Export blues: Fearing a June debacle, govt swings into action.

Spooked by the possibility of exports figures for June taking a turn for the worse, coming in the wake of the measly 3.23 per cent growth in April and a sharp contraction of 4.16 per cent in May, the government has swung into action and is chalking out crisis management plans to salvage the dismal situation on the export front.

Sources told The Indian Express that commerce and industry minister Anand Sharma met senior ministry officials last week to discuss the situation and has told them to put in extra efforts to ensure that the 20 per cent growth target set for this fiscal is met. This comes amid early indications from the provisional data available for June that the exports during the month could possibly “remain flat or slightly negative”.

The officials in the department said that director general of foreign trade (DGFT) and commerce department have been asked to hold consultation meetings with key exporting states, including Maharashtra, Gujarat, Tamil Nadu, Andhra Pradesh and Karnataka, and renew the focus on the top 20 exporting cities to resolve the hurdles being faced by the exporters based there. The minister has sought a commodity-wise analytical report of export destinations of India. With specific emphasis on export sectors such as engineering, textiles, and IT along with pharmaceutical, the officials have also been asked to have “concrete actionable points and a follow-through report within two weeks” for setting up joint consultative committee, akin to the one in pharmaceutical.

The development attains important in the backdrop of current economic situation, wherein the industrial production stayed near-flat 0.1 per cent in April while the core sector grew just 2.2 per cent during the month. High cost of credit and moderation in demand, leading to a decline in investments, has hurt the Indian growth story badly.

The GDP growth in the last quarter of 2011-12 was a dismal 5.3 per cent while the overall growth for the last fiscal stood at 6.5 per cent.

India’s exports dropped 4.16 per cent to $25.68 billion in May due to sluggish demand in European countries. Imports also declined by 7.36 per cent to $41.94 billion, leaving a monthly trade deficit of $16.26 billion. The total value of exports in the first two months of the current financial year stood at $50.13 billion, down 0.69 per cent from $50.48 billion registered in the corresponding period of previous year.

Crisis management

DGFT and commerce department officials have been asked to hold meetings with key exporting states

The Government is chalking out crisis management plans amid indications from the provisional June data that exports during the month could “remain flat or slightly negative”

Source : indianexpress.com