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| EEPC seeks booster package as exports likely to slip into red |
| Press Trust of India / Mumbai Feb 04, 2009, 11:56 IST |
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With engineering exports likely to post a double-digit negative growth in Q3 this fiscal, the Engineering Export Promotion Council (EEPC) is busy meeting top Government officials seeking its help to boost exports.
"The global financial crisis has hit our engineering exports hard with order-books drying up. While this fiscal should be alright, things could worsen after April," EEPC Chairman Aman Chadha told PTI here.
The Council has requested that the sector be brought under the Interest Subvention Scheme in its meetings with senior Government officials, including Union Commerce Minister Kamal Nath and Planning Commission Deputy Chairman Montek Singh Ahluwalia.
"The April-September period witnessed a robust 43 per cent growth in exports but it dipped sharply in December at just 0.8 per cent," Chadha said.
For November-December, EEPC data paints a gloomy picture with exports sliding into the red at about 10 per cent.
The two stimulus packages announced by the Government have not yet got reflected at the ground-level, Chadha said.
"Banks are overcautious. They are not taking risks. They do have liquidity but it is not getting injected into the system. It remains to be seen how soon the effects of the stimulus package are reflected (at ground-level)," he said.
"Despite the (economic) slowdown, we still expect a 10-15 per cent growth in FY 10," Chadha said, adding that order books are kept going "as the sector has a slow gestation period and project execution takes up to 6-9 months."
In 2007-08, India's engineering exports rose to $33.28 billion against the previous year's $26.49 billion.
EEPC has sought fiscal concessions from the Government to boost capacities, extension of rupee export credit to urban co-operative banks and refund of service tax.
"The sector provides around four million direct and indirect jobs and is perhaps the largest employment-intensive sector in the region," Chadha said.
The export body has also sought a raise in the general rate of depreciation on plant and machinery from the present level of 15 per cent to 25 per cent.
"This would give exporters tax benefits and encourage MSMEs to undertake fresh investments and create demand for capital goods in the country," Chadha said.
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