Anand Sharma to discuss industry's concerns over RBI's rate hike with FM

SYDNEY: Commerce and industry minister Anand Sharma will meet finance minister Pranab Mukherjee to discuss concerns raised by industry on the recent rate hikes announced by the RBI and ways to ensure availability of cheap and adequate credit. The minister will also take up exporters' demand of continuation of the duty entitlement passbook scheme-- the popular input duty reimbursement scheme that is to expire next month-end.

"I will discuss a number of issues with the FM including some concerns of industry related to the recent hike in rates and the need to ensure adequate availability of credit on easy terms," commerce and industry minister Anand Sharma said on the sidelines of an India-Australia business meet organised by Ficci in Sydney on Wednesday.

The RBI had hiked key policy rates by 50 basis points in its credit policy announced on May 3 pushing up cost of funding for the Indian industry across sectors.

Exporters body Fieo had asked for capping of interest rate for small and medium exporters at 7% against the present rate of about 10.25% applicable on all exporters.

"Credit has to be available at affordable rates so that the industry has funds to add to capacities and increase production," Sharma said.

Availability of adequate credit has become a major concern for exporters. Export credit fell to 4.1% of the net bank credit in December 2010 as against 9.8% in March 2000 and 12% stipulated by the RBI, Fieo said.

The minister is in Australia leading an industry delegation from Ficci to discuss bilateral issues.

(The correspondent has gone to Australia and New Zeland along with the commerce minister at the invitation of govt)