Exporters in the Tirupur cluster are disappointed with the RBI’s decision to keep the repo rate unchanged at 6.25 per cent. They were expecting a reduction in interest rate, post demonetisation. A reduction is as important at this juncture to increase competitiveness at a time when export growth rate was a meager 3.54 per cent for the nine month period of this fiscal year 2016 -17.
Exporters also feel this is the right time for knitwear sector to capture the market that’s leaving China, due to an increase in cost of manufacturing. If the opportunity is missed, the market would be captured by competing countries like Bangladesh, Vietnam, Indonesia and Cambodia.
They add that growth of the apparel, leather and footwear sectors, which are labor intensive, is possible only when they get borrowings at a lower rate. Similarly, they are concerned over the lack of thrust given to adequately fund the Pradhan Mantri Rojgar Protsahan Yojana, a scheme that was envisaged during 2016-17 financial year to incentivise employers for generating employment. The sixth bi-monthly monetary policy statement for 2016-17 has maintained the repo rate at 6.25 per cent.