The Centre has already given packages to exporters, now states should come forward to compensate the affected export sectors, Finance Minister P Chidambaram said at the 54th meeting of the National Development Council in New Delhi on Wednesday.
Besides giving some incentives to exporters, he said states should also initiate measures to improve functioning of the public distribution scheme. The Centre has to spend Rs 3.56 to given Re 1 benefit under PDS.
Finance Secretary D Subbarao said the finance minister suggested that states could refund state-level taxes to the exporting community. The finance minister said
in the long run, states will also benefit from exports, according to Subbarao.
Earlier in his inaugural address, Prime Minister Manmohan Singh sounded a note of caution on the possible impact of global slowdown, saying that it may impact India's exports and capital flows.
"Our economy is increasingly integrated into the global economy with the external sector now accounting for almost 40 per cent of the GDP and hence, we cannot be fully immune to international developments," the Prime Minister said.
Kerala Chief Minister V S Achutanandan said the rupee appreciation is badly affecting exports of agriculture commodities from the states.
The rupee appreciation has brought about "loss of markets and closure a host of small units with serious adverse consequences for employment," he said.
