ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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GEEDA Needs Probe

GEEDA Needs Probe Nishtar THE worst fears about the scheme for canalisation of export of groundnut extractions are beginning to come true. The Groundnut Extractions Export Development Association (GEEDA), through which all exports arc being canalised, is hardly two months old hut the way it has been going about enforcing discipline on shippers to ensure that exports to the rupee payment area and five currency area are in the ratio of 70:30 has exposed it to severe criticism. If timely action is not taken to cheek GEEDA's activities, it is likely to do incalculable harm and even ruin the cause it seeks to promote. It is not enough to ensure- that exports to rupee payment and free currency areas flow in a certain prescribed proportion. It is far more important that this is achieved without a contraction in the total volume of exports. If the link scheme is to make any sense then exports to free currency areas should form a larger percentage of the expanding volume of trade. But fresh export business after the introduction of the canalisation scheme has dwindled to a trickle and this can by no means be dismissed as a seasonal phenomenon, East European buyers India's major customers have gone on a virtual strike, restricting their additional purchases to the barest minimum. Business with the UK has been of a routine nature and always goes on whether there is any incentive or not. How has GEEDA been going about its job? To begin with, exporters to rupee, payment areas were called upon to pay a deposit of Rs 15 per tonne for obtaining quota slips for effecting shipment and along with it they had to give art undertaking to export the prescribed quantity to the free currency area within three months of the shipment of goods, or purchase immediately quota entitlements from other shippers who had sold or shipped goods to free currency areas. If they failed to honour their commitment they stood to lose their deposit money and also ran the risk of additional penalties and disciplinary action. As if this was not bad enough, regulatory measures were soon further tightened. For obtaining quota slips for exports to rupee payment areas under the revised scheme, exporters are required to execute duly stamped bonds and pay a cash deposit of Rs 15,000 for the first 1,000 tonnes, Rs 30,000 for the second 1,000 tonnes and Rs 45,000 for the third 1,000 tonnes. In other words, export sale of 3,000 tonnes to rupee payment (East European) countries would attract a deposit of Rs 90,000 which could be forfeited in the event of failure to fulfil the corresponding obligation to export or procure equivalent quota entitlement for the free currency area.

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