The Hindu : Front Page : Industry hit by rising rupee: Kamal Nath

Online edition of India's National Newspaper
Wednesday, Dec 19, 2007
ePaper

Front Page

Front Page

Industry hit by rising rupee: Kamal Nath

Ashok Dasgupta

“Government looking at steps for cushioning the impact, particularly on labour-intensive sectors”

— Photo: R.V. Moorthy

Sorting out issues: Prime Minister Manmohan Singh with Commerce Minister Kamal Nath and National Manufacturing Competitiveness Council Chairman V. Krishnamurthy at a meeting of the Prime Minister’s Council on Trade and Industry in New Delhi on Tuesday. Others in the picture are (from left) industrialists Ratan Tata, Keshub Mahindra, R.P. Goenka, N.R. Narayanamurthy, Rahul Bajaj and Mukesh Ambani.

NEW DELHI: The Prime Minister’s Council on Trade and Industry on Tuesday discussed the economic growth scenario during the current fiscal with particular focus on the adverse impact of the rising rupee on exporters and various industry segments as also the continued surge in dollar inflows in the wake of an apprehended slowdown in the United States.

The meeting, chaired by Prime Minister Manmohan Singh, deliberated on a host of other macro-economic issues such as inflation, interest rates, the domestic price situation and the global trends in fuel and food prices. It also took up the prospect of a global slowdown and its likely effect on the growth process.

Commenting on the major issues which came up at the meeting, Commerce and Industry Minister Kamal Nath said: “We are hit by a double barrel of rupee appreciation and continuous dollar inflows... It is a problem not only for exports but also the entire industry.”

Eroding margins

The more than 12 per cent appreciation of the rupee against the dollar this year eroded the margins of exporters of goods and services. The government was looking at steps for cushioning the impact, particularly on the labour-intensive sectors such as textiles, leather, sports goods and handicrafts which witnessed a slowdown in export growth during April-October.

“Some of these measures can be taken after consultation with the State governments,” he said.

Apart from the Commerce Minister, the meeting was attended by Finance Minister P. Chidambaram, Planning Commission Deputy Chairman, Montek Singh Ahluwalia, the Chairman Economic Advisory Council to Prime Minister C. Rangarajan and Industry Council members Ratan Tata, Keshub Mahindra, Mukesh Ambani, R.P. Goenka, Jamshed Godrej, N.R. Narayanamurthy, Rahul Bajaj, Anji Reddy, Sunil Mittal, Sunil Munjal and Deepak Parekh.

All the participants, while underscoring the various positive trends in the economy, expressed concern at the persisting infrastructural and policy constraints on growth. They stressed the need to expand educational and skill development opportunities to address the growing shortage of a variety of skills and qualified persons.

Thanking the industry leaders for their constructive views, the Prime Minister said the government was committed to doing whatever was necessary to ensure that the economy continued to grow at nine per cent, even in the face of a possible global slowdown.

Sustaining growth

“Our policy must be tuned [in] to sustain nine per cent growth even if world growth slows down and global food and fuel prices continue to remain under pressure. India should have the ambition and the courage to sustain the current acceleration of growth no matter what happens globally. Our domestic economy can sustain such a growth process but we will need to pursue policies that can sustain growth. While India must remain alert to trends in the global economy, we must also recognise that the world is looking at India as a new engine of growth. If our economy continues to grow despite a global slowdown, we will be able to lift millions of our people from poverty and generate employment for our youth,” Dr. Singh said.

Printer friendly page
Send this article to Friends by E-Mail

Front Page