Singh, Reddy focus on appreciating Re

In fact, Commerce Secretary Dipak Chatterjee had only on Wednesday allayed concerns voiced by various export bodies that adequate measures would be taken to ensure export growth even as the Indian currency was appreciating. The assurance was given when a delegation led by Federation of Indian Export Organisations president Rafeeque Ahmed met him with a set of alternatives drawn up by various constituents in consultation with bankers. Among these were directing the RBI to open a dollar account for lending to banks at LIBOR plus 0.75 basis; introducing freight subsidy for reimbursing 50 per cent of the freight if its value was 2 per cent of the f.o.b. value of exports to offset to some extent the transaction cost; and asking RBI to give directions to banks to first meet the requirements of foreign currency funds of exporters and then only extend FCNR (B) loans to corporates who were not exporting.

It was pointed out that the non-availability of dollar to exporters was because corporates who might be exporters or otherwise were also sourcing FCNR funds from banks at low interest. The delegation also drew the Commerce Secretary’s attention to a recent presidential ordinance which introduced a new Section 10BA for allowing 100 per cent tax exemption on export profits from wooden-based handicrafts.