Exports best way to restore fiscal balance, but exporters asked to wait for help
Updated: Mar 07, 2013 08:30:31pm
New Delhi, Mar 5 (KNN) A measly increase of Rs 38 crore has been provided for export subsidy for the next financial year in the budget, whereas it has hiked interest subsidy under the export promotion programme by Rs 200 crore.
The Commerce Ministry has earmarked in its budget for 2013-14 export subsidy of Rs 1,300 crore against Rs 1,262 crore (revised estimates) in 2012-13. However, interest subsidy under export promotion has been earmarked at Rs 1,200 crore against Rs 1,000 crore in the previous fiscal.
The moot point is: whether this outlay is adequate for the sector which gets 40 per cent of its contribution from the micro, small and medium enterprises (MSMEs) with large scale employment.
In his post-Budget interaction with the industry, Finance Minister P Chidambaram said, raising exports is the best way to resolve the crisis of current account deficit facing the country. But, the export sector has been asked to wait for the Foreign Trade Policy for help from the government.
In his Budget speech, Chidambaram said he and Commerce and Industry Minister Anand Sharma would sit together and finalise the measures to help the merchandise exports which have seen deceleration in the first nine months of the current financial year.
"The surest way to address Current Account Deficit (CAD) is by raising exports”, said Chidambaram.
Reeling under global slowdown, India’s merchandise exports have dropped from USD
253.79 billiontoUSD 239.68 billion for the April-January 2012-13. Imports increased from USD 406.82 billion to USD 406.85 billion.
In the first nine months the trade deficit has widened to an unsustainable level of USD 167.168 billion, exerting pressure on the CAD, which is the highest ever.
In an interaction with the Commerce Ministry today, the Federation of Indian Micro and Small, Medium Enterprises (FISME) explained how export can be competitive in the wake of depreciation of rupee.
“Rupee depreciation is a structural response due to continued fiscal deficit, current account deficit and persistently high inflation than competing economies. The answer lies in making Indian export competitive (textiles, garments; gems & jewellery, leather, light engineering& auto components and electronics) which will also provide breather from cheap imports (particularly from China)”, FISME Secretary General Anil Bhardwaj said.
The Commerce Ministry has earmarked in its budget for 2013-14 export subsidy of Rs 1,300 crore against Rs 1,262 crore (revised estimates) in 2012-13. However, interest subsidy under export promotion has been earmarked at Rs 1,200 crore against Rs 1,000 crore in the previous fiscal.
The moot point is: whether this outlay is adequate for the sector which gets 40 per cent of its contribution from the micro, small and medium enterprises (MSMEs) with large scale employment.
In his post-Budget interaction with the industry, Finance Minister P Chidambaram said, raising exports is the best way to resolve the crisis of current account deficit facing the country. But, the export sector has been asked to wait for the Foreign Trade Policy for help from the government.
In his Budget speech, Chidambaram said he and Commerce and Industry Minister Anand Sharma would sit together and finalise the measures to help the merchandise exports which have seen deceleration in the first nine months of the current financial year.
"The surest way to address Current Account Deficit (CAD) is by raising exports”, said Chidambaram.
Reeling under global slowdown, India’s merchandise exports have dropped from USD
253.79 billiontoUSD 239.68 billion for the April-January 2012-13. Imports increased from USD 406.82 billion to USD 406.85 billion.
In the first nine months the trade deficit has widened to an unsustainable level of USD 167.168 billion, exerting pressure on the CAD, which is the highest ever.
In an interaction with the Commerce Ministry today, the Federation of Indian Micro and Small, Medium Enterprises (FISME) explained how export can be competitive in the wake of depreciation of rupee.
“Rupee depreciation is a structural response due to continued fiscal deficit, current account deficit and persistently high inflation than competing economies. The answer lies in making Indian export competitive (textiles, garments; gems & jewellery, leather, light engineering& auto components and electronics) which will also provide breather from cheap imports (particularly from China)”, FISME Secretary General Anil Bhardwaj said.
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