RECOMMENDATIONS/OBSERVATIONS- AT A GLANCE

BUDGET PROPOSALS
1. The Committee notes with concern the contraction in budgetary allocation
from an amount of Rs. 6219.32 crore in BE 2020-21 to Rs. 4600 crore at the RE
stage thereby witnessing a significant reduction of around Rs. 1620 crore during
the course of the financial year of 2020-21. Also, the amount of Rs. 4986.01 crore
allocated for BE 2021-22 is abysmally low. The Committee understands that the
decline in allocation is due to the financial constraints measures adopted by the
Ministry of Finance in the wake of disruptive economic activities induced by Covid-
19 pandemic. However, the measly allocation made in BE 2021-22 may pose a
hindrance on rebounding and revival of trade related activities that are poised to
recover and grow in the year 2021. Any inadequacy in the funds may prove to be
an obstacle in the effective implementation of the schemes/ programmes and in
extending incentives and subsidies to the beneficiaries or traders. The Committee,
therefore, recommends that the budgetary allocation should be augmented at the
RE stage to ensure the optimal functioning of the Department, thereby enabling the
trade and exports to regain their strength which had traversed through the rough
edges of the contagion marred year of 2020. (Para 2.3)
2. The Committee recommends the Department to judiciously utilize every
single penny that has been allocated for the financial year 2020-21. (Para 2.4)
3. The Committee observes the considerable shortfall in the budgetary
allocation of Rs. 3526.65 crore for the year 2021-22 under major heads and
schemes vis-à-vis the proposed demand of Rs. 5905.51 crore made by the
Department. It feels that a whopping deficit of around Rs. 2379 crore would have a
severe repercussion on meeting the desired commitments, targets and outcomes of
such major schemes and programmes. The Committee is of the opinion that the
anticipated recovery in global economy expected in the year 2021 leading to
resurgence in trade activities of India calls for allocation of sufficient funds for
optimal execution of major policies, schemes and programmes thereby stimulating
trade and exports. It, therefore, recommends the Department to engage with
Ministry of Finance for seeking an increase of at least an amount of Rs. 1000 crore
in the budgetary allocation of the Department at the RE stage to ensure sufficient
funds required for viable functioning of the Department. (Para 2.6)

2
TRADE PERFORMANCE IN 2019-20 AMIDST COVID-19 PANDEMIC
Exports
4. The Committee is perturbed to note the precipitous decline in both exports
and imports in the year 2020 which is to the tune of around USD 50 billion and
around USD 150 billion respectively. It is of the opinion that the distressing
scenario in the trade sector on account of severe slump in global demand due to
Covid-19 pandemic has taken a heavy toll on the growth of already subdued
exports of India experiencing a tepid momentum since 2012-13. The sluggish
growth in exports before the occurrence of Covid-19 pandemic has further
witnessed a downturn in the event of measures taken globally to combat the
pandemic. Also, the fall in trade deficit is reflective of the substantial decline in
imports which must also have adversely impacted the imports of crucial raw
materials and capital intensive goods required in the production of high value
added export commodities. The Committee recommends the Department that any
further deterioration in exports and crucial imports may be checked by taking
requisite measures for preventing further disruptions in supply chains in the trade.
It further recommends that a spur in the growth of both exports and imports is
required by addressing the supply side constraints and easing the trade
procedures. (Para 3.8)
5. The Committee opines that a comprehensive study may be conducted in
order to identify the major issues/challenges impacting the trade activities in India
in the times of Covid-19 pandemic. The study would help in identifying the
structural infirmities existing in trade and exports that aggravated the
deterioration of overall commerce of the country in times of crisis. It would also
serve as an important source of reference to comprehend the impact of catastrophe
like situation on trade and commerce and the mechanisms needed to combat the
same. (Para 3.9)
6. The Committee expresses its concern on the tremendous decline in exports of
the major merchandise sectors which contribute immensely to the revenue
generation of the country. The negative growth in exports of such sectors which
form a larger part of MSME exports besides being labour intensive, indicates an
alarming situation for India’s trade scenario. It feels that green shoots in global
demands and world trade would be visible in ensuing times with the easing of
restrictions and the rolling out of the COVID vaccines. The Committee, therefore,
recommends that the Department should leverage the global trade momentum by
devising specific export strategy for the sectors that are exhibiting a negative
growth with a focus on their production, marketing and exports. A sector specific

