January 21, 2008
Lifeline for exporters
The government is planning more sops for exporters. It is now contemplating devising a mechanism to enable exporters to invoice their orders in rupees. For exporters, it will mean assured returns for their goods and services without any impact of currency fluctuations.
It’s the first time since the rupee started appreciating that the government is considering an intervention of this kind. The government is likely to extend this facility to sectors like textiles, leather, handicrafts, etc., which have been the worst hit. The Commerce Ministry, though, is trying to assess if the measure will fall foul of WTO regulations against “currency retention schemes”—a kind of government exchange rate subsidy for exporters.
Labour reforms on cards?The government might finally push ahead with labour reforms. The buzz is that retrenchment of workers might be permitted provided they are paid adequate compensation.
The Labour Ministry, under Oscar Fernandes, has asked industry bodies like CII and FICCI to work out the maximum compensation package for laid off employees, which could range from 45-90 days of salary.