EEPC pitches for restoring interest equalisation scheme

Producers of engineering goods, which constitute a quarter of India’s merchandise exports in recent years, have urged the Centre to restore an interest subvention scheme for all players and raise the benefits offered to micro, small and medium enterprises (MSMEs). Formally known as the Interest Equalisation scheme for pre and post shipment rupee credit availed by exporters, benefits under the scheme lapsed last month for all exporters, except MSMEs who were granted these sops for two more months. “Considering the rise in the repo rate from 4.4% to 6.5%, we have requested to restore the interest subvention rate to 3% for 410 tariff lines, and raise the rate to 5% for MSMEs exporting under any tariff line,” chairman of engineering exporters’ body EEPC India Arun Kumar Garodia said. EEPC, in its pre-Budget wish list, stressed that denying these benefits to merchant exporters and larger firms in these labour-intensive sectors would hurt their global competitiveness as they operate on low margins. MSMEs account for 35-40% of total engineering exports.