3
strategy would increase outbound shipments of such commodities from India and
would assist in arresting the negative trend in overall exports. (Para 3.12)
7. The Committee notes the maximum decline being registered is in the exports
of petroleum products to the tune of around USD 14,505 million in 2020-21 from
the previous year. The Committee recommends that apart from taking into
consideration the constraints posed by the coronavirus pandemic, the Department
must determine the issues plaguing the exports of petroleum products along with
remedial measures to boost its exports. It also recommends the Government to give
emphasis on upgrading the capacities of refineries that produce petroleum
products in India for increasing production along with exploring newer markets
for exports. (Para 3.13)

INDIA'S EXPORTS SHARE IN THE WORLD

8. The Committee notes that the present share of India's exports of 2.15 per
cent in the world's total exports falls short of the target of achieving 3.5 per cent
share of world exports as envisaged in the Foreign Trade Policy (2015-20). It
further discerns that India's minimal share of 1.67 per cent in the merchandise
exports of the world depicts the low competitiveness of the exportable commodities
as well as less access to the global markets. The Committee opines that a rejig in
global supplies and trade strategies during pandemic should be leveraged by India
to increase its exports share by diversifying its exports to countries intending to
shift from their traditional market base. The Department should work in
coordination with export promotion councils and trade commissioners deployed in
various countries to identify prospects of newer trade synergies favourable for
Indian trade. It also recommends the Department to undertake efforts aimed at
increasing the quality and cost effectiveness of products to enhance India's export
competitiveness in the world. (Para 4.3)
9. The Committee observes the acute decline suffered by India's exports from
the months of April to August, 2020 as compared to other Asian and developing
countries. Most of the Asian economies including Vietnam have scored well in
exports during the months of April and May vis-à-vis India despite subdued
demands and disruptions of supply chains and shipping routes. It, therefore, feels
that the contraction in India's exports has also been intensified by other factors
which need to be earnestly introspected by the Department. The Committee also
recommends that the inherent challenges persisting in India's trade ecosystem and
affecting the export growth should be assessed and addressed. (Para 4.5)

4
UNCTAD REPORT ON GLOBAL TRADE

10. The Committee is perplexed to note that as per the UNCTAD report, a two
per cent decline in the overall supply of intermediate goods from China has
affected India’s production capacity and exports to an extent of USD 348 million in
value terms on account of its dependence on Chinese supplies. As a result, the
production capacities and exports of India’s crucial manufacturing sectors such as
chemicals, textiles and apparels, and automotive sector have suffered a setback due
to disruptions in supplies of intermediate goods from China. The Committee is of
the view that the adverse impact on India’s production and exports due to its over
dependence on intermediate goods from China manifests a structural problem that
needs to be overcome by taking effective steps. It therefore recommends that the
Government should take measures to increase the scale of manufacturing of such
goods at an affordable rate. Also, the dependency on supplies of such goods should
be reduced in a gradual manner since any sudden change in their availability may
further deteriorate our production and exports. (Para 5.3)

SHIPPING FREIGHT CHARGES

11. The Committee takes cognizance of the hardships being faced by the Indian
exporters due to the exorbitant rise in shipping freight rates being paid by them in
recent months thereby having a negative bearing on export competitiveness of
India. The arbitrary hike in freight rates with the exporters paying a higher
amount for outbound shipments would not augur well for the exports which are
already reeling under the collateral damage of the pandemic. The Committee
recommends that any sudden and abrupt changes in freight rates may be countered
by interventions by the Government to impose regulations against cartelization of
rates and increasing the container production and shipping services. To tide over
the paucity of the containers which was aggravated during Covid 19 pandemic,
resulting in increased freight charges by shipping companies, the committee
recommends that the prospect of manufacturing containers in the country may be
explored with the infrastructure available in existing shipyards by providing them
facilities/incentives. It further recommends that to regulate the shipping freight
rates in a fair and transparent manner, a National Shipping Regulatory Body may
be constituted on the lines of Insurance Regulatory and Development Authority
(IRDA) and TRAI (Telecom Regulatory Authority of India). (Para 6.4)
GLOBAL VALUE CHAINS (GVCs)
12. The Committee notes the tremendous opportunities and enhanced scope for
India to increase its trade share and export competitiveness by participating in
Global Value Chains (GVCs). By adopting an integrated value chain approach in
5
trade, India should establish its global linkages by encouraging its participation as
well as initiating its own GVCs. For smooth functioning of trade under GVCs,
various interventions may be taken by the Government to prevent incidences of
inverted duty structure by lowering import duties on raw materials and
intermediate goods, upgrading warehousing facilities, certification of laboratories
and strengthening logistics along with improving customs procedures. Revamping
of linkages between industry and academia by focusing on human skill
development along with upgradation of technological development may be made. It
further recommends that a task force may be set up for devising a policy which
would strategize India’s participation in GVCs by identifying both avenues and
contraints in attracting investments in this regard. (Para 7.4)

