New Delhi: Exporters on 21 September mounted pressure on the government to bail them out of the crisis triggered by the rupee rising to sub-40 level against the US dollar, while demanding immediate Reserve Bank intervention to abate the Indian currency.
Federation of Indian Export Organisations (FIEO) president Ganesh K Gupta said the RBI should not only intervene directly in the foreign exchange market to support the falling dollar but also cut the interest rates to check the foreign fund flows.
“We want immediate intervention by RBI,” he said. Besides checking the overseas fund flows, a cut in the prime lending rate (PLR) would reduce exporters’ cost of borrowing. “The advantage of pre-shipment and post-shipment credit at 4.5% below PLR has been offset by the increase in the benchmark interest rates,” the FIEO chief said.
Gupta said the government has not implemented the package for exporters announced in June this year. “The announcement simply remained on paper and arrears of increased Duty Entitlement Pass Book (DEPB) and drawback have not been given to exporters,” he said.
He also demanded extension of recently notified service tax waiver to transport of goods from factory to container depots.
The IT sector is also feeling the brunt of rupee appreciation with a fall in margin from offshore business, which forms bulk of its revenue.
Industry body NASSCOM said the government should extend the tax benefits under the Software Technology Park of India (STPI) scheme for another 10 years. “One step that will send a very positive signal to the industry and investors is the extension of tax incentives by 10 years under the STPI scheme,” it said in a statement.