Faced with sagging exports and rising trade deficit, the government, on Wednesday, raised the rate of interest subsidy for exporters to 3 per cent, and promised to clear pending claims expeditiously, entailing an additional burden of Rs.2,000 crore to the exchequer.
“A number of steps are under way to augment exports. I have offered him (Commerce Minister Anand Sharma) full support and provided, today, additional funds of Rs.2,000 crore. This will include increasing the interest subvention from 2 per cent to 3 per cent on certain exports,” Finance Minister P. Chidambaram told reporters here.
Mr. Chidambaram said he had provided Rs.450 crore to meet the additional expenses for the remaining part of the current fiscal on account of hiking the interest subsidy. He also said about Rs.1,550 crore was the last year’s balance, which would be paid under various incentive programmes.
At present, the interest subvention for exporters, which is a kind of interest subsidy, is at 2 per cent.
Earlier, Mr. Sharma said all efforts would be made to clear claims of exporters.
“The rate of interest subvention from tomorrow, which would be available to exporters, would be enhanced to 3 per cent,” Mr. Sharma said adding that the exercise was on to extend this benefit to more sectors.
At present, the benefit is available to sectors such as micro small and medium enterprises, handlooms, handicraft, carpets, toys, sports goods, processed products, besides certain engineering and textiles items.
“The government is making available the required resources to clear all claims of the exporters from January 1 until now and the provisions are being made to ensure that claims of all the exporters are settled forthwith”, he said.
The Commerce Ministry, he said, had called a meeting of the Board of Trade on August 27 to consider more steps to give a boost to exports, hit by global slowdown.
India’s merchandise exports have declined by 1.4 per cent to $72.46 billion in the quarter ended June 2013 (April-June, 2013).
The government is also considering raising the Plan allocation for Market Access Initiative, Market Development Assistance and Central Assistance to States for Developing Export Infrastructure and other Allied Activities scheme.