Re-hit exporters get Rs 1,400-cr package

The government on Thursday doled out a Rs 1,400-crore-a-year relief package to exporters, hit by a sharp appreciation of the rupee. In the last four months alone, the domestic currency has appreciated 10% against the US dollar. The package includes interest rate relief, adjustment of duty drawback rates and reimbursement of export claims.

The finance ministry announced revised rates of duty drawback for the fiscal, effective April 1, 2007. “The drawback rates have undergone significant changes in line with changes in the price of inputs and duties. The rates have been increased for nearly all products,” finance secretary D Subbarao said.

Textiles, stainless steel, leather and bicycle parts are some of the goods that have seen drawback rates increased. Due to requests from exporters, some additional lines have also been introduced in the drawback schedule on some labour intensive items like leather-cum-synthetics, textiles, footwear and electrical apparatus.

Drawback rates have, however, been reduced in a few cases like primary steel and dyes & chemicals, due to a reduction of duty on inputs. The reduced rates will come into effect prospectively, when the notification is issued, revenue secretary PV Bhide said.

The finance ministry also announced lower interest rates for exporters in the textile, readymade garment, leather export, handicraft, engineering products, processed agriculture products, marine products, sports goods and toys sectors, as well as all SME sectors.

Banks will now charge an interest rate not exceeding BPLR minus 4.5% on pre-shipment credit up to 180 days and post-shipment credit up to 90 days on the outstanding amount for the period between April 1 to December 31 this fiscal, financial sector secretary Vinod Rai said.

At present, banks charge an interest rate not exceeding BPLR minus 2.5% on these two kinds of credit. The government will provide the requisite interest subvention of 2% to commercial banks through Reserve Bank of India. RBI will shortly issue a notification to this effect.

The government also announced a relaxation from monthly and quarterly ceilings of expenditure for deemed export benefits to enable the commerce ministry to meet the pending reimbursement claims. Except the revised drawback rates, all other measures are temporary in nature to bail out exporters.

SOURCE : http://www.financialexpress.com