REMISSION OF DUTIES AND TAXES ON EXPORTED PRODUCTS (RoDTEP)

SCHEME
13. The Committee is of the belief that any delay in declaring the rates under
RoDTEP Scheme would have adverse implications on exports by creating
uncertainties for exporters to schedule future contracts and fix the final costs of
their export orders. It opines that in view of withdrawal of MEIS Scheme, the
exporters, especially in the MSME sector, are completely bereft of incentives in the
form of duty credit scrips used for paying duties and taxes including customs duties
and to maintain their competitiveness in global markets. In times of pandemic-hit
phase when the trade is in dire straits, a mechanism should exist for the exporters
to avail incentives which to an extent would help mitigate the working capital crisis
and give certainty to firm up their future contracts. The Committee, therefore,
recommends that the same rates as offered under MEIS Scheme for the sectors
should be continued till the Government declares the rates under
RoDTEP Scheme. (Para 8.5)

14. The Committee feels that without a scheme to refund embedded taxes, cesses
and duties, the exporters are at a cost disadvantage vis-à-vis global competitors
until the rates for refunds under the RoDTEP Scheme are finalised. It, therefore,
recommends that the determination of ceiling rates for refunds under the RoDTEP
Scheme by the G.K. Pillai Committee should be expedited to avoid any delay.
Further, the Scheme should not be subjected to inadequate budgetary allocation
since appropriate reimbursement to the exporters would help in reducing high
costs that affect their competitiveness. (Para 8.6)

6
MSME EXPORTS
15. The Committee appreciates the initiative of Production Linked Incentive
(PLI) Scheme taken by the Government to encourage domestic manufacturing of
industries especially in the MSME sector with an aim to make them a net exporter.
Based on the principle of self-reliant or 'Atmanirbhar' India, the Scheme would
also be a significant step in reducing India's import dependence. The Committee,
however, recommends that the Government should ensure that the identified
sectors under PLI do not become dependent on subsidies in the long run. Also, the
Scheme focuses only on increasing the production with less focus on value addition.
In this regard, the Committee recommends that along with expansion of production
level, efforts should also be made to raise the domestic value addition capacity of
the industries under the Scheme. (Para 9.6)
DEVELOPING DISTRICTS AS EXPORT HUB

16. The Committee is happy to note that the initiative of the Government to
develop each district as an export hub would provide impetus to industries
concentrated in each district from production to the exporting stage. By leveraging
the potential of local manufacturing units in each district, the initiative would
encourage small manufacturers and traders to evolve into exporters. The
Committee, therefore, recommends that the preparation and implementation of the
District Export Action Plans (DEAPs) specific to each district should be expedited
to identify its current export profile and potential. The elected representatives are
the vital linkage between the Government and the people of the District. To
facilitate effective implementation of Scheme, the Committee recommends that the
MPs of the area/district should be made part of the District Export Promotion
Committees (DEPCs). Also, a geo-map should be prepared wherein the location-
based data and other facts related to industries and exports of the districts being
identified as export hubs are mapped and disseminated to the public for generating
awareness and providing information of such districts. (Para 10.2)

INTEREST EQUALISATION SCHEME

17. The Committee feels that the Interest Equalisation Scheme would play a
pivotal role in the difficult times of the pandemic to facilitate easy and affordable
bank credit to the MSME exporters who are facing a severe crisis of financial
resources to meet their export obligations. Hence, the allocation of Rs. 1900 crore
made for BE 2021-22 against the proposed fund of Rs. 3500 crore is too meager to
settle the claims arising in the year. The Committee recommends that the allocation
under Interest Equalisation Scheme should be enhanced to an adequate level at the

