RAS question
Annual cap on interest subvention per exporter?
Correct answer: (B) ₹50 lakh.
The annual interest-subvention cap for an eligible MSME exporter under the DGFT pre- and post-shipment export-credit support is Rs 50 lakh per financial year.
Explanation
The cap is not a general loan limit; it is the maximum interest-subvention benefit an eligible MSME exporter can receive in one financial year. The DGFT trade notice launching the interest-subvention support says the benefit is available on pre-shipment and post-shipment rupee export credit for Micro, Small and Medium Enterprises, and places the maximum at Rs 50 lakh per financial year. The operational guideline also requires banks to submit IEC-wise monthly reimbursement claims and says RBI must check that the IEC-specific claim does not exceed the prescribed annual ceiling. Therefore, the exam phrase "per exporter" should be read as the annual cap per IEC, not per shipment, per bank, or per loan.
Why the other options are wrong
- (A) Rs 25 lakh understates the annual ceiling because the DGFT guideline fixes the maximum subvention benefit at Rs 50 lakh per financial year.
- (C) Rs 1 crore overstates the permissible annual benefit; IEC-wise claims are to be checked against the prescribed ceiling of Rs 50 lakh.
- (D) Rs 2 crore is far above the notified cap and is not supported by the DGFT interest-subvention guideline for MSME exporters.
Concept
This tests Indian Economy scheme design: identifying the annual ceiling for interest-subvention support on export credit. It recurs because such MCQs turn on exact scheme limits, not just broad descriptions of export promotion.