NEW DELHi: Department of Economic Affairs (DEA) in the Finance Ministry did not support the proposal for increase in the interest subsidy from 3 per cent to 5 per cent on exports, the Commerce Ministry informed the Rajya Sabha.
The proposal to increase the interest subvention was initiated by the Ministry to make exports more competitive in the international market, Minister of State for Commerce and Industry C R Chaudhary said in a written reply.
The proposal to enhance the rate of interest subvention to 5 per cent on pre and post shipment rupee export credit under the Interest Equalisation Scheme was sent to Expenditure Finance Committee for approval, he said.
"DEA have not supported the proposal," he said, adding that it was meant to provide interest subvention so that the cost of credit to exporters is reduced and the shipments become competitive.
Interest subvention scheme is implemented by the Reserve Bank and other lenders with a view to providing benefit to exporters directly along with sanction of loans.