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Hegde raps RBI for withdrawing cut in export credit interest rate

Union Commerce Minister Ramakrishna Hedge today criticised the Reserve Bank of India's decision to withdraw the reduction of two per cent in the interest rate on export credit with effect from April 1.

The central bank has failed to take a long-term view of the exporters' requirements, Hegde said in Coimbatore in Tamil Nadu while addressing members of the Southern India Mills' Association.

He called for a long-term policy in this regard as an export market could not be created overnight. Although it had been announced that the reduction would be available only till March 31, the bank should realise that exporters required more time to cultivate and win over importers and this process naturally took time, he added.

Referring to the severe recession faced by the textile industry, he said since the mills in Bombay and Ahmedabad had not paid attention to modernisation and their owners continued to milch the mills, they were forced to close down. He cautioned the mills in the south to pay more attention to modernisation.

Agreeing with the mills' contention that "antiquated" labour laws like the one that mills should pay a minimum bonus of 8.9 per cent every year to the workers were threatening the very viability of the mills, Hegde expressed hope that the new labour laws in the offing would solve many of the problems.

He said the country had not reached the desired growth rate on the export front since exports had not been given priority in the scheme of things all these years. A proper climate and infrastructural facilities could have enabled the nation to attain an export target of $ 100 billion by now, he added.

"We have not yet crossed $ 35 billion due to various reasons such as multiple tax burden, lack of infrastructure, an uncooperative if not hostile bureaucratic set-up, particularly at the lower level, and antiquated labour laws which were the consequences of the country's experiment with phoney socialism. Above all, the exporters had not been provided with a level playing field to face international competition," he reasoned.

Hegde said while the government should lessen the tax burden on exporters, the industry should devote more attention to quality, delivery, packaging and pricing to step up exports.

UNI

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