NEW DELHI: In a major relief to export oriented labour intensive sectors, still hit by weak global demand, Union Commerce and Industry Minister Anand Sharma on Wednesday announced that the government plan to extend the interest subvention of 2 per cent for one more year for handicrafts, carpets, handlooms and small and medium enterprises (SMEs).
Earlier, the government had provided interest subvention of 2 per cent in pre-shipment export credit up to March 31, 2010, in certain sectors.
Talking to reporters here on continuation of sops to export oriented units (EOUs), Mr. Sharma said, “if there are any issues, we will assess and if there are legitimate concerns which may have serious impact, we can always take it up with the Finance Minister.''
The Commerce Minister also informed that some other policy issues concerning the labour intensive units would be addressed soon. But a decision had been taken to extend the interest subvention scheme to sectors like handicrafts, carpets, handlooms and SMEs to provide support to these sectors which continue to reel under the impact of global slowdown in economic growth.
As regards exports, which have turned positive after 13 months since November 2009, Mr. Sharma said the shipments were expected to further contribute to the momentum in the last quarter of the fiscal. The budget allocation for the micro, small and medium enterprises had also been raised from Rs.1,794 crore to Rs.2,400 crore for 2010-11. This sector contributed 40 per cent of the country's exports and the additional allocation would further boost the export growth.
On the FDI policy, he said a number of steps had been taken to simplify the foreign direct investment (FDI) regime. The government also intended to make the FDI policy user-friendly by consolidating all prior regulations and guidelines into one comprehensive document, which would enhance clarity and predictability of our FDI policy to foreign investors.