While the stronger rupee brings smiles to importers and outbound travellers, it is the IT and the export sector which is bearing the heat.
On the basis of the rupee’s growth, the Government is also thinking of scaling down the export target to last year’s level of $125 billion from the ambitious $160 billion set in April.
“At the rupee rate of 40 to a dollar, we will just about manage last year’s figure of around 140 billion dollars,” a highly placed government official said.
He conceded that slowdown in export may result in loss of employment.
“Our estimates suggest that it could be in the range of 2.75 lakh by December,” he said.
According to an estimate of the Federation of Indian Export Organisations (FIEO), 13.5 million people are directly employed in exports.
“Trends show that the rupee will continue to rise. It has appreciated 8.33 per cent against dollar during the January-June period,” he said.
While export growth in May was 18 per cent in dollar terms, in rupee value, it was just about six per cent as realisations went down.
Orders till July were contracted before rupee started appreciating. “Orders have now started receding and the impact would be seen from next month,” the government official said.
Relief package for exporters
The pleas of the exporter, however, haven’t fallen on deaf ears.
To counteract the effect of the rise, the Central Government on Thursday announced a Rs 1,400 crore package that includes increased rates of duty drawback with effect from April 1, 2007.
The increased rate of duty drawback on nearly all products would cost the exchequer Rs 800 crore, while the government would bear another Rs 600 crore to provide two percentage point subvention to banks allowing concessional credit to exporters in certain sectors.
“The drawback rates have undergone significant changes in line with changes in the prices of inputs and duties. The rates have been revised upward on nearly all products,” Finance Secretary D Subbarao said.
The Finance Ministry officials also announced measures for exporters in textile, ready-made garments, leather exports, handicraft, engineering products, processed agriculture products, marine products, sports goods, toys and all SME sector.
“We are happy that the government has finally realised our plight. We hope that immediate actions are taken to save the country’s export,” FIEO President Ganesh K Gupta said.
The Rupee, meanwhile on Thursday, ended at a one-week low of 40.50/51 a dollar, due to demand from state-owned banks as well as oil refiners.
http://www.mumbaimirror.com/net/mmp...§id=5&contentid=2007071304051960916158377
On the basis of the rupee’s growth, the Government is also thinking of scaling down the export target to last year’s level of $125 billion from the ambitious $160 billion set in April.
“At the rupee rate of 40 to a dollar, we will just about manage last year’s figure of around 140 billion dollars,” a highly placed government official said.
He conceded that slowdown in export may result in loss of employment.
“Our estimates suggest that it could be in the range of 2.75 lakh by December,” he said.
According to an estimate of the Federation of Indian Export Organisations (FIEO), 13.5 million people are directly employed in exports.
“Trends show that the rupee will continue to rise. It has appreciated 8.33 per cent against dollar during the January-June period,” he said.
While export growth in May was 18 per cent in dollar terms, in rupee value, it was just about six per cent as realisations went down.
Orders till July were contracted before rupee started appreciating. “Orders have now started receding and the impact would be seen from next month,” the government official said.
Relief package for exporters
The pleas of the exporter, however, haven’t fallen on deaf ears.
To counteract the effect of the rise, the Central Government on Thursday announced a Rs 1,400 crore package that includes increased rates of duty drawback with effect from April 1, 2007.
The increased rate of duty drawback on nearly all products would cost the exchequer Rs 800 crore, while the government would bear another Rs 600 crore to provide two percentage point subvention to banks allowing concessional credit to exporters in certain sectors.
“The drawback rates have undergone significant changes in line with changes in the prices of inputs and duties. The rates have been revised upward on nearly all products,” Finance Secretary D Subbarao said.
The Finance Ministry officials also announced measures for exporters in textile, ready-made garments, leather exports, handicraft, engineering products, processed agriculture products, marine products, sports goods, toys and all SME sector.
“We are happy that the government has finally realised our plight. We hope that immediate actions are taken to save the country’s export,” FIEO President Ganesh K Gupta said.
The Rupee, meanwhile on Thursday, ended at a one-week low of 40.50/51 a dollar, due to demand from state-owned banks as well as oil refiners.
http://www.mumbaimirror.com/net/mmp...§id=5&contentid=2007071304051960916158377