Exporters say govt relief package is not enough

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Exporters say govt relief package is not enough

The government's yesterday announced a relief package for exporters struggling with the rupee rise. However, several small and medium enterprises say the Rs 1,400 crore sops are just not enough.

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The government had announced a relief package for exporters, struggling with the rupee rise , yesterday. However, several small and medium enterprises say the Rs 1,400 crore sops are just not enough, reports CNBC-TV18.

The government's attempt to rescue exporters through a series of sops may not be enough to save the smaller enterprises to survive the impact of the hardening rupee and high interest rates.

Vaijanti Pandit , President, Western Council, FICCI said, "To an extent these sops have come at a right time - when exporters are badly hit. But exporters are saying it is not enough because the losses that they are making are to the tune of 11% at the least and the sops will cover up only 2-3 %."

Nine identified sectors in the SME space including textiles , toys and ready made goods will now enjoy lower interest rates on pre shipment credit for 180 days and post shipment credit for 90 days. But this clause has thrown open several questions and ambiguity in the industry.

Ajit Kamath , CMD, Arch Pharmalabs said, "What about exporters that are beyond 180 days as far as payment terms are concerned? What happens to differentials between 180 days and 90 days?"

Exporters say the measures are not enough for the magnitude of losses that have hit them. Interest rates have soared by over 4% in the past six to nine months. The government has announced a relief of only 2%, that too, only by the state-owned banks, while many exporters bank with private and foreign banks.