Need to raise cash withdrawal limit for exporters: Nirmala
Commerce and Industry Minister Nirmala Sitharaman on Monday said she will press for increase in cash withdrawal limit for exporters, some of whom have shut their shops or scaled down production because of cash shortages following demonetisation of Rs 500/1,000 notes. After a meeting with export promotion councils here, she assured them that she would take up their demand of increasing cash withdrawal limit with the Finance Minister.
"They voiced the short term difficulties that they are facing. Majority of them felt they still had a segment of their activities (in cash)," she told reporters after an hour long meeting. The minister said certain exporters mentioned that "because of this contraction, they do not have the cash. So some of them prefer closing down the units and telling their workers to come back after a week, or some of them reducing the capacity of production from 100 to 30-40 per cent. They felt that this month, the output might have bearing".
Exporters in labour intensive sectors like carpet, handicraft and handloom buy raw material and pay wages in cash to migrant workers. Due to the limitation of cash withdrawal of Rs 50,000 per week, not all payments are possibly being made, she said, adding "carpet exporters clearly saying that migrant and transient workers constitute a big chunk. So they felt paying these workers are still not happening through bank accounts, so cash payments are important".
Exporters demand is "can this limit be increased to three or four or up to five lakh. They wanted larger weekly cash withdrawal ceiling and not Rs 50,000", she added. "We assured that, we will take a quick and well compiled report back to the finance ministry so that quick remedial solutions are offered. We will pitch for them and I am sure that the Finance Ministry will give us a sympathetic hearing," she said.
On the demand to increase the cap, she said: "I will definitely draw the attention of the Finance Minister". She added that there is no quantification of output loss due to short term closure of units.
"I don't expect it to be a month long disruption. It was this week, post November 10 that we are talking about," Sitharaman said. Exporters body FIEO President S C Ralhan said the industry concern has three key issues -- payment of wages to seasonal and immigrant workers; transportation of raw material and finished products with absence of cash for the truckers; and procurement of raw materials or finished goods from unorganised sectors including farmers.
"We requested for increase in the limit of withdrawal from the current account which is fixed at Rs 50,000 per week. It should be hiked to the level of 1 per cent of preceding years' sale per month," he said.
India is pitching for simultaneous negotiations for liberalisation of trade in goods and services in the proposed Regional Comprehensive Economic Partnership (RCEP) agreement. "India has stressed on the need for parallelism between the negotiations on goods and services (in RCEP)," Commerce and Industry Minister Nirmala Sitharaman said in a written reply to the Lok Sabha.
RCEP negotiations were launched in Phnom Penh in November 2012. The 16 countries account for over a quarter of the world's economy, estimated to be more than USD 75 trillion. The 16-member bloc RCEP comprises 10 ASEAN members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six free trade agreement partners -- India, China, Japan, Korea, Australia and New Zealand.
She said the agreement is intended to facilitate and thereby increase goods and services trade as well as investments. Replying to a separate question on WTO, she said India is working with the G33 group of developing countries at WTO on all agricultural issues.
"Proposals for finding a permanent solution on public stockholding for food security purposes and an agricultural special safeguard mechanism for developing countries are ongoing negotiations at WTO," she added. She also said that at a recent WTO meeting, some members raised questions about India's safeguard investigations concerning certain aluminium and steel products.
"India has been defending its interests by appropriate interventions justifying its action under WTO," she added. To another question, she said the share of India's exports to SAARC countries has increased to 6.42 per cent during April-August this fiscal from 5.57 per cent in 2013-14.
The share of imports too rose to 0.73 per cent during April-August of 2016-17, from 0.55 per cent in 2013-14. "The government continues to engage proactively with SAARC countries to strengthen trade and economic relations," she said.
Replying to a separate question, she said the copyright board is likely to be set up during the next fiscal year. On MSMEs, Sitharaman said that in 2015-16, there were 4,8,6291 sick MSME units. The maximum are in Uttar Pradesh (95,989), Gujarat (42,579), Karnataka, Kerala and Rajasthan.