Exporters unhappy with extension of interest subvention

Indian garment exporters are not happy with the government’s

 decision to extend the rupee credit interest subvention scheme up to March 31, 2012 for handloom, handicraft, carpet and small and medium enterprise (SME) sectors. They feel that excluding garment and knitwear sectors from the scheme will benefit only 40 per cent of the industry. Under the rupee export credit interest subvention scheme operated by Reserve Bank of India (RBI), the government provides two percentage points interest subvention per annum to all scheduled commercial banks, for rupee export credit to specified categories of exporters. Out of the total requirement of Rs 38.92 billion towards interest subvention for the period up to March 2011 projected by RBI, only Rs 16.54 billion has been released by the RBI so far.

From the balance Rs 22.38 billion, the CCEA has given its approval to the Department of Commerce for release of Rs 9.96 billion. This leaves Rs 12.5 billion for which the Centre gave its approval last month along with approval for additional funds of Rs 8 billion needed owing to the government extending the scheme from April 1, 2011 to March 31, 2012.