Bring back exports under priority sector lending, recalls FIEO

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SME Times News Bureau | 30 Oct, 2013
With a view to increase liquidity to export sector, Federation of Indian Export Organisations (FIEO), President, M. Rafeeque Ahmed Tuesday re-iterated to bring back exports under priority sector lending and put a separate cap on exports.

"Bring back exports under priority sector lending and put a separate cap on exports, within 40 percent norms, so that the apprehension that other priority sectors will lose attention is equally addressed," said FIEO chief in a press release.

The apex exporters body in its releases, added that pressure on currency could be lessened only through exports on sustainable basis and demanded that recommendation of the Padmanabhan Committee be implemented in a time bound manner.

Ahmed agreed with the Reserve Bank of India (RBI) that outlook of global growth has improved with fiscal concerns abating in the US and key economic indicators improving in the Euro area. He exuded confident to post better exports result in the second half of the current fiscal.

"The Reserve Bank of India's twin moves of increasing the LAF repo rate by 25 basis points and decreasing the MSF rate by an equal amount was widely expected, after the Macroeconomic Review put out by the RBI a day before," said Ahmed.

RBI has continued its focus on inflation rather than on growth said FIEO Chief.

However, Finance Minister P Chidambaram, last month, has said that the government was talking to RBI to see if export credit could be treated as priority sector lending, a measure that can increase the flow of funds to the sector.

"The finance ministry supports the proposal to bring exports under priority sector lending and the ministry is in talk with the RBI on the matter," Chidambaram said earlier while responding to the suggestion of FIEO Chief.