FM wants cheaper loans for exporters, in talks with RBI

Finance Minister Palaniyappan Chidambaram on Friday said that his ministry is in talks with the Reserve Bank of India (RBI) to make bank loans cheaper for exporters, aimed to help reduce wide current account deficit (CAD) by boosting export income.

It may be noted that India currently holds the world's third largest CAD, which was a major factor in the recent rout of the domestic currency rupee and also exports account for some 25 per cent of GDP.

Speaking at the Interactive Session organised by Federation of Indian Exports Organisations (FIEO) here on Friday, the union minister said exporters have been lobbying to be included in a category of priority lending that guarantees easier access to bank credit and lower interest rates, a privilege usually reserved for agriculture and small businesses.

With the slowdown in global demand, Chidambaram continued, exports decline was inevitable. Moreover exchange rate remained remarkably stable at that time though fundamentals required depreciation of rupee, said he.

Further, FM said that US economy is on upswing. Some countries in EU like UK has posted good results, Japan is bouncing back and may touch 3.0 per cent GDP growth. This is the time, Chidambaram added, “Bring back market and bring back customers.”

Responding to the suggestion of FIEO President M Rafeeque Ahmed, the minister said that he supports the proposal to bring exports under priority sector lending and he is in talk with the RBI on the matter. 

On FIEO's request to create an Export Development Fund with a corpus of 1 per cent of exports value for aggressive marketing, Chidambaram said that the commerce minister is pursuing the proposal.

On request for nodal grievance redressal officer, FM said that he is ready to appoint nodal officers in CBDT and CBEC and assured that his ministry will respond to every suggestions but stressed the need to have effective redressal mechanism at local levels for expediting the same.

Exporters highlighted the delay in getting refund particularly excise rebate affecting their liquidity and asked for online excise refund. They flagged the problem of past cases of duty drawback and non-updation of BRC details in customs systems leading to delay in drawback and shipments delays.

Revenue Secretary, Commerce Secretary and DGFT also addressed the participants. Over 150 exporters participated in the deliberations.