Commerce Ministry Working on Package to Bail Out Exporters

· PMO asks Ministries to Suggest Measures to Support Respective Sectors

The government has a plan for phasing out the MEIS scheme as it is not compliant with WTO norms but it is holding on to it temporarily during the on-going crisis and a proposal to increase the incentive rates is being seriously looked at, the official said.

Extension on Export obligation period is also being considered.

Apart from examining the need to extend the interest subsidy scheme for exporters, called the ‘interest equalisation’ scheme, beyond March 31 and enhancing the rates, the Commerce Ministry is also considering an amnesty scheme for non-fulfilment of export obligation.

“There are hectic meetings going on in the Commerce Ministry to work out a suitable package to bail out exporters. It is likely to comprise higher incentives on existing schemes, extension of interest subsidy, amnesty on defaults and sops for farm goods sector,” an official aware of the development told a News Agency.

The Prime Minister’s Office has asked all Ministries and Departments to suggest measures to support their respective sectors in the current economic downturn.

“The exporters’ package being put together by the Commerce Ministry will be examined by the Finance Ministry and the PMO before it is approved. As the government’s resources are constrained because of a dip in tax collections, all expenditure is being strictly monitored and approved at the highest level,” the official said.

Exports witnessed a sharp dip of 34.57 per cent to $21.41 billion in March as orders started declining due to the global pandemic. The overall goods exports declined 4.78 per cent to $314 billion in 2019-20.

In April-May, exporters fear the situation is likely to further deteriorate following the nation-wide lockdown and a large-scale cancellation of global orders.

To continue MEIS

While the Commerce Ministry has said that the popular Merchandise Export Incentive Scheme (MEIS) will continue at least till December and may get extended beyond, the exporters’ package could include higher incentive rates under the scheme.