Speaking at a seminar on "The New Exim Policy" organised by Ficci, Hegde admitted his failure to convince the finance ministry about the need for bringing down the cost of rupee export finance by 100 basis points. Even though general interest rates have been falling, the Reserve bank of India has hiked the interest rates on export credit from April 1.

The commerce minister said: "Many of us in the government are obsessed with short-term results." Referring to the finance ministry, he added, "a little loss of revenue in the short term will bother them. Long range quantification of the benefits, particularly in accelerating the inflow of foreign exchange, is often a casualty. It is like being penny wise and pound foolish."

Statingthat "we should also be pound-wise," Hegde wished that, "maybe after some time the finance ministry and the RBI will realise that if exports fall, it will be detrimental to the economy". He hoped they would take some positive decisions at the earliest.

It may be recalled that the RBI has strangely withdrawn the one percentage point reduction in the interest rates for export credit from April one. The RBI has hiked export credit rates for both pre-shipment as well as post-shipment credit from April 1. It has also hiked export credit refinance rates by 100 basis points to 8 per cent from 7 per cent on Thursday.

Even as exporters were demanding further cut in interest, the central bank will be dispensing away with the special credit rates introduced for exporters on August 6 last year. ``The RBI move will not help in boosting exports. In foreign countries, exporters are getting credit at a cheaper rate. In India, banks have been slashing lending rates in the last one month after the cut in CRR and bankrate,'' said an exporter.

At present, banks are offering pre-shipment credit up to 180 days at 9 per cent and between 180 days and 270 days at 12 per cent. From April 1, pre-shipment credit will be available to exporters at 10 per cent while beyond 180 days to 270 days, the rate applicable is 13 per cent. Credit against incentives receivable from the government covered under the ECGC guarantee up to 90 days will be revised to 10 per cent from 9 per cent on April 1.

As far as post-shipment credit goes, the rate on demand bills for the period for post-shipment credit will not exceed 10 per cent instead of 11 per cent. For issuance bills, exporters will et credit at rates not exceeding 10 per cent up from 9 per cent up to March 31, 1999, while for the bills beyond 90 days and up to six months from the date of shipment the rate has been fixed at 12% from April 1 up from 11% on March 31, 1999.

Hegde also underlined the need for better coordination between the commerce ministry and the finance ministry'srevenue department. "Any discord between the two will be at the cost of country's export efforts," the minister said, adding that he had "even proposed a joint orientation programme for customs and DGFT officials so that the two departments do not function as watertight compartments."

Hegde underlined the need for bureaucratic stability at a time, "when there is political instability." Stating that he had not changed a single officer after assuming office, the minister said, "continuity in the office of these people has led to concrete results. Close cooperation between the political administration and bureaucracy and proper understanding of each other can help generate good policy measures." He said this in the context of the Exim Policy which evoked a good response from the exporting community.

Hegde, however, said that he was not satisfied with the performance of his ministry. "We wanted to do many things but could not do them," he said. Referring to performance, he said, despite last year's ambitiousexport target of 20 per cent growth in dollar terms, the actual achievement was only one per cent.