The Hindu Business Line : `Delay in pvt sector entry into rail transport hurting exporters hard'

IF exporters are sore over the appreciating rupee and high cost of dollar credit, the continued delay in putting in place measures for private sector involvement in the movement of containers by rail for export and import is further exasperating them .

Government sources told Business Line that the objective behind introducing the private sector in the movement of containers by rail for export and import was to reduce the cost of transaction by increasing efficiency, cut cost of transportation by bringing in competition, and attract investment in infrastructure.

Currently, the movement of containers is in the hands of Container Corporation of India (CONCOR). Though the policy to invite private sector participation in the sector by the Railways is in existence since 1994, it is yet to be implemented as the Railways does not like its monopoly on this to be dented.

The expected date of completion of the scheme as per the latest assessment of the high-powered committee on reforms headed by the Economic Advisor to the Prime Minister, Dr S. Narayan, was October 31 last, but the deadline has passed without the scheme being put in place.

The sources said formulating appropriate policy and fostering an enabling environment to increase India's share in global exports from the extant level of 0.6 per cent to 1 per cent entailed a menu of schemes to be expeditiously implemented by the Department of Commerce.

Thus, the approval of Central Act on Special Economic Zones (SEZs) promised in the 2003-04 Union Budget remained a non-starter even after the passage of the Budget in May 2003. So far four State Governments — Uttar Pradesh, Madhya Pradesh, Rajasthan and Karnataka — have passed State SEZ Acts despite the promise of Central Legislation for SEZs. The sources said the turf war between the Revenue and Commerce Departments on the tax benefits to be conferred on units located in SEZs has come in the way of going ahead with the Central legislation.

In order to improve India's trade with neighbouring countries as well as to reduce transaction cost of exports, external infrastructure in terms of road, rail and connectivity as well as availability of power and water supply are essential for SEZs as well as Land Custom Stations. The infrastructure so funded would vastly improve the competitiveness of Indian goods and services in the world market, leading to creation of more employment and funnelling investment into India.

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