Shipping industry seeks creation of modernisation fund | india | Hindustan Times
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Shipping industry seeks creation of modernisation fund

india Updated: Mar 14, 2012 01:22 IST
Debobrat Ghose
Debobrat Ghose
Hindustan Times
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Concerned over the diminishing share of shipping in India's overseas cargo carriage, which fell to 8.3% in 2009-10 from 40.7% in 1987-88, the Indian shipping industry has demanded the creation of a shipping modernisation fund on the lines of the textile industry's technology upgradation fund.

Shipping, being capital-intensive, requires huge funds for financing ship acquisitions. Funds are largely mobilised through external commercial borrowings and internal generations. The 'modernisation fund' sought by the industry would support the national fleet, and also provide long-term loans to shipping companies with an interest subvention of 5% per annum on loans up to 10 years for acquisition of vessels.

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"Shipping is a critical infrastructure in a growing economy and is a part of the supply chain, so we're looking for a nurturing policy that could save the industry from impediments in growth," said Anil Devli, CEO, Indian National Ship-owners Association (INSA).

The industry has sought procedural modification in the income tax assessment on Indian crews working on Indian ships vis-à-vis Indian crews on foreign ships. The former face problems in complying with the 182-day criteria for being treated as a non-resident Indian (NRI) for taxation purposes. On the other hand, "due to poor monitoring Indian crews on foreign ships, despite trading on Indian waters, enjoy NRI status and are not subjected to tax deduction," said Devli.

"The government needs to correct this discriminatory treatment or impose tax equally on all," INSA demanded.