime. The government also intends to make the FDI policy user-friendly by consolidating all prior regulations and guidelines into one comprehensive document, which would enhance clarity and predictability of our FDI policy to foreign investors. India received FDI equity inflows of US $ 20.9 billion during April-December 2009.

FDI IN DIFFERENT SECTORS

The Government has put in place a liberal and investor friendly policy on Foreign Direct Investment (FDI) under which FDI upto 100% is permitted on the automatic route in most sectors/activities. The policy on FDI is reviewed on an ongoing basis through an inter-ministerial consultation / process, with a view to rationalize/simplify the policy and to attract FDI in more industries and sectors. The Government’s decisions on FDI policy are notified by way of Press Notes which are available at the website of the Department of Industrial Policy & Promotion: http://siadipp.nic.in/policy/changes.htm.

Foreign Direct Investment (FDI) complements and supplements domestic investment. Domestic companies are benefited by FDI by way of capital, state-of-art technology and best managerial practices so that they have better access to foreign technology and get opportunity of integration into the global market.

This information was given by Shri Jyotiraditya M Scindia, Minister of State for Commerce and Industry, in a written reply in the Rajya Sabha.

INCENTIVE PACKAGE TO BOOST EXPORTS

The Union Government has announced export incentives on 12.1.2010 for over 2000 items (at 8 digit ITC HS Code level) under Focus Product Scheme (FPS), Market Linked Focus Product Scheme (MLFPS) and Vishesh Krishi and Gram Udyog Yojna (VKGUY) under the Foreign Trade Policy (FTP) 2009-14. Further, Japan and China have been included in the MLFPS. Some of the items / sectors incentivised under the Schemes is Annexed.

The incentives announced by the government in FTP have contributed significantly to arrest the decline in exports in the wake of global slowdown. The recent incentives are aimed to support exports of the products/sectors including those that are still facing decline or slowdown in exports.