Budget 2008-09 may provide a bailout package for six labour-intensive sectors hit most by the strengthening rupee. Textiles, gems & jewellery, handloom, handicraft, marine and leather may get excise waivers and an extension of interest rate subvention which expires in March. Sources said the package is almost final, with the finance minister and the Prime Minister's Office giving the finishing touches.
Sources said that the V Krishnamurthy committee, set up by the PMO to find ways in which the domestic industry could be helped to cope with the fallout of a rising rupee, had recommended special measures for the six sectors.
“While many of the recommendations will not find place in the Union Budget, the finance ministry is likely to provide at least excise waiver and interest rate subvention for the six sectors, an official said. He added that the finance minister was in touch with the PMO on the relief measures to be announced in the Budget.
Gems and jewellery sector, which operates on very thin margins, could get a special package. Excise duty on certain manmade fibres is at 8%, while duty on leather goods is at 16%. Machines used in marine and textiles industry are in the 16% bracket and same is the case with fishing nets and fish landings. On manmade fibres, leather goods and fishing equipment too, the duty rates are expected to be reduced.