Tweaking the Trade Policy; Boosting India Inc.

In a bid to provide some relief to slowing manufacturing and exports, the government is set to tweak the trade policy this week. The commerce ministry officials met top industry leaders to get a general feel of the sectors and issues faced by them.

The ministry still maintains a bleak outlook for the year. Cost of credit, interest subvention and availability of dollar credit continue to be the main concerns of the ministry. The ministry is also concerned with high transaction costs and the annual supplement to the trade policy will address these issues.

“Dollar credit is a big cause of concern for the sector. The government is working on this and the committee has been given the issue,” says Anand Sharma, Commerce & Industry Minister.

The industry feels that slowdown may not impact the manufacturing sector and the economy so much but the steps the government is taking, for example replacing DEPB with a less flexible duty drawback scheme, could have a detrimental effect.

Speaking on the same issue, Anand Mahindra , VC & MD, Mahindra Group said, “some actions by the government will be counter-productive and will neutralise growth."

YC Deveshwar, Chairman, ITC, who also was a part of the meet said, “consumer finance is expensive, and this has deferred the buying cycle for people."

The board of trade was called by the ministry in the run-up to the trade policy, but it seems the government, this time, may not have space to accommodate the industry\'s demands due to the rising pressure on the fiscal deficit.

Source : yourmoneysite.com