FIEO calls for comprehensive short-term relief package

New Delhi, Dec 8 (UNI) Reacting to Finance Minister P Chidambaram's statement on midterm review, Federation of Indian Exporters Organisation (FIEO) today said government's relief measures should percolate to exporters rather than remaining on papers and called for comprehensive short term relief in a single package effective atleast for a year.

The mid term review yesterday stated that sops to exporters was not a sustainable solution to rupee appreciation and suggested that exporters improve their productivity in order to make the economy more competitive, as a long-lasting solution to the problem.

The document added, ''Relative appreciation of the currencies of major competitors; the import intensity of the major export sectors; combination of exchange rate and inflation reflected in Real Effective Exchange Rates; and slowdown in growth of world economy and world trade affect exports.'' Agreeing with the review FIEO President G K Gupta said, there is no definite conclusion of one to one relation between exchange rate and exports growth as there have been years in the past when rupee appreciated but exports showed growth and vice-a-versa.

However, Mr Gupta said that exporters are still struggling to get the increased drawaback for shipments effected from April One and so is the arrears on account of subvention of interest rate.

Refund of service tax on select services will add to transaction cost looking at enormous paperwork involved, he added.

FIEO Chief further said that exporters are commited to exports and thus are cutting their cost, incresing their productivity, diversifying products and markets and moving up the value chain.

Such thing will not happen overnight and thus, he added, short term relief is need of the hour but should be comprehensive and be declared in a single package effective atleast for a year.

He also requested the Government to seperately notify relief which are legitimately due and relief which are in the nature of sops to clear public perception.

Mr G K Gupta said that, never in the last few decades rupee appreciated by 15 per cent in 12 months time and thus the present situation is extraordinary and unique.

He also agreed with the Finance Minister that in the long term exporters have to adust themselves with appreciating rupee.

Mr Gupta re-iterated his stand that exporters are demanding for fiscal benefit to tide over the present problem and such benefits should not be perpetual in nature.

However, Government should provide adequate relief which should percolate to exporters rather remaining on paper.

UNI