New Delhi: Faced with sagging exports and rising trade deficit, the government Wednesday raised rate of interest subsidy for exporters to 3 percent and promised to clear pending claims expeditiously, entailing an additional burden of Rs 2,000 crore to the exchequer.
"A number of steps are under way to augment exports. I have offered him (Commerce Minister Anand Sharma) full support and provided, today, additional funds of Rs 2,000 crore. This will include increasing the interest subvention from 2 percent to 3 percent on certain exports," Finance Minister P Chidambaram told reporters here.
Chidambaram said he has provided Rs 450 crore to meet the additional expenses for the remaining part of the current fiscal on account of hiking interest subsidy to 3 percent.
He also said about Rs 1,550 crore was the last year's balance which would be paid under various incentive programmes.
At present the interest subvention for exporters, which is a kind of interest subsidy, is at 2 percent.
Earlier, Sharma said all efforts would be made to clear claims of exporters.
"The rate of interest subvention from tomorrow which would be available to exporters, would be enhanced to 3 percent", Sharma said adding exercise is on to extend this benefit to more sectors.
Currently, the benefit is available to sectors like MSME, handlooms, handicraft, carpets, toys, sports goods, processed products, besides certain engineering and textiles items.
"The government is making available the required resources to clear all claims of the exporters from January 1 until now and the provisions are being made to ensure that claims of all the exporters are settled forthwith", he said.
The commerce ministry, he said, has called a meeting of Board of Trade on August 27 to consider more steps to give a boost to exports, hit by global slowdown.
India's merchandise exports have declined 1.4 percent to USD 72.46 billion in the quarter ended June 2013 (April-June 2013).