The upcoming budget could extend the scheme for pre- and post-shipment rupee export credit by five years, they said. The commerce and industry ministry has proposed an extension of the interest equalisation scheme beyond June 30, its sunset date, wherein manufacturer micro, small and medium enterprises (MSME) get 3% benefit and exporters of 410 identified tariff lines get 2% incentive. “The scheme is in place till June 30. There could be some small changes but the broad contours will remain the same,” said an official, who did not wish to be identified, adding that the finance ministry will take a final call on the proposal. The government has allocated ₹9,538 crore to the scheme since 2021-22 and an additional outlay of ₹2,500 crore was given in December last year.
Under the scheme, the benefit to access bank credit at a subsidised interest rate to individual exporters is capped at ₹10 crore per annum per import export code. The subsidy is provided by the banks and they are later reimbursed by the government for their lower interest earnings. Exporters use the scheme to lower their cost of credit which improves their competitiveness.
While industry has demanded higher incentive rates of 5% for MSMEs and 3% for the exporters of the 410 products, respectively, the benefits are unlikely to be changed, the official said.
Content Source: economictimes.indiatimes.com