After a two-hour meeting with the exporter community led by the Federation of Indian Export Organisations (FIEO),the government today indicated that it would start coming out with measures to provide a stimulus to the various export sectors in the next 10-12 days.
With Indian exports taking a bad hit because of the global economic downturn and slowing demand in the developed markets,commerce and industry minister Kamal Nath said there is certainly no way exports would reach the (planned) $200-billion target in the current financial year. In the light of this,the government,he said,would take all possible measures to ease the pain of the exporter community.
Circumventing questions on the possibility of a stimulus package for exports,Nath said the government would only take certain measures in the form of interest rate subvention for lower interest burden on exporters,access to dollar-denominated debt,etc.
The meeting,which was attended by Planning Commission deputy chairman Montek Singh Ahluwalia,Nath,Cabinet secretary KM Chandrasekhar,the finance secretary,the revenue secretary,the commerce secretary and the industry secretary,took stock of difficulties faced by exporters. The exporter community is demanding tax holidays on export income,a hike in drawback rates and interest subsidy,besides a two-year moratorium on repayment of bank loans.
At present export finance is available at 2 per cent below the banks prime lending rate. Addressing the problem of weak demand in advanced countries,Nath said the government is also considering diversification of markets. Exporting associations in the last 10 months have not received any refund of service tax and that is going to be looked into, Commerce Secretary GK Pillai said.
Nath also said procedural problems like delays in drawbacks payment would be addressed.