The Federation of Indian Export Organisations (FIEO) yesterday blamed operational problems and the negative attitude of government officials for the slump in export growth last year.
That may be the reason exporters are losing interest day by day and that is why exports have come down, FIEO president Ramu S Deora said here.
For instance, the credit rates for a number of items under the duty entitlement passbook (DEPB) scheme have not been notified though two months are already over since the announcement of the new exim policy, he said.
More From This Section
In the absence of credit rates, exporters are unable to export under this route, Deora said.
Worried over the negative export growth rate in 1996-97, Prime Minister I K Gujral has called for a meeting with top exporters on June 26 in which Deora will also voice his views.
Compared to a healthy export growth of over 20 per cent in 1995-96, the exports dropped to 4.01 per cent last year causing anxiety among exporters and the government. Deora said analysis of export performance during the period revealed a downslide in export of gems and jewellery, leather, manmade yarn, fabrics, plastics and linoleum products.
The FIEO president termed recession in the global market and the price incompetitiveness of Indias exports in comparison to other countries such as Thailand, Malaysia and Korea as the reason for downfall in exports.
Deora also called for a readjustment by 10 per cent in the value of Indian rupee against the US dollar so that exports remained competitive. The demand for foreign currency has come down substantially due to the decline in imports, he said, adding our neighbours like Malaysia and China have devalued their currency by about 10 per cent which has made our goods uncompetitive in the global market. Referring to export finance, Deora said it is extremely expensive in India.
I have drawn the governments attention to reduce the rate of interest for export finance so that our exports can become competitive, he said.
While the interest rate in India is as high as 18-20 per cent, in the competing countries the rate hovers around five to six per cent, he said.
Deora termed recession in the global market and the price incompetitiveness of Indias exports in comparison to other countries such as Thailand, Malaysia and Korea as the reason for downfall in exports.
Referring to export finance, Deora said it is extremely expensive in India. I have drawn the governments attention to reduce the rate of interest for export finance so that our exports can become competitive, he said.
Deora said the exim policy should be structured in such a way that exporters are encouraged to opt for the schemes and they are able to compete in the stiff international market.
Under the Export Promotion Capital Goods (EPCG) scheme, the cap on limit of Rs 20 crore for import of capital goods at zero duty should be made available to all sectors, he said.
In order to boost exports, Deora stressed on the full involvement of the states. Exporting units are dispersed all over the country and unless and until there is full coordination between the Central and state governments, export efforts will not receive the required back-up, he said.
The state governments will have to be motivated to promote exports and one way of doing so would be to share with them part of foreign exchange earnings from exports, he said.
Stating that various kinds of taxes and levies such as sales tax, purchase tax, octroi and electricity duty are being imposed by the state governments, Deora said exporters should be exempted from these to make exports competitive.