Raise limit of export credit -- FIEO

Raise limit of export credit -- FIEO
PRESS TRUST OF INDIA

NEW DELHI, FEBRUARY 27: The Federation of Indian Export Organisations (FIEO) today said the government should increase the limit of export credit given by public sector banks from 12 per cent to 20 per cent to boost exports.

"The Union Budget should allow public sector banks to provide finances at 100 basis points over LIBOR and increase the limit of export credit out of the total lending by a bank from 12 to 20 per cent to make Indian exports competitive," president of FIEO, Navratan Samdria told PTI on FIEO's budget expectations.

He said the huge NPAs should induce bankers to give preference to small business and exercise caution in extending credit line to corporates. It is a well-known fact that NPAs are more in corporates and much lesser in the small scale industry.

Another area which needed to be addressed was introduction of uniformity in tax laws to reduce production cost and bring down transaction costs for exporters.

"The Indian exporters have to face high cost of credit, poor infrastructural facilities and this can be solved only if our tax administration is geared up to facilitate to maintain the low production costs whether for export or domestic consumption," he said.

The archaic tax rules/slabs should be changed and made uniform to the extent possible to ensure overall growth, Samdria said. Despite Indian products establishing their brands in the international market, high production and transaction costs were burdening the Indian exporters and leading to their incompetitiveness in the global market, he said.

On the reduction of excise duty, Samdria said duties on all those items should be reduced which benefit the lower income group. Hence, duty on luxury items like soaps could be hiked, but essential items like petroleum products should be exempted from a duty hike.

The government should chalk out a clear-cut policy to privatise the PSUs generating losses, he said adding the privatisation should be done in a phased manner.

Agricultural income of the rich farmers should be taxed and the tax exemption be raised to Rs one lakh. Advocating introduction of fiscal responsibility act, Samdria said it would help in monitoring the economy and ensuring avoidance of unnecessary expenditure.