In order to provide a boost to manufacturing sector, the Department of Industrial Policy and Promotion (DIPP) is working on a proposal for granting interest subsidy to the sector. However, the finance ministry will take final call to extend interest subvention.
The department working under the Ministry of Commerce and Industry, Government of India, which is considering an interest subvention of 3-4%, opines that the benefits should be provided for manufacturers’ working capital requirements.
Further, the ministry’s plan comes on the heels of dismal industrial output data, which slowed down sharply to 0.6% in August, mainly on account of contraction in manufacturing and mining. The manufacturing sector, which occupies over 75% of the weightage in the index, contracted by 0.1% in August as against an expansion of 2.4% in the year-ago period.
