The Cabinet Committee on Economic Affairs (CCEA), at its meeting chaired by Prime Minister Narendra Modi, on Wednesday approved the Interest Equalisation Scheme on pre and post shipment rupee export credit for five years, starting April 1, 2015.The interest equalisation will be three percent and is available for all exports by micro, small and medium enterprises (MSME) and 416 tariff lines, a CCEA statement said.The scheme, earlier called Interest Subvention Scheme, is not available for merchant exporters.According to the government, the new scheme will be evaluated after three years by the Indian Institute of Management (IIM) commissioned by the Department of Commerce.
While the operational instructions will be issued by the Reserve Bank of India (RBI), the financial implication of the scheme is estimated between Rs.2,500-Rs.2,700 crore per year.However, the actual financial implication would depend on the level of exports and the claims filed by the exporters with the banks.The scheme will help the identified export sectors to be internationally competitive and achieve higher level of export performance.The scheme covers mostly labour intensive and employment generating sectors.