Industry happy with package, exporters disappointed

Industry today welcomed fresh stimulus measures, mainly cut in policy lending rates by the Reserve Bank of India (RBI) and focus on infrastructure funding by the government, but exporters reeling under the global meltdown found the package "disappointing".

Apex chambers - FICCI and CII - hailed the second stimulus package as also the cuts in the policy interest rates of the RBI. However, Assocham said it expected more.

Exporters, who had high expectations from the government in the run-up to the announcement, said they were disappointed.

"This package is timely and will help the next quarter demand considerably. The repo and reverse repo cuts, along with reduction in CRR, will ease liquidity for banks and have a positive effect on the cost of credit," CII Director General Chandrajit Banerjee said.

FICCI Secretary General Amit Mitra said the government and RBI had addressed a wide range of concerns. "The steps should hopefully give big boost to the slowing economy," Mitra said expecting that business confidence would be restored.

FICCI said the ball was now in the court of banks to "come out and lend to corporates rather than invest money in government securities they had been doing earlier".

Assocham said the package was "in the right direction but falls short of expectations". Assocham Secretary General D S Rawat said the chamber expected a relief of Rs 1 lakh crore.

On the other hand, the Federation of Indian Export Organisations (FIEO) said exporters were not happy with the steps. "We find no serious consideration (of exporters' demands) except extension of the DEPB scheme," FIEO President A Sakthivel said.