Press Trust of India
New Delhi, Nov 18: The government Wednesday announced a slew of measures in order to revive growth which is facing headwinds from internal and external fronts in the recent time. Concerned over continuous decline in exports, government announced 3 per cent interest subsidy scheme for exporters which will have a financial implication of about Rs 2,700 crore. The decision to help boost overseas shipments was taken at a meeting of Cabinet Committee on Economic Affairs headed by Prime Minister Narendra Modi.
The CCEA has given its approval for “Interest Equalisation Scheme (earlier called Interest Subvention Scheme) on Pre and Post Shipment Rupee Export Credit with effect from 1st April, 2015 for five years”, an official statement said. The rate of interest equalisation would be 3 per cent, it said, adding that it will be evaluated after three years. Financial implication of the proposed scheme is estimated to be in the range of Rs 2,500 crore to Rs 2,700 crore per year, it said. However, it added that the actual implication would depend on the level of exports and the claims filed by the exporters with the banks. Funds worth Rs 1,625 crore in the non-plan head of account are available under Demand of Grants for 2015-2016 and would be made available to the Reserve Bank, it said.
The scheme would be available to all exports of Micro, Small and Medium Enterprises (MSME) and 416 tariff lines. But it would not be available to merchant exporters. “We believe that this will give a big boost to exports particularly for the MSME sector, handicraft, agri-products and food processing,” Power Minister Piyush Goyal said after the Cabinet meeting. He said the previous government had discontinued the interest subvention scheme, which has made the country’s exports uncompetitive. Under the scheme, exporters get loans at affordable rates, which help them ship more goods to foreign markets. India’s exports remained in the negative territory for the 11th month in a row in October, registering a dip of 17.53 per cent to $21.35 billion due to a demand slowdown, although trade deficit showed some improvement.
Talking about overall export performance, Goyal said India’s performance is noteworthy given the global situation. “India’s net performance on the export front, when compared to the global scenario, where almost all countries has seen a drastic fall in exports both in volume and value, has been particularly noteworthy for which we compliment small business and industry,” he said. Sectors such as jute, spices and coffee exports are registering healthy growth rates, he said. In the global recessionary trends, India’s exports have withstood the ground, he added.