7
RE stage so that no MSME exporter is left in the lurch because of pendency in
settling of claims on account of lower allocation. (Para 11.5)
18. The Committee feels that with the business losses suffered due to the Covid-
19 pandemic, the exporters are in dire need of credit to kick-start their business
operations again with renewed vigour. In such circumstances, the Interest
Equalisation Scheme would be a respite for the exporters to avail bank credit at a
globally competitive rate. Also, the buyers in international markets seek quality,
affordable cost and credibility from all exporters including MSMEs. It, therefore,
recommends that the Scheme should be made available to all exporters and for
every exportable products of the country. The Committee also recommends that
the Scheme should be further extended for a year since the abrupt discontinuation
of the Scheme would adversely impact the MSME exporters in these difficult
times. (Para 11.8)
DIRECTORATE GENERAL OF FOREIGN TRADE (DGFT)
19. The Committee is of the view that the implementation of DGFT-IT revamp
project is crucial to digitize and establish a paperless system for extending trade
related services to the exporters. The Committee, therefore, recommends that any
requirement of additional funds should be sought by the Department from the
Ministry of Finance at the RE stage. (Para 12.7)

DGFT-IT REVAMP PROJECT

20. The Committee takes cognizance of the delay in the deployment of all the
phases of DGFT-IT Revamp project which is deferring the objective of digitization
of trade procedures. The project is significant for the upgradation, digitization and
automation of trade procedures with minimal level of human interface. This would
be instrumental in expediting trade, reducing costs of clearance along with
ensuring transparency and seamless integration of different stakeholders at a single
platform. However, its delay in implementation would be a hurdle in overcoming
the complex procedures and paperwork that continues to hamper the smooth
functioning of trade. The Committee hopes that the integration of all the phases of
IT revamping would not be episodic. The Committee also recommends that the
'Grievance Redressal System' should be made effective by focusing on 'Minimum
Government, Maximum Governance' by effectively utilizing digitalization process.
In view of this, the Committee recommends that the Phases II and III should be
implemented at the earliest without any undue delay. (Para 13.4)

8
TRADE INFRASTRUCTURE FOR EXPORT SCHEME (TIES)
21. The Committee expresses its concern on insufficient budgetary allocation
made to the Trade Infrastructure for Export Scheme (TIES) which is of utmost
importance in improving the last mile connectivity for the movement of goods by
enhancing and strengthening the trade infrastructure. An inadequate allocation of
Rs. 75 crore for the year 2021-22 against a committed liability of more than Rs 120
crore and a demand to the tune of Rs. 200 crore, seems to be inappropriate which
would affect the completion of infrastructure projects under the Scheme. The
impact of inefficient trade infrastructure on India's trade competitiveness would be
felt more on account of withdrawal of MEIS Scheme that aimed to offset
infrastructural inefficiencies by incentivizing exporters. The Committee, therefore,
recommends that the Department should engage with Ministry of Finance to seek
augmentation in allocation at the supplementary grants stage by emphasizing the
prospect of creating modern infrastructure, cutting down transaction and logistics
costs and thereby boosting exports through the scheme. (Para 14.7)
22. The Committee observes that the Trade Infrastructure for Export Scheme
(TIES) is capable of providing a promising roadmap to tap the growth and
opportunities in exports and will have multiplier effect on job creation and
economic activities. However, the Committee notes that the Scheme is not receiving
required support for its effective functioning as there is half-hearted attempt and
reluctance in its participation by the States/UTs. Also, the mandatory condition on
States/UTs to identify export linkages in proposed projects for availing financial
support from the Government would further limit the optimal execution of the
Scheme. The Committee recommends that the issues arising out of this condition
may be analysed and addressed by consultations with stakeholders followed by
proper planning and corrective measures should be taken in this regard to ensure
cooperative participation of States/ UTs in the Scheme. (Para 14.11)
FOREIGN TRADE POLICY (FTP)
23. The Committee recommends the Department to come out with a robust Foreign
Trade Policy (2021-26) which would take into consideration the existing pandemic
induced constraints on trade as well as the unforeseen challenges arising out of global
uncertainties. The policy should also pave way for reflation of demand in the post
Covid recovery and setting future directions which will determine India's role in the
emerging global trade. The proposed policy should also be strategic with an equal
thrust on a self-reliant trade approach as well as on international cooperation to
establish a fair trade global order. (Para 15.5)

