On 8th December 2023, Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister, Shri Narendra Modi, approved the following:
i.Reservation norms for jute packaging materials for jute year 2023-24 under JPM (Jute Packaging Material) Act, 1987.
ii.Allocation of Rs.2500 crore continuation of interest Equalisation Scheme on Pre and Post shipment Rupee Export credit till 30.06.2024.
Reservation norms for jute packaging materials for jute year 2023-24 under JPM Act, 1987
The Cabinet Committee on Economic Affairs approved the reservation norm for mandatory use of jute in Packaging for jute year 2023-24(July 1, 2023–June 30, 2024).
About JPM norms
It is mandatory to pack 100% of foodgrains and 20% of sugar in jute bags.The main aim of the JPM act is to protect the interest of jute farmers, workers, and persons engaged in jute goods production. Jute is bio-degradable, renewable, and reusable fibre therefore helping in environmental protection.
- 75% of the total jute produced is used for jute sacking bags and out of that 85% is supplied to the Food Corporation of India (FCI) and State Procurement Agencies (SPAS) while the remaining is exported or sold directly.
- This will protect the interest of domestic production of raw jute and jute packaging material in India under the Aatmnirbhar Bharat.
- 65% of the total jute raw jute produced in the country in the fiscal year 2022-23 is allocated or reserved for the purpose of packaging in jute packaging material.
- The scheme will provide direct employment to 4 lakh workers and 40 lakh farmers in the jute sector,
- The jute industry plays significant role for West Bengal as well as other states namely Bihar, Odisha, Assam, Tripura, Meghalaya, Andhra Pradesh, and Telangana.
- Every year, the government purchases jute sacking bags worth approximately 12,000 crores for packing food grains.
- Average Production of Jute Sacking Bags is about 30 lakh bales (9 lakh MT)
Allocation of Rs. 2500 crore continuation of Interest Equalisation Scheme on Pre and Post shipment Rupee Export credit
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has approved an additional allocation of Rs.2500 Cr for the continuation of the Interest Equalisation Scheme till 30th June 2024. This initiative allows exporters, Ministry of Micro, Small & Medium Enterprises (MSME) manufacturer exporters, to avail the pre- and post-shipment Rupee export credit at competitive interest rates.
The scheme shall be implemented by Reserve Bank of India (RBI) through various Public and non-Public Sector banks who provide pre and post shipment credit to the exporters. The Scheme is jointly monitored by Directorate General of Foreign Trade (DGFT) and RBI.
- The current outlay of the scheme is Rs.9538 crore and the additional funding is sanctioned to bridge the funding gap for its continuation.
- Now a cap of RS.10 crore per annum has been imposed for the scheme as per IEC(Import Export Code) making it fund-limited.
Rates of interest Equalisation
| S.No. | Category of Exporters | Rate of interest Equalisation |
|---|---|---|
| 1 | Manufacturer and Merchant Exporters exporting products listed in the 410 tariff lines | 2% |
| 2 | MSME exporters of all tariff lines | 3% |
- A study on the effects of the Interest Equalisation Scheme was conducted by IIM Kashipur which found it beneficial for the exporters.
Background
- The Interest Equalization Scheme on pre and Post-shipping rupee Export Credit to eligible exporters started on 1 April 2015 for 5 years up to 31.03.2020. It has been extended several times including 1 year extension during COVID. At that time, exporters were facing increasing credit costs in their export cycles due to the stagnation of global demand and extended credit periods. Hence, to help exporters correct their pricing and improve the competitiveness of their products .
The budget allocated in the last 3 years for this scheme
| S.No. | Financial Year | Budget Allocated (in Crores) | Actual Expenditure (in Crores) |
|---|---|---|---|
| 1 | 2021-22 | 3488 | 3488 (including arrears) |
| 2 | 2022-23 | 3118 | 3118 |
| 3 | 2023-24 | 2932 | 2641.28(as on 30.11.2023) |
