labels: Union budget: 2008-09
Government okays Rs500 crore interest subsidy for exporters news
21 February 2008

Mumbai: The government has approved a fresh package of Rs500 crore in interest subventions to compensate exporters hit by the rupee's appreciation against the US dollar.

The scheme provides for a two per cent relief in pre-shipment and post-shipment credit in sectors such as leather and leather products, marine products, handicrafts, textiles and carpets.

"The measures will ensure mitigation of the effect of rupee appreciation across the export sectors, make them internationally competitive and enable them achieve export targets," a government official said after the meeting of the cabinet committee on economic affairs (CCEA).

The interest subsidy, however, is subject to a floor of seven per cent - the rate applicable to the agriculture sector under the priority sector lending scheme - below which the rate subvention will not apply.

The appreciation of the rupee - which gained 15 per cent against the dollar over the past 16 months - has hit export of traditional goods like handicraft, textile and carpets most.

The move comes two days after the government extended tax sops to exporters to cover their transport and storage of goods.

The government had also earlier announced Rs300 crore relief under the interest subvention scheme for exporters. The government has so far announced various packages totalling Rs5,200 crore to help exporters.


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Government okays Rs500 crore interest subsidy for exporters