FinMin rules out interest subsidy extension to exporters

NEW DELHI: Finance Ministry has ruled out extension of four per cent interest subsidy to exporters beyond September 30, on the ground that there is no case for such a facility after rupee has started depreciating.

"Finance Minister P Chidambaram informed an exporters' delegation that the interest subsidy was announced last year in the wake of appreciation of rupee. Since currency depreciation has again improved exporters' margins, there is no case for such a sop," an industry official said.

A delegation comprising Confederation of Indian Textile Industry and Apparel Export Promotion Council met Finance Minister on Tuesday with a plea to continue the export incentives.

The delegation also wanted the Centre to refund the state-level levies like market fee and octroi, paid by the exporters. Industry sources, however, said the Finance Minister rejected the demand citing constitutional constraints.

The textile industry was also disappointed with a negative response from the Finance Ministry on their demand to raise duty refunds under different drawback schemes.

Textile industry has claimed that it is facing tough competition from Vietnam, Bangladesh in the global market due to rise in input costs, especially spurt in prices of cotton and plant machinery.

Seeking extension of financial package to the exporters, Federation of Indian Export Organisations (FIEO) President Ganesh Gupta said, "Share of manufactured items in country's exports has declined to 64 per cent in 2007-08, compared to 67 per cent in previous year."

He appealed to the government to extend the package till the end of financial year failing which employment would be impacted in exports sector.