Business

India: AEPC demands separate chapter for exports in the banking sector

RBI has released the midterm monetary policy, where the key rates like repo rate, CRR, bank rate and reverse repo rate remains unchanged. With RBI resisting any reduction of interest rate/ repo rate, Chairman AEPC expressed his concern that the momentum of the garment export growth may be slowed down.

After the announcement of RBI midterm monetary policy, Chairman AEPC said, “With the inflation hovering at 14 month high of 7.52% and slow manufacturing growth of 1.8% for the month of October, industry was expecting some relief in terms of lowering of interest rate. The import being all time low after March 2011 provided fiscal room for RBI to reduce the interest rate.”

This job critical industry is suffering from high input cost leading to reduced profit margins. Majority of our factories are SME’s and an employment generating sector, and due to adverse consequences of not lowering interest rates, it might lead to the loss of jobs and further slowing of manufacturing activity, he added.

Sakthivel said: “AEPC has already requested for separate chapter for pre/post packing credit rate of 7.5%. Even the Padmanabhan committee constituted by RBI has recommended this sector to be covered under the priority sector lending. RBI should consider this favorably so that momentum of garment export growth is not lost.”