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Our Bureau

New Delhi, Sept. 21 Even as the Union Commerce & Industry Minister, Mr Kamal Nath, has assured that the Government would take suitable steps to stem the appreciation of the rupee, exporters have ratcheted up their plea for cuts in bank lending rates.

In a statement, the Federation of Indian Export Organisation (FIEO) chief, Mr G.K. Gupta, said that cut in the US Federal rate by 50 basis points on Thursday, with another cut of similar basis points expected in October and the one of 25 basis points effected a fortnight ago, would together contribute to pouring of funds from abroad as long as the Reserve Bank of India does not effect matching cut in domestic interest rates.

Hence, the RBI should immediately cut interest rates, which would enable the banks to lower their prime lending rate (PLR), providing some relief in export credit to trade and industry.

He added that the increase in PLR by about 2-2.5 per cent has offset the advantage accrued to the exporting community due to the extension of pre-shipment and post-shipment credit at 4.5 per cent below PLR.

The Government should bail out exporters in such a critical juncture as order book of exporters has become thin.

Stating that the Government must forthwith implement the package announced in June for exporters, Mr Gupta said that most of the announcements remain on paper, with exporters deriving little benefit on the ground.

He said that arrears of increased DEPB (Duty Entitlement Pass Book) drawback and interest rate benefits on export credit have not been provided to exporters, while service tax relief has been only a small relief, since many important services have been left uncovered by the refund mechanism.

Mr Gupta said that there is little justification in denying service tax relief on transport goods from factory inland container depots, when relief is available from ICD to gateway ports.

The exporters have also sought exemption of service tax on all services used in the export activities, as the extant refund mechanism is cumbersome and would only add to transaction cost to trade and industry.

More Stories on : Exports & Imports | Forex | Interest Rates

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