In a major volte-face, the minister said that the RBI had its own compulsions to discontinue special interest rates on rupee export credit after the special scheme expired on March 31, 1998.

"I had a meeting with the RBI governor Bimal Jalan and he explained to me why it cannot be done," Hegde said in response to a query. The Government cannot force the RBI to take such a decision as it is an autonomous body, he added. The 20 per cent export target set for 1998-99 was high, but "high ambition is not a crime". The export performance, however, cannot be ignored considering that it was achieved in thebackdrop of the south-east Asian crisis, he said.

A strong economy like China reported negative growth, he added.

Hegde said that export growth during April-November 1998 was negative in dollar terms. A joint meeting of officials from the customs and directorate of foreign trade will soon be called to give a fresh and positive direction to the management of exports.

It is high time bureaucrats change their mindset and assume the role of facilitators, he said. "I am not in favour of devaluation to make exports competitive. Only quality and timely delivery can make exports competitive," he said responding to a query.

Hegde said that Tuesday's fluctuations in the rupee-dollar rate were normal, and that better export performance would provide stability to the rupee. He said that the value of the rupee would be market-driven and a lot would depend on the country's exports and imports, and the international situation.

Referring to the high export growth achieved in sports goods from Punjab, he said that80 per cent of it was from Jalandhar. If the Government starts a free-trade zone from Jalandhar, exports of sports goods will go up phenomenally, he added.