New Delhi, July 16 The Federation of Indian Export Organisations (FIEO) is concerned over the decline in non-food credit to Rs 3,58,494 crore in 2009 from Rs 4,88,719 crore in 2008.
Commenting on the latest RBI Update, the FIEO President, Mr A. Sakthivel, said while the bank credit to the commercial sector had declined in 2009 on a year-on-year basis to 15.5 per cent (Rs 4,05,176 crore), the credit offtake in 2008 was 24.5 per cent.
At the same time, the net bank credit to the Government on a year-on-year basis had increased from Rs 80,371 crore to Rs 4,54,313 crore, which is nearly a five-fold increase over the previous year. Mr Sakthivel stated that investments in government securities had almost trebled to Rs 3,24,213 crore from Rs 1,42,800 crore in 2008, while the PLR has remained constant in the 11-12.25 per cent range, despite the declining offtake by the commercial sector.
The FIEO stated that a declining credit offtake, higher investments in government securities, and interest rates that show no sign of moving southwards do not augur well for the MSME export sector given the current slowdown.
Source : Business Line