Govt Readies Rs 4000 Cr Bailout For Exporters - Nov 27, 2008

The commerce ministry has finally submitted its export sector bailout package after more than two months of protests and brainstorming, to the committee headed by the Prime Minister Manmohan Singh. It is believed that the package that was submitted to the PM''s apex committee on Thursday is worth Rs 4,000 crore and is loaded with fiscal incentives to ease out the export sector that is already neck-deep into loans.The bailout package includes refunding of central sales tax and terminal excise duty of about Rs 1000 crore.

The relief package also includes interest subsidies of Rs 600 crore which is basically bringing back the 4 per cent subvention that was withdrawn on September 30. The government is also looking to provide export credit guarantee in case of defaults of Rs 350 crore and a textile upgradation fund of Rs 800 crore. The project is specifically meant for the textile sector that may see five lakh job losses within five months on account of the ongoing economic crisis. The export relief package also includes recommendations to increase the market development assistance and market access initiatives for venturing into new markets to a total of Rs 400 crore. Exporters, who are suffering from the effects of the present world economic crisis, can now hope some cheer in the New Year.