Reacting to the second quarter review of Monetary Policy Statement 2013-14, A Sakthivel, Chairman, AEPC, said, “The synergistic efforts of all the stakeholders including government has resulted in the average export growth of around 13 per cent in the last six months in this fiscal by garment sector. With the improvements in global sentiments which have renewed the prospect of capital outflow in the emerging and developed markets, India was poised to become a significant player. But, increasing the repo rate to 25 basis points will act as a detrimental to the industry because it will further stress the liquidity condition.” 

He says revising of the marginal standing facility (MSF) rate by 25 basis points from 9.0 per cent to 8.75 will not be very effective in easing out the tight liquidity condition,” he added. The industry is facing high cost of finance and increasing the repo rate will increase the lending interest rate. AEPC has already requested for separate chapter for pre/post packing credit rate of 7.5 per cent. “RBI should consider this once again so that momentum of garment export growth is not lost. 

Chairman AEPC, further said, with CAD also expected to moderate in line with the trade deficit which was two and half year low at 86.76 billion dollars (about Rs 5,32,133 crores) for the month of September 2013 and rupee fall has seized, due to the liquidity tightening measures industry was expecting the reduction of the interest rate. We are an employment critical sector and 80 per cent of garment industry being SMEs it will severely impact the export and employment growth. Further it will also diminish the business and consumer confidence. I request government to revise the interest rates downwards so that we leverage our export and employment potential.” 

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