JOIN USLack of funds may mar govt's export promotion dream
The much-awaited export promotion measures, which were due to be announced by Commerce Minister Anand Sharma, may hit a roadblock with the revenue-starved Finance Ministry not coming forward with funds.
Sharma, during the industry-government task force meeting, last week, had said that the government will announce incentives for exporters to provide them a cushion in the wake of declining shipments due to global slowdown.
Concerned over India’s exports shrinking by 5.95 per cent to $189.2 billion during the April-November period this year. The government was likely to announce the export-promotion measures on Monday.
But, according to sources in the Finance Ministry, the government battling a slower pace of revenue collection and high fiscal deficit, sees no immediate disbursal of fund for export sops. Burdened by high cost and weak disbursement of credit, rising cost of manufacturing, transaction cost and raw material availability, industry is pressing for export concessions in order to survive the slowdown.
The industry concerns have also been discussed between the Commerce and Finance Ministry officials. The Commerce Ministry has also urged the Finance Ministry to make available funds for the same. But, officials in the Finance Ministry said, there was fiscal space to heed to their demand at present. The government’s Chief Economic Advisor Raghuram Rajan has already said that the government is not in a position to extend any relief package to the industry in the wake of shrinking revenues due to lower-than-expected collections so far.
The Commerce Ministry is mulling extending the subsidised loan facility by another year to exporters as part of the package expected to help them tide over the impact of global slowdown soon.
The bulk of India’s exports of about $300 billion go to the US and Europe, which have been facing demand slowdown. Although exporters have been trying to find new markets within Asia, Africa and Latin America, the impact of slowdown in the western markets is likely to be significant.