Cheap dollar credit for exporters
The government plans to issue guidelines on foreign exchange credit to exporters at affordable rates and announce incentive schemes that are compliant with the rules of the World Trade Organisation (WTO).
Goods exports in July posted a marginal growth of 2.25 per cent (year-on-year) to $26.33 billion as shipments from major sectors such as petroleum, gems and jewellery, engineering goods and leather registered a decline.
“We are concerned that it (export credit) has fallen, and will come up with the contours of a vibrant programme (to address the issue) soon, which will particularly support micro, small and medium enterprises,” Goyal said at a meeting of the Board of Trade.
The plan is to make foreign exchange credit available to exporters at competitive rates, he said, adding the rates were likely to be in the sub-four per cent category.
He said his ministry was waiting for finance minister Nirmala Sitharaman to take a call on some of the issues on export credit. The bankers are on board and “...we shall shortly be coming out with the contours that have been finalised between the Reserve Bank of India (RBI), the finance ministry and the commerce ministry,” he added.
Export credit disbursement declined 23 per cent in 2018-19 to Rs 9.57 lakh crore from Rs 12.39 lakh crore in 2017-18.
Goyal said the merger of banks would enable them to disburse enhanced credit, raise their risk appetite and to mop up resources from the market.
The ministry will soon be coming out with a credit scheme for exporters with enhanced insurance cover up to 90 percent instead of the present 60 per cent.
The government would also notify new antidumping rules this month.
The dues on account of GST refunds to MSMEs would be paid within 30 days and the one-time settlement policy will benefit MSMEs and retail borrowers.
The minister urged states to send their representatives to the Board of Trade meetings. The level of participation of states and ministries will determine the co-operation they would get from the Centre, he said.
“If both the senior officials and state ministers are not there, it is a matter of serious concern. I may have to talk to the respective chief ministers, he said.
“I hope the message will go to those states who, for the second time, have not attended this meeting,” he added.
Similarly, for central ministries, which have a stake in exports, “I will take it seriously if they are not able to come, unless they give a reason well in advance,” Goyal said.