'Continue stimulus for 1 and a half years'

Amid speculations that stimulus measures could be rolled back in the forthcoming Budget, apex body of exporters FIEO asked the government on Monday to continue the incentives for at least another one and a half years.

After a 13-month contraction following the slowdown in demand in the western markets, India's exports started recovering from November.

Exports increased by 18.2 in November and by 9.3 per cent in December 2009. It grew by 11.5 per cent in January this year.

The Federation of India Export Organisations said the growth in exports seen in the last three months is mainly on account of low base effect and the stimulus provided by the government to exporters.

The chamber has urged the government 'to extend the stimulus for exports by at-least one and half years.'

". . .while determining whether a sector has done well or not, reference point should be the year when the sector was doing well," added FIEO president A Sakthivel.

FIEO said that sectors like tobacco, man-made yarns, tea and coffee have shown growth due to stimulus provided by the government and 'in case of abrupt withdrawal of stimulus these sectors may again enter into negative territory'.

In the wake of the contraction in exports, the government had provided incentives like two per cent interest subsidy, higher duty drawback and refund of services tax in 19 categories of services.

For the latest on Budget 2010-11, click here!