The garment exporting community in Tirupur has categorically stated that the Reserve Bank's fifth bi-monthly monetary policy has failed to meet their expectations.

The RBI Governor, Raghuram Rajan, has given reasons for not making any changes in this policy statement.

He has noted that there is still some uncertainty about the evolution of base effects in inflation, the strength of the ongoing disinflationary impulses, the pace of change of the public’s inflationary expectations, as well as the success of the government’s efforts to hit the deficit targets.

"But we were expecting a reduction in the interest rate and special consideration for exporting units,'' the President of Tirupur Exporters' Association, A Sakthivel, said and pointed out that the government was yet to announce 3 per cent interest subvention scheme on packing credit.

Interest subvention

This expired at the close of the last fiscal. It is already impacting the competitiveness of Indian garments in the international market, considering that China has recently reduced the interest rates.

He reiterated the export sector's long-pending demand for a separate chapter and fixing the pre and post shipment export credit at 7 per cent.

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