Convertibility not a hurdle for a free port
30 September 1997 23:34 IST India has decided to go ahead with a proposal of a free port even if rupee is made fully convertible. The pattern of a free port however would be decided only after the sub-committee appointed by the union commerce ministry submits its report.
The proposal of India having its own free port has been lying before the centre since march 1992, when the Rounaq Singh committee had submitted its report. Goa was figuring first on the list for an ideal place, due to its location as well as it being a free port during Portuguese regime.
As the government is sitting cool on the proposal for last five years, it was presumed that the free port concept may have been shelved in the light of liberalised economy adopted by Indian state and steps being taken towards full convertibility.
But the misconception was broken by P P Prabhu, union commerce secretary, during his Goa visit last week. "Why should we not have the free port even if rupee is made fully convertible", he asked while replying to a question during a seminar held here.
Even after convertibility, duties will remain while all kind of duties would be waived in the free port. No hindrances including the customs and excise duties as well as port levies would exist in the free port economy, Prabhu clarified.
The decision however is delayed, according to the union commerce secretary, pending the sub-committee report, which is expected shortly. As the port authority would be ruling over the free port, the committee is deeply studying administrative, legal and financial implications and thereby preparing concrete proposal to tackle the situation.
Though the state government here has agreed in principle to make the tiny state a free port despite stiff opposition from local freedom fighters, environmental groups as well as the church, Prabhu is still not committing whether Goa would be ultimately selected.
The union ministry however has amply clarified that it won't be a port like Singapore but only activities like warehousing and storage, minor processing, simple assembly and labelling, packing and repackaging etc, solely for the export purpose, would be permitted.
The centre however is not committing on the pattern to be adopted as well as its location. "We will have a public debate on the issue before taking a final decision", states Prabhu.
