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Eliminate embedded taxes to boost exports
Context
The Economic Survey has suggested that the Goods and Services Tax (GST) Council should comprehensively review ‘embedded taxes’ and expeditiously eliminate the embedded export taxes to boost India’s manufacturing exports.
Survey moots thorough review of taxes from products left outside the ambit of GST, and from within
The Economic Survey has suggested that the Goods and Services Tax (GST) Council should comprehensively review ‘embedded taxes’ and expeditiously eliminate the embedded export taxes to boost India’s manufacturing exports.
Need for national policy: National Integrated Logistics Policy
Pointing out that high cost of logistics was impacting competitiveness in domestic and global market, it suggested the formulation of a National Integrated Logistics Policy to bring in greater transparency and enhance efficiency in logistics operations.
- “Improving logistics sector has huge implication on exports and it is estimated that a 10% decrease in indirect logistics cost can increase 5-8% of exports,” the Survey said.
Data on the international exports of states
The document has also thrown up some interesting findings on India’s export sector
This included data on the international exports of states, the first in India’s history, showing that five states — Maharashtra, Gujarat, Karnataka, Tamil Nadu and Telangana — in that order account for 70% of India’s exports
Firm-level analysis on exports
Similarly, for the first time, the Survey did a firm-level analysis on exports and found that export concentration by firms was much lower in India than in the U.S., Germany, Brazil, or Mexico – meaning that India had no ‘exports superstars’ and that its export structure was “egalitarian” in nature.
- “The top 1% of firms accounted for 72, 68, 67, and 55% of exports in Brazil, Germany, Mexico, and USA respectively, but only 38% in the case of India. The top 5% accounted for 91, 86, 91, and 74% in those countries, compared with 59% in India,” the Survey said, adding that the new GST data had made it possible to construct firm-level exports
