The Commerce Ministry apprehends the withdrawal of fiscal incentives to exporters by the Finance Ministry, in its larger bid to fix the budgetary hole, even as the exporters are vociferously voicing not only the extension of the existing relief measures till the end of 2010 but also additional measures to cushion them against high transaction cost.
“My fear is that North block (Finance Ministry) guys are having a hard look at fixing the budgetary hole and the easy targets are exporters,” the Commerce Secretary, Mr Rahul Khullar, told reporters here while releasing the foreign trade data for the first eight months of the current fiscal to prove the point that exports in November have turned positive.
Stating that the export performance would turn positive from January 2010, Mr Khullar said that “for the 2009-10 year as a whole, we are hoping that the export performance would be better than 2007-08, when exports fetched $163 billion, but will be below the 2008-09 level of $185 billion. How much this year's exports will be below last year's would depend on how well we do in the remaining months.”
He said sectors which logged positive growth in November 2009 as compared to November 2008 include gems and jewellery at 40.4 per cent, petroleum products at 83.6 per cent, iron ore at 47.2 per cent, basic chemicals at 22.8 per cent and marine products at 27.3 per cent. He said engineering goods at 6.8 per cent, readymade garments of all textiles at 6 per cent and drugs, pharma and fine chemicals at 8.7 per cent showed modest growth.
Export performance
He said exports declined in the first seven months of the current fiscal at -35.5 per cent, -30.2 per cent, -31.9 per cent, -28.4 per cent, -19.5 per cent, -13.8 per cent and -6.6 per cent. In November 2009 export turned positive at 18.2 per cent against the corresponding month of 2008.
Asked about fluctuations in the forex markets hitting exporters, the Commerce Secretary said that there has been no extreme volatility in the last few months and the movements in currency rates remain manageable by the exporters.
When contacted, the President of the Federation of Indian Export Organisation (FIEO), Mr A. Sakthivel, told Business Line that most of the manufacturing segments with high labour intensity export production remain affected by slow growth and that the existing incentives need to be continued till the end of 2010.
He further demanded additional allocations under Market Development Assistance and Market Access Initiatives to the exporters to undertake unexplored areas, to cushion the shrinkage of space in the traditional destinations.
Source : Business Line