9
India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement
(CECPA)
24. The Committee appreciates that the Government has inked the India-
Mauritius Comprehensive Economic Cooperation and Partnership Agreement
(CECPA) in Port Louis in February, 2021. It, however, feels that in a global
competitive world wherein the international trade equations play a significant role,
India may sign considerably more Free Trade Agreements (FTA) with like-minded,
democratic and friendly countries like USA and Australia. The Committee,
therefore, recommends that the Department should explore the opportunities of
FTAs with such nations by having wider consultations with relevant stakeholders
and, accordingly, persuade the Government to ink more trade pacts and
agreements with them that are mutually beneficial. (Para 15.7)
E-COMMERCE EXPORTS
25. The Committee notes with concern the unavailability of data on the quantum
of e-commerce exports from the country because of the absence of any mechanism
to compute the same. In view of overwhelming support to the e-commerce exports
in the world, devising of a mechanism to capture the data on e-commerce exports
from India would be significant in formulating appropriate policies and schemes
for creating an enabling environment thereby encouraging the exporters to export
through e-commerce medium. The Committee recommends that a mechanism
should be devised at the earliest to capture e-commerce exports from the
country. (Para 16.2)

SCHEME OF DEEMED EXPORTS

26. The Committee notes that the Scheme of Deemed Exports introduced in
Foreign Trade Policy (2015-20) is a crucial scheme to empower the domestic
manufacturers of India by extending benefits and exemptions on taxes and duties
levied on essential inputs. As India is moving towards a new paradigm of
'Atmanirbhar Bharat' or self-reliance, the Scheme would be indispensable in
boosting the competitiveness of domestic manufacturers in both production and
supply of quality goods of international standards. The Committee recommends the
Department that the reasons for the decrease in claims under the Scheme should be
scrutinized and accordingly remedial measures should be taken to improvise the
Scheme for its better functioning. It further recommends the Department to seek
additional funds from the Ministry of Finance as per the increase in claims to avoid
any pendency and retain the competitive advantage of Indian companies
globally. (Para 17.5)

10
EXPORT CREDIT GUARANTEE CORPORATION OF INDIA (ECGC)
27. The Committee notes that the capital infusion expands the underwriting
coverage of ECGC and bolster its net worth in extending credit risk insurance
facilities to the exporters for enabling them to export in emerging and challenging
markets without any risk factor. However, it should be corroborated with proactive
measures by the ECGC to expand the maximum coverage of exporters under
export credit insurance. The Committee, therefore, recommends that an effective
scrutiny analysis should be made by the Department on the proposed capital
infusion of Rs. 9940 crore before its approval so that the allocated amount is
utilised judiciously. (Para 18.8)
28. The Committee is of the opinion that the pendency in claims in the sectors
that are already in a state of flux due to financial constraints and liquidity crisis in
times of pandemic induced economic crisis need to be addressed on a priority basis.
It also recommends that measures should be taken to ease the procedural
difficulties and conditions for compliances in refunding claims along with
efforts to generate awareness amongst exporters about the criteria in filing of
claims. (Para 18.11)
Stimulus Package for Export Credit

29. The Committee strongly feels that the launching of NIRVIK Yojana, a
crucial Scheme of national importance, should have been followed by a proper
prior assessment to ensure its timely implementation and prevent its withdrawal. It
takes note that the reasons for the withdrawal of the Scheme had been the support
of the Union Government to both the components of premium and insurance
coverage wherein the reformatted scheme would restrict the assistance of the
Government to premium component only. It, therefore, desires that a
comprehensive note on the reasons for withdrawal may be furnished by the
Department to the Committee. The Committee also recommends that the
implementation of new scheme should be expedited with an adequate budget on
account of its relevance in extending additional credit relief to the banks which
would expand the insurance coverage of exporters. (Para 18.17)

AGRICULTURAL AND PROCESSED FOOD PRODUCTS EXPORT

DEVELOPMENT AUTHORITY (APEDA)

30. The Committee perceives that global trade in post Covid scenario will witness
a paradigm shift for edible items under exports and India with its vast natural
resources has the potential to emerge as the leading exporting country in export of
11
honey, jaggery and other herbal products which are in high demand all over the
world. The Committee therefore notes with concern the insufficient funds allocated
to the APEDA for RE 2020-21 and BE 2021-22 constraining it to regulate its export
development activities as per the funds available at its disposal. The inadequate
allocation would have a negative bearing on the optimal functioning of essential
scheme components of infrastructure, quality and market development crucial for
agriculture exports. The Committee recommends the Department to impress upon
the Ministry of Finance to allocate the necessary funds to the APEDA at the
supplementary grants stage if required for the execution of its schemes and
programmes. The Committee also recommends that APEDA should go for
diversification of products with quality mapping to harness the export potential in
post Covid scenario. (Para 19.7)
31. The Committee recommends that the Department, in coordination with
Ministry of Agriculture and Farmers' Welfare, should take effective steps to boost
export-oriented agricultural production in India which should include fostering
scientific temper in agricultural practices, Research and Development activities
augmenting the quality production and conducting trainings of agricultural
producers to facilitate adoption of good agricultural practices in farming as per the
requirements of the importing countries and value-addition by encouraging
establishment of processing centres. Further, unfavourable non-tariff barriers
should be identified and pursued by the Government with countries on a regular
basis. Periodic guidelines may be issued by the Department on compliance
measures to be undertaken by the exporters to prevent any rejection of export
consignments. (Para 19.10)

