Measures to boost exports soon

By Sushma Ramachandran

NEW DELHI, SEPT. 21. The Central Government is likely to announce some measures soon to give a boost to exports in view of the slump being experienced in the current fiscal. These proposals were discussed yesterday by the Commerce and Industry Minister, Mr. Murasoli Maran, during a meeting with the Finance Minister, Mr. Yashwant Sinha, who agreed that immediate steps need to be taken to sustain exports.

The issue has assumed urgency as the country is suddenly facing a negative growth in exports, a complete turnaround from the buoyant double digit growth recorded last year. The recessionary conditions are expected to deepen with the economic climate in the U.S. worsening after the terrorist attacks in New York and Washington.

The current global economic slowdown had originated in the U.S. and spread like a virus round the rest of the world. With the latest attacks and the U.S. gearing up for a conflict with terrorist forces in Afghanistan, the climate for any revival looks bleak. Even now, the airline industry in the U.S. is seeking a bail-out package to recuperate from the huge losses suffered due to closure of airports after the attacks as well as the expected decline in passenger traffic by air. This is apart from the devastation in the financial sector due to the collapse of the World Trade Center (WTC). Even international oil prices have slumped expecting a fall in demand from the U.S. leading to easy availability in the markets.

In such a scenario, the prospects of demand picking up in the U.S., one of the largest markets for Indian exports, appear remote at the moment. Exporters who were already facing cancellation of orders, as a result of the economic slowdown, are now dreading that the situation will get worse in the coming weeks.

The Commerce and Finance Ministers who discussed ``possible export promotion strategies in the context of prevailing circumstances'', according to an official release, are likely to take into this backdrop before taking any decisions. They will also take into account the fact that the rupee has weakened against the dollar thus making exports more competitive. Even so, the problem of sluggishness in demand has to be addressed urgently by providing more incentives to exporters.

The latest data has revealed that there has been a fall of nearly 2 per cent in exports in dollar terms over the period from April- July, the first four months of the current fiscal. Exports during July alone fell by 1.76 per cent. In contrast, last year exports rose by nearly 20 per cent. Even before the terrorist attacks, the dip in exports was expected to worsen in the coming months. The government thus has to react soon to these events, otherwise exports will be in dire straits by the end of the year.

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Section  : Business
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