Budget announces implementation of Nirvik Scheme

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News:The Finance minister has announced the NIRVIK (Niryat Rin Vikas Yojana) scheme in the Budget 2020.

Facts:

About NIRVIK Scheme:

  • Aim:To provide a) enhanced insurance cover b) reduced premium for small exporters and c) Simplified procedure for claim settlements.
  • Ministry:The scheme is being prepared by the Ministry of Commerce and Industry.

Features of the scheme:

  • Under the scheme,the insurance cover guaranteed will cover up to 90% of the principal and interest.The insurance cover will include both pre and post-shipment credit.
  • At present,the Export Credit Guarantee Corporation(ECGC) provides a credit guarantee of up to 60% loss. 

Significance of the scheme:

  • The scheme will help make Indian exports competitive and make ECGC procedures exporter friendly, benefiting MSME exporters.
  • The insurance cover is also expected to bring down the cost of credit due to capital relief, less provision requirement and liquidity due to quick settlement of claims.