Government looks to cut export subsidies, boost infra, credit

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The government is looking to reduce the dependence of exporters on subsidies and instead of looking at ways to boost the flow of credit and enhance insurance while boosting infrastructure. The issue is expected to be flagged by commerce and industry minister Piyush Goyal during a meeting with states on Thursday, where a combined strategy to combat the export slowdown will be discussed, sources told TOI. The better performing states may be rewarded with railway connectivity and other benefits as the Centre seeks to leverage its relationship with the states in boosting exports, which have underperformed for the last few years and impacted the overall manufacturing sector. The general view in the government is that industry and exporters have for long survived on subsidies and done little to focus on improving competitiveness.

While they cite the cost of capital and poor logistics as factors inhibiting their competitiveness in the international markets, the government is looking to address the often-repeated concerns. Later this week, Goyal is expected to meet officials from RBI, department from financial services, Export Credit Guarantee Corporation, and leading banks to discuss ways to improve export credit insurance. During his stint as interim finance minister last year, Goyal had sought to strengthen ECGC through a Rs 2,000 crore equity support, apart from providing another Rs 1,000 crore to National Export Insurance Account Trust (NEIA) to promote project exports.

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