Loans to exporters should be considered as priority sector lending by banks: Prabhu urges Jaitley
New Delhi, Sept 21 (KNN) Raising concern about the issue of declining export credit which has been impacting exporters including Micro Small and Medium Enterprises (MSMEs), Commerce & Industry Minister Suresh Prabhu has suggested the Finance Minister Arun Jaitley to consider loans to exporters as priority sector lending by banks.
Through a written communication to Finance Minister, Prabhu said that the sharp decline in export credit has now become a matter of concern as it is impacting exporters in general and MSME units in particular.
Informing the numbers as quoted by RBI, the Commerce Minister stated that the outstanding export credit has come down to Rs 22,300 crore on June 22 this year from Rs 39,000 crore as on June 23 last year.
Also, the outstanding export credit which stood at Rs 28,300 crore as on March 30 has come down to Rs 22,300 crore as on June 22 this year, a decline of 21.1 per cent in this fiscal.
Concerned over this, Prabhu urged the Finance Minister to consider giving “priority sector” tag to export credit extended by banks.
Commenting over the “sharp decline in export credit”, Federation of Indian Export Organizations (FIEO) has said that even renewal of limits has become problematic for the sector, even in respect of companies having excellent track record.
In a letter, Prabhu said "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.”
He also urged for strict timelines for grant of credit including the renewal of limits.
Since 2011-12, India's exports have been hovering at around USD 300 billion. During 2017-18, the shipments grew by about 10 per cent to USD 303 billion.
Twin effects of depreciation of Rupee and rising current account deficit is dragging the economy behind.
This move as decided by Prabhu will promote exports and helps a country to create jobs, boost manufacturing and earn more foreign exchange.