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Close on the heels of announcing a package of relief measures to exporters reeling under the appreciation of rupee vis-À-vis the US dollar, the Government is mulling another package to help cushion the adverse impact on their earnings.
The Commerce Ministry is now quite convinced that the appreciating rupee vis-a-vis US dollar was hurting export growth, which has come down to 14 percent in June from a level of 23 percent in April.
“We are thinking of a new package for exporters. Rupee appreciation has impacted exports and Government is seized of the matter. The Prime Minister is keeping himself apprised of the situation. We will look at new measures to ensure that the fall in export growth is arrested,” Mr Kamal Nath, Union Commerce and Industry Minister, said.
Mr Kamal Nath said that he was still hopeful that the export target of $160 billion set for the current fiscal would be met.
“Rising rupee is a deterrent in meeting the export target,” he said, adding that the Ministry was also constantly in touch with the RBI on this matter.
Although exporters welcomed the Finance Ministry’s July 12 package involving interest rate relief, adjustment of duty drawback rates and swifter reimbursement of past export claims, it was felt that these measures had not fully met the demands of the Commerce Ministry.
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Reacting to Commerce and Industry Minister, Mr Kamal Nath's earlier statement that the government was thinking of a new package for the exporters, the Finance Minister, Mr P. Chidambaram, has ruled out any more concessions to exporters affected by the appreciation of the rupee. Instead, he has reportedly asked them to get used to stronger currency as dollar inflows will continue to grow.
The government had granted a Rs 1,400-crore package in July for exporters. "We have taken note of the difficulties faced by the exporters and we have given them a package", he pointed out.
Exporters want more concessions to deal with the rupee appreciation against the dollar, complaining that their realisations have gone down and the prices they are quoting for new orders are turning away customers.
The rupee has appreciated about 9 percent since march. From the lows of over Rs 45 in October-November 2006, it is now ruling slightly above Rs 40.
Earlier, Mr Kamal Nath, who had also supported the exporters stated that the government was thinking of a new package for them.
The Finance Minister said there could not be a situation where the economy grows but rupee remains weak. Exporters should take this into account while booking new orders, he advised.
"When they book the new orders, they should factor these things into account. You cannot say the economy should grow but the rupee should not become strong", he stressed.
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