The Hindu : Business : ‘Higher DEPB support needed’

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Friday, Oct 19, 2007
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‘Higher DEPB support needed’

Special Correspondent

Cashew industry badly hit by rupee rise

THIRUVANANTHAPURAM: The cashew industry has demanded a higher level of support under the Duty Entitlement Pass Book (DEPB) facility of the Union government to offset the adverse impact of the appreciation of the Indian Rupee against the U.S. dollar.

At a press conference here on Thursday, Chairman of the Cashew Export Promotion Council of India Walter D’Souza said the rupee had appreciated by nearly 11 per cent against the U.S. dollar over the last six months. This had badly affected the cashew industry, which was “working on wafer-thin margins,” he said.

The council and the exporters had brought this problem to the attention of the Union Commerce Ministry. Responding to their representations, the government had enhanced the DEPB support to the cashew industry from one per cent to three per cent through a notification in July this year.

This enhanced support was applicable for the whole financial year, according to the notification. The government, however, revised the support down to 1.5 per cent through another notification on October 9. This was virtually a bolt from the blue for the industry, Mr. D’Souza said. The exporters had factored in the enhanced support while striking supply contracts with their customers outside.

Mr. D’Souza said the three-per-cent DEPB support announced in July itself was inadequate to help the cashew industry tide over the crisis. Most of the other food items such as tea, coffee and marine products received between four and eight per cent DEPB support.

The cashew industry deserved the same level of generosity from the Union government since it was extremely labour intensive and since women constituted 90 per cent of the workforce, he said.

He urged the Union Finance Ministry to evaluate afresh the impact of all Central levies and also the rupee appreciation on the cashew industry and announce an enhancement in DEPB support.

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