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The Hindu : Business / Industry : Centre to announce incentive package for exporters next...

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Business Industry
Published: October 7, 2011 18:54 IST | Updated: October 7, 2011 19:04 IST

Centre to announce incentive package for exporters next week

Special Correspondent

Photo: V. Sudershan TAKING STOCK: Union Minister for Commerce, Industry & Textiles Anand Sharma chairing a consultative meeting with FIEO and EPCs to take stock of the export performance in New Delhi on Friday.

There is a case for interest subsidy, says Anand Sharma

Stating that the government was seized of the situation on the international economic environment and the downturn in the West and Europe, Union Commerce and Industry Minister, Anand Sharma on Friday said that a "financial incentive package" for the exporters would be announced by next week to brave the emerging global scenario. "We have carried out a thorough review of the impact of European sovereign debt crisis and slowdown in the US economy on Indian exports. Hopefully, a package of incentives would be announced in the next few days. I will be taking a review meeting of the Board of Trade on October 11 and then formal announcement would be made on the new financial incentives," Mr. Sharma told reporters after an interactive meeting with the Federation of Indian Exporters Organisation (FIEO) and with the heads of Export Promotion Councils (EPCs) and Commodity Boards. "The government will be finalising what incentives and support can be there, in particular to the labour-intensive sectors," he remarked. Mr. Sharma said there was a case for interest subsidy to exporters as the rising credit cost has been making the Indian manufacturing much less competitive globally. Mr. Sharma said the purpose of todays consultation was to conclude the process which the Director General of Foreign Trade (DGFT) and Commerce Secretary have been doing. "I thought that before we come out with the export incentives for the current financial year on October 13, we must have this brainstorming exercise," he added. The stakeholders informed the Commerce Minister that the sharp cut in the drawback rates for most exporting items at a time when world demand is slowing down and volatility in the exchange rate was not advisable. "This will have considerable impact in slowing down exports. The high growth rates witnessed during the first two quarters was because the exporters wanted to utilise the benefit of the DEPB scheme," they said. Another point raised by them was the high cost of rupee export credit in view of the RBI's tightening monetary policy. They urged the Minister to introduce an Interest Subvention scheme for exporters. Sharing the concern of the exporter community, Mr. Sharma said the cost of credit has been a matter of very serious concern to the industry. There is also the weakening of rupee and the exporters which had booked orders are facing new challenges because there have been hoarding up of orders because of the global slowdown. "If need be I will again discuss these issues with the Finance Minister. The DGFT and the Commerce Secretary will talk to Finance Secretary and concerned officials hopefully within the next 10 days. The demand has weakened in traditional destinations particularly in the Europe but there is strong growth in Africa, ASEAN and South America," he added.



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Printable version | Oct 7, 2011 10:47:52 PM | http://www.thehindu.com/business/Industry/article2518290.ece The Hindu