Three months of consecutive growth have surely made life easier for millions of exporters but the real worry is far from over. With just few weeks left for the Budget 2010-11, concerns over a pull back on incentives are already looming large.
"We are aware that while some sectors are seeing growth, some sectors are still not showing growth and need further government support," said Commerce Minister Anand Sharma.
With the current growth mostly driven by the incentive packages, the primary concern now is on the issue of interest refunds due for expiry next month. These refunds form over 15 per cent of exporters' overall costs.
Unless the government gives an extension in the upcoming Budget, the fluctuating rupee is also of no help.
That is not all. Rising inflation has also made sure that the Reserve Bank of India has started hiking interest rates to tighten the cash flow to curb spiraling prices, but higher interests rates with no refunds would mean that the sector is headed for yet another slump. And this time the government won’t have much to do either.
Source : profit.ndtv.com