In a move that could bring cheer to the country’s embattled exporters, the government is planning a lower the interest regime for traders.
The scheme, which is expected to be taken up by the Cabinet Committee on Economic Affairs (CCEA) shortly, would make loans available to exporters at rates much lower than the prevailing borrowing rates.
Commercial banks would be provided a subvention — a subsidy given by the banks directly to banks to make up for the difference between the loans extended by the bank to exporter and the current rates of interest.
Officials familiar with the development said CCEA is likely to take up the proposal for grant of up to two per cent subvention.
India’s exports contracted for the third successive month plunging by 1.1 per cent in December.
In recent months the government has taken a slew of fiscal measures, including sharp cuts in excise duties and increased plan spending, to help the economy tide over the ripple of a recession in the world’s developed countries.