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Industry body seeks interest free loans

By BS Reporter in Chennai/ Bangalore
December 16, 2008 10:34 IST
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Industries in Bangalore are not satisfied with the recent economic stimulus package announced by the Central government. They want more sops to bail them out, an industry body in Bangalore has said.

The Bangalore Chamber of Industry and Commerce (BCIC), which represents the medium and large industries in the state, has urged the Karnataka government to come out with a state-specific relief package for the industrial sector including announcement of a one-year interest free loan scheme to industries.

Justifying the need for another relief package, BCIC President, N N Upadhyay said, "The global economic crisis has impacted India harder than initially expected.

The road ahead for the Indian economy, particularly, Indian industry, appears quite difficult in the near future in view of the greater integration with the global economy than at anytime in recent memory.

The recent measures announced by the Central government do not seem to have had the desired effect. The state is even worse off as it is even more integrated globally due to the IT industry predominance and the large export industry base."

BCIC has submitted a few suggestions to the chief minister B S Yeddyurappa to fight the slowdown which includes additional spending on infrastructure sector to provide stimulus to the economy. The government should help exports of garments, IT, engineering, etc by making available finance on softer terms to mitigate the problem.

"The state needs to tighten the administrative machinery, improve governance, come down on corruption and stimulate infrastructure spending as these are key to future growth and development," Upadhyay said.

Addressing a press conference, here, he said the chief minister should prevail upon the Union government to reduce the lending rates by the banks by further reducing the cash reserve ratio (CRR) and repo rates as the economy is in a severe credit crunch. The transaction costs of the housing sector should be brought down by reducing the registration fee, he said.

Measures to deal with the problem of job losses in the IT and garment industry sectors should be initiated as these sectors are likely to witness lay-offs in the coming days.

Exporters of readymade garments, IT, engineering products should be helped by making available finance on softer terms to mitigte the problem, he added.

Upadhyay also suggested that the government allow 100 per cent export oriented units to sell about 35 per cent of their produce in the domestic market, so that they not only recover their costs and the in turn the government can earn extra revenues by way of value added tax and excise duties.

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BS Reporter in Chennai/ Bangalore
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