A worried government on Wednesday announced a set of measures including the extension of a subsidised bank loan scheme for embattled exporters struggling to stay afloat amid shrinking world demand.
Under the subsidised interest rate scheme, specified exporters can now avail bank loans at a cheaper rate. The government pays banks directly bearing the cost of the loan by two percentage points to ensure that lending institutions do not have bear the additional burden of providing cheaper credit.
The scheme, which was to end on March 2013, has been extended for one more year.
Besides, more sectors have been covered under the scheme with engineering exporters being the major beneficiaries.
Besides, merchandise shipments to the US, European Union and Asian markets will qualify for additional sops.
“With these measures, we should be able to give a push to our exports in the last quarter of this financial year,” commerce and industry minister Anand Sharma said. “The objective is to stabilise the situation and try and move from the negative territory to positive.”
India’s exports during April-November 2012 stood at $189.2 billion, registering a decline of (-)5.9% against a year ago.
Poor shipment orders have meant that exporters haven’t been able reap the advantage of a weakening rupee, which has slid to a record low. A persistently weak rupee has made imports costlier, widening the trade deficit to $175.5 billion — a worrying sign for an economy already slowing.
The $360-billion export target for 2012-13 now appears increasingly unlikely to achieve.
“Given the global slowdown and the contraction at some of the major destinations of India’s exports, we are finding it difficult to meet the target,” said Sharma.