AGRICULTURE EXPORT POLICY (AEP)

32. The Committee notes that a lot of scope still exists in Agricultural Export
Policy (AEP) to increase the participation and engagement of States as only 16
States have furnished their State Specific Action Plans. It recommends that the
Department should encourage the States for their greater involvement in
implementing the Policy to increase the exports from their respective regions and
identified clusters. The Committee also recommends effective execution of the
Policy in the country ensuring increase in bargaining power of farmers in
marketing their produce directly to the exporters of the country. (Para 20.5)

MARINE PRODUCTS EXPORT DEVELOPMENT AUTHORITY (MPEDA)

33. The Committee notes with distress that the reduction in allocation in
successive three years has led to backlogs and liabilities on MPEDA that is

12
adversely affecting the functioning of schemes crucial for marine exports. The
decline of more than Rs. 300 crore in funds from the projected allocation during
three financial years from 2019-20 to 2021-22 is massive and will be a major hurdle
in settling claims and initiating any new Schemes for marine exports. The
Committee, therefore, recommends that an adequate increase should be made to
the MPEDA at the RE stage to ensure its proper functioning. It desires that the
Department should take active steps in this regard. (Para 21.8)
34. The Committee expresses its concern on the sharp decline of 25.87 per cent in
marine exports from India from 2019-20 to 2020-21 with both the major exporting
destinations of US and China registering decline. The steep fall in marine exports to
the tune of 38.34 per cent to the major market of China is worrisome and the
decline would considerably impact the total marine exports from India. The
Committee recommends MPEDA that along with proactive measures being already
taken to address the decline, it should focus upon market diversification and
exploration of new and untapped destinations such as ASEAN countries, African
and Latin American nations to export marine products from India. It also
recommends that the production capacity, quality enhancement and value addition
of marine products in India should also be emphasized upon to boost their
exports. (Para 21.14)
35. The Committee appreciates the launching of new scheme of Pradhan Mantri
Matsya Sampada Yojana (PMMSY) by the Department of Fisheries for the
development of infrastructure to boost fishery production. It recommends MPEDA
to take coordinative efforts with Department of Fisheries for assessing the existing
gap in export related infrastructure and analyzing measures to strengthen the
same. (Para 21.15)
36. The Committee recommends that the matter of shortage of shipping
containers should be dealt urgently by MPEDA by the Department of Commerce to
restore the outbound shipments of marine exports. It recommends that the
Department of Commerce may take the issue with Ministry of Shipping for
taking appropriate measures to increase not only the shipping line services but
also engage with Indian Embassy in China to address the issue at the
earliest. (Para 21.17)
TEA SECTOR
Tea Board
37. The Committee notes the decline in tea exports in 2019-20 and 2020-21 on
account of reduction in tea production and logistical constraints due to Covid-19

13
pandemic. It is of the opinion that the logistical issues/ inefficiencies are likely to
resolve or smoothen out in the ensuing financial year of 2021-22 giving a push to
exports. The Committee, therefore, recommends the Tea Board to formulate an
effective export strategy to capitalize the favourable environment of trade for
augmenting tea exports from India. It also urges the Board to address the issues
that are limiting the tea production in India by emphasizing on organic farming,
setting up export based clusters and other essential measures to boost tea
export. (Para 22.5)
Subsidy to Tea Growers
38. The Committee is displeased at the undue delay in subsidies being released to
the tea growers in India. It notes that as against the proposal of Rs. 1425 crore, the
amount allocated to the Tea Board was Rs. 635.55 crore in the 12th Five Year Plan
leading to an enormous shortfall in funds to the tune of around Rs. 790 crore. The
pending subsidies to the tea growers especially to the small tea farmers facing the
burden of additional production costs and tiding over the stressful phase of
financial crisis in times of Covid-19 pandemic would affect the overall sector
adversely. The Committee recommends that the Department should earnestly
engage with Ministry of Finance to increase the allocation of funds mainly for
settling the subsidy claims received from the tea growers. It also strongly
recommends the Department to expedite the process of disbursal of pending
subsidies to the tea growers. (Para 22.12)
Tea Parks
39. The Committee recommends the early completion of the Tea Park being
established at Kolkata and finalisation of the Detailed Project Report at the
earliest. The Tea Board should actively pursue the funding patterns for the Park
which would expedite the construction of requisite infrastructure of the Park. The
Committee further recommends that the Department should explore viable
locations to establish Tea Parks in the prominent tea producing regions in States
such as Assam, Tamil Nadu and Kerala. (Para 22.16)
COFFEE SECTOR

