New Delhi: The government has cut allocations to its key export promotions and overseas market development programmes for 2008-09 by a vast Rs 600 crore, at a time when exporters are distressed on account of global slowdown and margin erosion due to rupee appreciation. The Budget has slashed export subsidy by Rs 300 crore while abolishing interest subsidy under the programme ''Assistance for Export Promotion and Market Development''. As against the revised estimates of Rs 1,594 crore for 2007-08, the export subsidy has been reduced to Rs 1,294 crore for 2008-09. The government had given Rs 300 crore as interest subsidy to banks for the current year. Upset with the Budget proposals relating to the export sector, Commerce and Industry Minister Kamal Nath had met Prime Minister Manmohan Singh earlier this week asking fiscal and other measures for the distressed exporters. Finance Minister P Chidambaram had said in the Budget that the interest cost of sterilisation via market stabilisation bonds, estimated at Rs 8,351 crore for the whole year, was in a sense subsidy to the export sector.
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