Skip to main content

Exporters to Receive 3% Interest Subsidy for 5 yrs

By
Falling exports likely to get a leg-up as CCEA clears Interest Equalisation Scheme on preand postshipment rupee export credit with effect from April 1
India's falling exports got a booster shot on Wednesday with the Cabinet Committee on Economic Affairs (CCEA) approving a scheme to provide cheaper credit to exporters for five years.
Prime Minister Narendra Modi-headed CCEA approved the Interest Equalisation Scheme (earlier called Interest Subvention Scheme) on preand postshipment rupee export credit with effect from April 1, 2015, for five years. The scheme will be evaluated after three years.
This is the third major announcement for exports in the last fortnight. On October 30, the government expanded support to various products under the Merchandise Exports from India Scheme (MEIS), followed by a revision of the duty drawback rates for exporters two days ago.
“The rate of interest equalisation would be 3%. The scheme would be available to all exports of MSME and 416 tariff lines,“ said an official release, adding that “the scheme will help the identified export sectors to be internationally competitive and achieve higher level of export performance“.
The scheme covers labour intensive and employment generating sectors like auto components, processed agriculturefood items, handicrafts, handloom products, fabrics and leather goods.
Though the financial implication of the proposed scheme is estimated to be Rs.2,5002,700 crore per year, the actual effect will depend on the level of exports and claims iled by exporters with the banks.
The previous 3% interest subvention scheme was available up to March 31, 2015, for sectors including apparel, carpets, handlooms, sports goods, handicrafts, toys, and some engineering products. The rate offered under the scheme in 2013-14 was 2%.
The commerce department said it has funds worth Rs.1,625 crore under the nonPlan head that would be made available to RBI during 2015-16. The restructured scheme would be funded from Plan side from 2016-17 onwards.
“This is a very good move by the government and it is reassuring that the scheme is for a five-year period. This will improve the competitiveness of our exports. All kind of fiscal support has been given by the government and the only issue that remains to be addressed is of transaction costs,“ said Ajay Sahai, director-general, Federation of Indian Export Organisations.
India's exports declined for the 11th month running in October, highlighting the stiff competition faced by the country in a weak global economy.
As per data released earlier this week, exports fell 17.5% year-on-year in October at $21.35 billion and outward shipments declined in 20 out of the 30 industries, led by iron ore.
Sluggish global demand, an overvalued rupee, declining imports from China and devaluation of the Chinese currency have deterred India's exports from growing despite the commerce department expanding export incentive schemes for various products and markets.
Exports in the first seven months of the year were about $154.2 billion. In 2014-15, India's exports had totalled $310.5 billion.
Business Standard, New Delhi, 19th Nov. 2015

Comments

Post a Comment

Popular posts from this blog

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the...
Post a Comment
Read more

SFBs should be vigilant, proactive to mitigate risks: RBI deputy guv

By
  The Reserve Bank of India’s Deputy Governor Swaminathan J on Friday instructed the directors of small finance banks (SFBs) to be vigilant and proactive in identifying emerging risks in the sector.Speaking at a conference for directors on the boards of SFBs, Swaminathan highlighted the role of governance in guiding SFBs towards sustainable growth with stability. He also emphasised the importance of sustainable business models.Additionally, he highlighted the need for strengthening cybersecurity to protect the entities against digital threats and urged for a stronger focus on financial inclusion, customer service, and grievance redressal to ensure a broader reach of banking services.Executive Directors S C Murmu, Rohit Jain, and R L K Rao, along with other senior officials representing the Supervision, Regulation, and Enforcement Departments of the RBI, also participated in the conference.   -  Business Standard  30 th  September, 2024
Post a Comment
Read more

Brigade Hotel Ventures files draft papers with Sebi for Rs 900 crore IPO

By
  Brigade Hotel Ventures Ltd, owner and developer of hotels in South India, has filed draft papers with capital markets regulator Sebi to raise Rs 900 crore through an initial public offering (IPO).The proposed IPO is entirely a fresh issue of equity shares with no Offer-for-Sale (OFS) component, according to the draft red herring prospectus (DRHP).Proceeds from the issue to the tune of Rs 481 crore will go towards payment of debt, Rs 412 crore will be allocated to the company and Rs 69 crore to its material subsidiary, SRP Prosperita Hotel Ventures Ltd.Additionally, Rs 107.52 crore will be used to purchase an undivided share of land from the Promoter, BEL, and the remaining funds will support acquisitions, other strategic initiatives, and general corporate purposes.The company may raise up to Rs 180 crore through a Pre-IPO Placement.   If the placement is undertaken, the issue size will be reduced.Brigade Hotel Ventures Ltd is a wholly-owned subsidiary of Brigade Enterprises ...
Post a Comment
Read more