In talks with FinMin, PMO to improve export credit: Suresh Prabhu

“One big challenge for the export sector is the issue of finance. We have taken it up with the Finance Ministry. Once we have more working capital, in the export field you see more benefits,” Prabhu was quoted as saying.

The Minister of Commerce and Industry Suresh Prabhu has said his ministry is working with the Finance Ministry and the Prime Minister’s Office (PMO) to provide liquidity to the export sector.
 
“One big challenge for the export sector is the issue of finance. We have taken it up with the Finance Ministry. Once we have more working capital, in the export field you see more benefits,” Prabhu was quoted as saying.
 
He was talking to the media on the sidelines of a logistics event organised by exporters body FIEO on Tuesday.
 
Exporters have, for long, been demanding banks to be a liberal in extending them loans, as a decline in credit was hitting their performance.
 
Prabhu said that the Prime Minister was also aware of the problem and was "focussed on the issue".
 
Accordint to a report by the Businessline, export credit provided (till 20 July 2018) by banks fell about 47 per cent to ₹21,900 crore compared to the same month last year. 
 
Overall lending to the priority sector, however, increased 7.5 per cent during the month, as per the latest RBI data. Even compared to March this year, there has been a 22.7 per cent drop in export credit.
 
Micro, small and medium scale enterprises (MSMEs) have been hit the most by the liquidity crunch. They are not in a position to take orders in case of financial drought.
 
Even the delay in refund of input tax credit has added to their problem.
 
Exports from sectors dominated by MSME units — such as plantations, marine products, readymade garments, jute manufacturing including floor covering — continue to post a decline despite an overall growth in exports.
 
Source: Businessline
 

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