EPCES demands special package to attract investment
With the countrywide lockdown due to Covid-19 being extended to 3 May, and with the industry facing loss of businesses, the Export Promotion Council for EOUs & SEZs, set up by the ministry of commerce & industry, has written to the prime minister to consider a special package for infrastructure developers for both industrial infrastructure and R&B, either by extending the sunset clause of SEZ or by announcing some financial package so that new investments should come in this sector.
15 Apr 2020 | By PrintWeek Team
Bhuvnesh Seth, vice-chairman, EPCES
In a letter to the prime minister, Bhuvnesh Seth, vice-chairman, EPCES, said that countries like the US, the UK, Germany, Malaysia, and Bangladesh have provided stimulus package to support the industry.
In the letter, Seth said ESI, PF, and banks are co-partners in business from the start of operation, and it’s the moral responsibility of one partner to support the other in testing times.
Seth added that the EPCES sector provides direct employment to more than 25 lakh person with investment of more than Rs 5.50-lakh crore, contributing Rs 7.87-lakh crore to India's export basket which is one-third of total national exports.
He added that the Covid-19 pandemic has severe impact on above 50% loss of export orders, liquidity badly hit of recovery of receivables of lockdown in exporting countries. “They have asked that they will delay the payments and are left with no cash flow. World Trade Organisation has projected 13 to 32% declines in global trade in 2020,” he added.
He added: “We were expecting up to 50% operation of EOUs & SEZs to execute balance live orders maintaining social distance which we feel can be maintained better in factories with less staff. We could execute such orders as per commitment to save loss of client and business to China or Asian countries. At a juncture when Japan has allocated funds to relocate from China, US, Europe and Korea are also thinking of shifting the business from China because of the virus.”
EPCES strongly believe that at present India being preferred country not only large multinational but shifting of medium and small industries in SEZs. “Therefore, we should offer special package to Japanese companies to invest in India,” he said.
Presently we have only one Act and Policy for exports, that is the SEZ Act. But, under this SEZ Act, any new company operating after 30 June 2020 will not get income tax benefits where as other countries like Vietnam, Cambodia, Philippines, Singapore, Malaysia and Sri Lanka are offering customised packages to investors. Unless the government consider a specialised policy or extend the SEZ Act, attracting investments will be a challenge,” the letter stated.
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