Coffee Board
40. The Committee recommends the Department to seek additional funds at the
supplementary grants stage as per the requirements of Coffee Board during the
course of the financial year. (Para 23.8)
41. The Committee notes the reduction in exports of coffee to major European
markets of Italy, Germany and Russia between 2017-18 to 2020-21 (April, 2020 to

14
January, 2021) which has worsened during Covid-19 pandemic on account of
subdued demands and disruptive supply chains. It appreciates the efforts
being made by the Coffee Board to address the decline in exports by taking a slew
of measures to ease supply chains and encourage exports. The Committee, however,
feels that more efforts need to be made to boost coffee exports to the European
Nations in the wake of resurgence in demands in the years ahead. Also, the
Board should explore newer avenues as destination markets for coffee
exports. (Para 23.14)

RUBBER SECTOR
Rubber Board
42. The Committee recommends the Department that the additional allocation
may be provided to the Board at the supplementary grants stage as per the
requirements. (Para 24.8)
Export/ Import of Natural Rubber

43. The Committee expresses its discontent on the trade deficit in rubber exports
from India wherein the imports have been considerably higher than exports.
However, it is contented to note that the export of concentrated latex grade of
Natural Rubber during Covid-19 pandemic serving as a raw material in
manufacturing of medical gloves has increased the demand of Natural Rubber
exports from India. It recommends the Rubber Board that necessary steps should
be taken to promote exports of Natural Rubber and effective strategy should be
devised for the same. (Para 24.11)
Inclusion of Natural Rubber as Agricultural Product

44. The Committee notes that rubber cultivation predominantly is practiced by

small rubber growers in the country. It observes that these small rubber growers is
not getting proper financial and technical assistance to meet the high production
costs and survive the long gestation period of rubber trees, which is a crisis in
rubber sector that needs to be addressed on priority. The Committee recommends
the Board to formulate a scheme for extending subsidies to small rubber growers in
order to offset the costs involved in replantation activities and long gestation period
of rubber trees. The Department should also pursue the Government to fix a
Minimum Support Price (MSP) for Natural Rubber in the country to ensure a fair
remunerative price for small rubber growers. (Para 24.14)

15
SPICES SECTOR

45. The Committee recommends that the budgetary allocation made in BE 2021-
22 should be augmented at the RE stage as per the requirements of the spices
board. (Para 25.8)
Turmeric Exports
46. The Committee appreciates the measures being undertaken by the Spices
Board to promote the production and exports of Turmeric from the State of
Telengana which holds the largest share in turmeric production in the country. It,
however, notes that the shortfall in funds are incapacitating the endeavours of the
Spices Board that are being taken to implement the export oriented project of the
Turmeric Task Force Committee (TTFC). It recommends the Department to be
mindful of the hindrances being faced during execution of Schemes due
to inadequate budgetary provisions and urges the Department to allocate
sufficient funds for project of TTFC to ensure its better implementation in the
State. (Para 25.14)
47. The Committee recommends the Spices Board to expedite the process of
revival of Spices Park at Padgal village of Nizamabad that would enhance the
production and exports of turmeric to meet rising demands at both domestic and
global levels. (Para 25.15)
48. The Committee came to know that in some parts of Uttarakhand (Kumaon
region) spices like cinnamon, bay leaves, turmeric and coriander are grown
organically. The Committee, therefore, recommends that these areas may be
explored and a Spice Park may be set up in the area to tap the potential of spices
produced. (Para 25.16)
SPICES PARKS

