NEW DELHI: Commerce and Industry Minister Suresh Prabhu has flagged concerns over a “sharp decline” in export finance and asked Finance Minister Arun Jaitley to consider giving “priority sector” tag to export credit extended by banks.

 

This comes days after Jaitley announced the Government’s plan to reduce non-essential imports and increase exports to bridge the current account deficit, which is seen as a major drag on the economy.

 

Suresh Prabhu has pointed out that on June 22, outstanding export credit had come down to Rs 22,300 crore, compared to Rs 39,000 crore a year ago, which is a fall of over 40 per cent. Compared to last March, too, there was decline of over 20 per cent.

 

The Federation of Indian Export Organisations (FIEO) has said that even renewal of limits has become problematic for the sector, even in respect of companies having excellent track record. “I request you to kindly have suitable instructions issued to banks to restore the flow of credit to the export sector to its expected regular levels, based on the required increase over recent peak levels, to factor in export growth currently taking place,” Prabhu said in his letter to the Finance Minister. He also urged for a strict timeline for grant of credit, including the renewal of limits.

 

Since 2011-12, India’s exports have been hovering at around $300 billion. During 2017-18, the shipments grew by about 10 per cent to $303 billion. Promoting exports helps a Country to create jobs, boost manufacturing and earn more foreign exchange.