Govt To Revive Export Interest Subsidy

Government officials told TOI that the commerce department has already taken up the issue of interest subsidy, which expired at the end of March, with the finance ministry and the extension is a certainty, given that a budgetary provision of over Rs 1,600 crore has already been made.

What is now being debated is the sectors that would be covered by the scheme in the new five-year policy expected to be announced at the end of September. The benefit was earlier available to sectors such as micro small and medium enterprises, handlooms, handicraft, carpets, toys, sports goods, processed products, certain engineering and textiles goods.

For exporters, the interest subsidy that was available till the end of the last financial year is a crucial area. "We are looking forward to an announcement although the big question is whether it will be prospective or retrospective. The subsidy helped increase the competitiveness of goods given that our interest rates are vey high compared to global levels," said FIEO president Rafeeque Ahmed. In all likelihood, the benefit will be made available prospectively, officials indicated.

In an interview to TOI earlier this month, commerce & industry minister Nirmala Sitharaman had said that the focus will remain on the job-creating manufacturing sectors, which have been flagged as the priority area by the government. "We are also looking at project exports in a big way because India has become a brand in many sectors whether pharmaceuticals, auto sector, biotechnology, construction and textiles," she had added.

In addition, the Directorate General of Foreign Trade which is spearheading the policy preparation is preparing a plan to rework the export promotion schemes and at least two of them — the Focus Product Scheme (FPS) and Vishesh Krishi Upaj Yojana — are expected to be merged.

Under both the schemes, the government offers transferable duty credit of 2-5% of the export value and the idea is to simplify administration of the scheme. The sources also said the coverage of the scheme is being reviewed as the dozen-odd sectors covered by the FPS are very broad and can be fine tuned to make it more focused.

Source:- indiatimes.com