Govt panel suggests steps to boost MSME exports

NEW DELHI: The Government panel has suggested fiscal and non-fiscal incentives including enhanced interest subsidy of 4 per cent to boost exports from MSME sector.

The six-member inter-ministerial committee headed by Finance Secretary R S Gujral was constituted by the Cabinet Secretary to suggest short and medium term measures to enhance exports from the Micro, Small and Medium Enterprise sector.

"The cost of export credit for MSMEs varies from 11-14 per cent. This is on the higher side compared to international standards. There is a need to lower the interest rate for MSME exporters... The Committee recommends that an additional 2 per cent interest subvention may be provided to exporters who repay on a timely basis," the report said.

The Government, meanwhile, has hiked the interest subsidy to 3 per cent from 2 per cent - still a percentage point lower than the panel's suggestion - to encourage exports.

The CAD - the difference between inflow and outgo of foreign currency - touched a historic high of 4.8 per cent of GDP in 2012-13, mainly on account of increasing imports and declining exports.

Source : dailyshippingtimes.com