TEA President addresses 19th AGM Meeting
Address of Shri. A. Sakthivel, President, at the 19th Annual General Meeting at TEA Conference Hall on 17th August 2009, at 6.00 p.m.
It gives me a great pleasure to extend a warm welcome to all of you at the 19th AGM of our Association. At the outset, I would like to state that I am always delighted at this opportunity to meet all of you while reviewing the activities of the Association.
Before going into other details, I wholeheartedly thank all our members at this occasion and wish to say that because of your continuous faith and confident in my leadership, I could serve the export sector, especially to our knitwear sector. The Government of India has recognized my services to export trade and conferred me with Padma Shri award.I dedicated this award to knitwear export sector of Tirupur.
I have now got more opportunity to serve the export sector in a better way, after being elected as President of Federation of Indian Export Organization (FIEO) this year. Due to demand compression in the US and EU Markets, the crisis has emerged and my most priority has increasingly become to ensure the competitiveness of our knitwear sector and thereby helping them to sustain in the global market.
The global financial turmoil originated in USA and consequent economic recession in developed economies are the main reasons for slowdown of our exports and aftermath effect of this has been highly visible among our export knitwear units. The recent reports reveal that the global economic downturn would be deeper and recovery would take longer than thought before and IMF assessment also reveal that the global economy is projected to contract by 1.4% in 2009 and to expand by 2.5% in 2010 only.
Even with this backdrop, India's GDP growth for 2008-09 was recorded 6.7%, next best to China's economy, however, it reflected a deceleration in relation to the average 8.8% recorded
during the period 2003-04 to 2007-08.
The spurt in inflation has become a major issue and to control inflation, RBI was taking a lot of measures and predominantly by raising of its key rates, Repo Rate, Reverse Repo Rate and Cash Reserve Ratio. The WPI inflation touched a high peak level of 12.29% in August 2008 and thereafter a sharp decline was observed
and in fact, it turned negative in June 2009, and since then the negative inflation continues (-1.54 per cent as on July 18, 2009). Considering the declining of inflation, since September 2008 onwards, RBI reduced the Repo Rate on six occasions and since 21st April 2009, it has been kept at 4.25%. The reduced Repo Rate and Cash Reserve Ratio ensured availability of ample liquidity in the banking system and has given signals to the Banks for reduction of interest rates. In spite of this, most of the Banks have not responded for reduction of their interest rates in proportion to RBI's measures and the concern is that out of 77 Banks operating in India, so for, only 7 Banks have reduced their interest rates in the region of 2.25% to 3.5% and 16 Banks have reduced their interest rates at 2%. We have been regularly requesting RBI for its intervention in the larger interest of SME export sector.