2% interest subsidy for exports extended
for one more year
PTI NEW
DELHI, December 27, 2012
The HinduCommerce and Industry Minister Anand Sharma
with Director-General of Foreign Trade Anup K. Pujari addressing a press
conference in New Delhi on Wednesday. Photo: R. V. Moorthy
TOPICS
Shipments to the U.S., EU, Asian markets will qualify for
additional sops
Faced
with a widening trade deficit, the Central Government on Wednesday announced a
slew of incentives to reverse the decline in exports, which will fall short of
the $360 billion target set for the current fiscal.
The 2
per cent interest subsidy scheme, which was to end on March 2013, has been
extended for one more year.
In
addition to this, more sectors have been covered under the scheme, with
engineering exporters being the major beneficiaries.
Merchandise
shipments to the U.S., European Union and the Asian markets will qualify for
additional sops. Exporters are facing a demand slowdown in these markets.
Unveiling
these incentives , Commerce and Industry Minister Anand Sharma said, “With
these measures, we should be able to give a push to our exports in the last
quarter of this financial year. The objective is to stabilise the situation and
try and move from the negative territory to positive”.
Widening trade gap
He also
expressed hope that with the help of these steps, exporters would be able to
ship more and help the country reduce the widening trade gap, which touched
$175.5 billion between January-November.
Rising
trade deficit has been cited by global rating agencies such as S&P as a key
area of concern for the Indian economy.
While
exporters have welcomed the sops extended by the government, the minister did
not quantify the total benefits which would accrue to the sector.
Exports
during April-November this year contracted by 5.95 per cent to $189.2 billion.
Merchandise exports are in the negative zone since May this year.
On the
$360 billion exports target for this fiscal, he said: “Given the global
slowdown and the contraction at some of the major destinations of India’s
exports, we are finding it difficult to meet the target.”
Global slowdown
Mr.
Sharma said that India’s exports should be viewed in the backdrop of the global
slowdown, particularly the developments in Europe. As part of the incentive
package, the government announced the introduction of a pilot scheme of 2 per
cent interest subvention for project exports through EXIM Bank for countries of
SAARC region, Africa and Myanmar.
“This
scheme will be operational immediately for a combined worth of $500 million to
begin with,” Mr. Sharma said.
The
objective of the scheme is to boost exports to these countries by providing
long-term concessional credit through EXIM Bank as co-financing in
infrastructure sectors such as housing, irrigation, road projects and renewable
energy.
Besides,
a decision has been taken to grant incentive on incremental exports that would
be made during January-March 2013 over the base period January-March 2012.
These
steps would help in “bringing down the rising trade deficit and keep it at
least in percentage terms as it was in 2011,” Mr. Sharma said. He said that
sectors such as agriculture managed healthy exports growth.
Mr.
Sharma said that rising trade deficit had direct bearing on the current account
deficit (CAD) and the domestic currency.
Exporters
body Federation of Indian Export Organisations (FIEO) said the extension of
interest subvention scheme for one more year much before its expiry shows the
pro-active approach of government which will provide stability. “The interest
subvention extended to certain sub-segments of engineering sector would add to
the competitiveness of engineering exports,” FIEO President M. Rafeeque Ahmed
said.
Sharing
similar views, Engineering Export Promotion Council Chairman Aman Chadha said
reduction in the cost of credit would enthuse engineering exporters to be more
aggressive in their export strategy.
http://www.thehindu.com/business/Economy/2-interest-subsidy-for-exports-extended-for-one-more-year/article4242010.ece
No comments:
Post a Comment