This forms part of the twin action plan drawn up by the government to `revitalise' the country's exports hit by the sharp fall in the growth of world output as well as trade during 1998 and the forecast of the world economy stagnating during 1999.

The other measure announced by finance minister Yashwant Sinha relates to the constitution of a high-powered committee headed by the revenue secretary to go into the problem of transaction costs incurred by exporters arising from licensing, tax procedures and the banking system. The committee had been asked to make concrete recommendations within three months.

There is, however, a change in the scheme of pre-shipment creditand post-shipment credit designated in rupees. The interest on such credit stands reduced from 11 to nine per cent till the end of the current financial year, according to a recent RBI announcement.

Though the scheme of export credit in foreign currency has been in vogue for a few years now, the exporting community has not been able to avail of it because of procedural problems. The interest on such credit is at LIBOR rates plus 2.5 per cent.

The period April-December 1998 saw the country's exports decelerating by 2.88 per cent compared with the previous corresponding period. The rate of deceleration, however, came down from 3.81 per cent during the period ending November 1998 of the current fiscal.

The finance minister also said that to make inflows of foreign direct investment hassle-free, the government had decided to expand the list of automatic approvals covering important industrial and services sectors.The expanded list would be announced separately by industry minister Sikander Bakht. HenceforthForeign Investment Promotion Board will give its clearance in 30 days.

Referring to complaints about slow implementation of FDI approvals, the government had decided to create a Foreign Investment Implementation Authority within the industry which may also include representatives of state governments.

Sinha also said that the facility of automatic approval for investment up to 100 per cent by NRIs/OBCs would be extended to all items, except those which attracted notified FDI equity caps, or compulsory licensing or public sector reservation under the industrial policy or were reserved for the small-scale sector.