Steps to increase credit flow
Impact
on Exports due
To
Decline in Export Credit
Government
has taken
Major
steps for MSMEs
As
per data compiled by RBI, the balance outstanding for export credit by all
Scheduled Commercial Banks (SCBs) increased from Rs 1,85,591 crore as on
31.3.2015 to Rs 2,43,890 crore as on 31.3.2018 before declining to Rs 2,26,363
crore as on 31.3.2019.
Government
has taken following major steps to increase the flow of credit to micro, small
and medium enterprises (MSME) exporters:
(i)
Raising interest equalization rate under Interest Equalisation Scheme (IES)
from 3% to 5% for MSME exports,
(ii)
Including Merchant exporters under IES for Pre and Post Shipment Rupee Export
Credit,
(iii)
facilitating export under GST by permitting Letter of Undertaking in place of
bond with no bank guarantee for exporting goods or services or both,
(iv)
Allowing merchant exporters to procure goods from domestic suppliers, for
export, with nominal GST of 0.1%,
(v)
Provisional sanction of 90% GST refund amount for exports within 7 days,
(vi)
Reducing insurance premium rates by an average of 17% for export credit.
Department
of Financial Services has informed that RBI is currently examining the priority
sector lending norms for export credit and certain enabling guidelines are
under consideration. When issued, revised guidelines are expected to release
additional Rs.350-680 billion export credit under priority sector.
RBI
has informed that it is not in favour of earmarking a part of foreign exchange
reserves for export credit.
This
information was given by the Minister of Commerce and Industry, Piyush Goyal,
in a written reply in the Rajya Sabha.
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