New Delhi, Feb 22: In order to give a boost to the rupee-hit exporter community, the government today decided to extend the interest subvention scheme for exporters for 2008-09.

The Cabinet Committee on Economic Affairs (CCEA) also approved Rs 500 crore package on this account for the next financial year.

The Rs 500 crore package is over and above Rs 300 crore interest subvention to be provided this year.

The current interest rate subvention facility was to expire by the end of March.

Under the scheme, exporters are given 2% relief in pre-shipment and post-shipment credit in nine sectors including leather and leather products, marine products, handicrafts, textiles and carpets.

The interest subvention is subject to the condition that rates will not fall below 7%, the rate applicable to the agriculture sector under priority sector lending scheme.

“The measures will ensure mitigation of the effect of rupee appreciation across the export sectors, make them internationally competitive and will also enable them achieve export targets,” said a government spokesperson said after the meeting of the CCEA here.

This would provide immediate relief to the exporters by way of providing interest subvention to mitigate hardships on account of unanticipated and steep rupee appreciation, said an official.