49. The Committee notes that the Spices Park at Chhindwara (Madhya
Pradesh), Sivaganga (Tamil Nadu) and Rae Bareli (Uttar Pradesh) is still not
operational at a full-fledged level. It emphasises upon the Spices Board for the
early completion of procedures causing delay in functioning of these Spices Parks.
It also stresses upon the Board to have a periodic inspections of the established
Parks ensuring their efficient functioning. (Para 26.4)

PRICE STABILIZATION FUND AND REVENUE INSURANCE SCHEME FOR

PLANTATION CROPS (RISPC)
50. The Committee takes cognizance of the evaluation made by the Institute of

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Plantation Management, Bengaluru which has found the Revenue Insurance
Scheme for Plantation Crop (RIPSC) to be impractical as it insures the planters if
loss is incurred simultaneously on both yield and price. It, however, notes that no
pre-evaluation of the RISPC Scheme was undertaken before its pilot launch to
avoid unnecessary time lapse in implementing a scheme on crop insurance and
price stabilization. The Committee recommends that implementation of any such
scheme in future should be pre-assessed before its launch to prevent glitches in its
execution. (Para 27.5)
51. The Committee notes that the growers of plantation crops are vulnerable to
the vagaries of both weather induced risks and price fluctuations. It recommends
that to ensure the welfare of plantation farmers of tea, coffee, rubber, spices and
tobacco, the Department must devise a scheme for crop insurance that guarantees
them against loss being incurred due to weather and environment related risks as
well as a scheme that provides them price stability for their products against price
fluctuations. Also, adequate budgetary allocations should be made for both
Schemes for their viable implementation. (Para 27.6)
52. The Committee observes that the unutilized funds under the Price
Stabilisation Fund corpus amounting to Rs. 1379.85 crore vested in the Public
Account of India has been finally transferred to the Consolidated Fund of India in
February, 2021. It views that non-utilisation of PSF corpus since the closure of the
Scheme in 2013 is the result of absence of any alternative scheme during the period
and hence such lackadaisical approach may be avoided by the Department in
future. (Para 27.8)
NORTH EASTERN AREAS

53. The Committee recommends that the budget allocated for in the financial
year of 2021-22 to various sectors of tea, coffee, rubber, spices and agricultural
products for implementation of schemes and programmes of various Commodity
Boards aimed at boosting development and promoting exports in North East
Region should be utilized efficiently. (Para 28.3)
54. The Committee notes that no allocation has been made to the MPEDA for the
component of North Eastern Region in 2021-22 and in previous financial years. It
recommends that the Department should examine the reasons for no requirements
of funds for marine development and exports in the North Eastern Region. It
recommends MPEDA to explore the potential avenues of NER in marine industry
and exports for earmarking specific funds so that the marine sector of the region is
developed and challenges related to the same are addressed. (Para 28.5)

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55. The Committee discerns the export potential of the North Eastern Region in
all the sectors of tea, coffee, rubber, spices, marine and agricultural products which
needs to be further explored and tapped by the Commodity Boards, MPEDA and
APEDA. It recommends the Department that the primary issue of lack of
exportable surplus in every sector should be addressed by encouraging value-added
processing, quality and organic certified production from the region attracting
demands from global markets. The Committee also recommends the Department to
undertake steps for establishing requisite infrastructure, primary processing
centres and constructing export oriented zones and parks in the region to stimulate
exports. (Para 28.14)
56. The Committee is of the view that Natural Rubber is one of the important
cash crop of the State of Tripura wherein the tribal population of the State
undertakes rubber plantation as a source of their livelihood. In this regard, it
recommends Rubber Board to explore the potentiality of rubber growing regions of
Tripura to promote production and exports of Natural Rubber from the
State. (Para 28.15)
Spices Complex at Sikkim

57. The Committee is disconcerted to note the nonchalance being shown towards
establishment of Spices Complex in Sikkim which still is in a state of incompletion.
It notes with concern the time and cost overruns in the project as well as the loss
incurred by the Spices Board to the extent of 66 per cent of Rs. 2 crore released to
the Spices Producers Companies associated with the development of the Complex.
It also views that the Spices Complex in Sikkim is to be constructed as an approved
project under the Trade Infrastructure for Export Scheme (TIES) which would
require further time in its completion and making it fully functional. The
Committee recommends the Department to fix a timeline in order to expedite the
completion of the Spices Complex in Sikkim. Also, a study note regarding the
details of the construction of the Complex since its commencement may be
furnished to the Committee. (Para 28.19)

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