In order revive growth in the sagging shipbuilding sector, union shipping ministry has proposed a 15 per cent subsidy for domestic shipbuilders on the cost of ocean-going vessels.
Nearly six years after the subsidy scheme was discontinued, the ministry is trying to revive it for private shipbuilders in the country.
Reports suggest that the above step is part of a list of measures being taken by the shipping ministry to help the domestic shipbuilding sector.
The shipping ministry also asked the committee of secretaries to exempt the sector from customs duties on capital items imported for shipbuilding, reports indicate.
The ministry has recommended the above measures to the cabinet committee of secretaries early this month. The subsidy scheme that ran till 2007 gave domestic shipbuilders a 30 per cent subsidy on the cost of ocean-going vessels. The ministry, however, is now seeking lower subsidy since the government is trying to reduce the growing fiscal deficit.
Soon the cabinet committee would take up these recommendations for consideration. The ministry has also sought an exemption from the 26.85 per cent customs duty the sector pays on the capital items imported for shipbuilding works. Shipbuilding companies had earlier pointed out that the subsidy was only a means to recover the high taxes that they pay.
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