Department of Economic Affairs (DEA) in the finance ministry did not support the proposal for increase in the interest subsidy from 3 percent to 5 percent on exports, the commerce ministry informed the Rajya Sabha today.

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 percent on pre and post shipment rupee export credit under the Interest Equalisation Scheme was sent to Expenditure Finance Committee for approval, he said.

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"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.

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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.

Replying to another question, Chaudhary said that since the announcement of 'Make in India' programme, the growth rate of manufacturing sector as reflected by Index of Industrial Production (IIP) had increased from 2.8 percent in 2015-16 to 4.4 percent in the following financial year.

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