Another stimulus package for exporters?

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Bikky Khosla | 03 Nov, 2009
Although several industry sectors are showing signs of revival, Commerce and Industry Minister, Anand Sharma's statement that the government may offer more incentives for exporters came as good news - no doubt about that.

At a time when the country's exports have fallen for 11 straight months to August, sops in any form are welcome to lift the spirits of the exporters hit by recession in major overseas markets.

Going by the minister's statement, I see the engineering, textile, apparel, pharmaceutical and handicraft sectors likely to get noticed owing to the fact that they have been hit harder with flattened global demand.

Another stimulus package for these labour-intensive sectors can no doubt check the downtrend in exports and also help create jobs, which is very critical at this juncture. However, Mr Sharma will be walking a tightrope if he has to come out with another set of sops for the exporters, because the power to provide tax incentives rests with the Finance Ministry. In short, the future of another stimulus package depends on his convincing powers...to let the Finance Minister know that certain sectors still need the government to help them weather this bad phase.

I feel that of late, exporters have realized that to beat recession, they have to explore new markets, and the government's initiatives in the FTP have started paying dividends. The new markets of Latin Amercia, Africa and Pacific and the Far East have helped the country's export figures to some extent. These are big markets than what most exporters presume and the need of the hour is to expand our presence in these untapped markets and increase the market share with a long-term vision.

Moreover, India's traditional countries and the major economies will take some time to return to the same demand and consumption as was a couple of years back. Till then, unless we think differently, we will be unable to profit much.

With the Commerce Minister convening a meeting of the concerned departments on November 15 to review the impact of the previous stimulus packages and to take a decision on further sops, it will be worth the wait. If any sops come the exporters' way, it will indeed help them considerably in negating the losses that they have incurred during the slump.