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Industry's revival, export momentum must for growth
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Bikky Khosla | 15 Apr, 2014
The International Monetary Fund has pegged India's economic growth for 2014 at 5.4 percent. This projection is done by "assuming that government efforts to revive investment growth succeed and export growth strengthens after the recent rupee depreciation". However, it has also cautioned that there is an urgent need to push investment by means of structural reforms and exports by removing supply bottlenecks. Last week's official data on industrial output and exports also highlights the same fact.
The February IIP reading, weakest in nine months, shows a 1.9 percent drop in industrial output, well below the expectations of a 0.9 percent increase. This downfall was led by a sharp 3.7 percent drop in manufacturing output. If we add to this dismal data the recent CSO forecast of overall 0.2 percent contraction in manufacturing in the last fiscal, it is not difficult to see how high inflation, infrastructure problems and delayed policy reforms have increasingly taken a toll on investor confidence.
Exports have taken a back seat too. We have missed the last fiscal's $325 billion target, despite achieving a 3.98 percent growth to $312.35 billion from the previous year's $300.40 billion. Most importantly, figures of the last two months are very discouraging, with exports falling by 3.67 percent in February and 3.15 percent in March. If preventive measures are not taken now then our exports could be in more danger in the coming months. I hope the new government, as soon as it is formed next month, will give urgent attention in this direction.
Meanwhile, it has been reported that the new foreign trade policy is on the anvil and the exporter community is expecting some friendly measures. According to export association FIEO, the focus should be on services exports, e-commerce, hi-technology products, merchanting trade, branded exports and effective co-ordination with states to push exports. CII adds that market diversification should be pushed further. These suggestions sound good, but here I would like to invite views of our readers on what more they want from the upcoming FTP.
During the last fiscal, some adverse conditions were reversed successfully, with the most striking breakthrough achieved against current account deficit. In addition, fiscal deficit was also contained -- though some compromises had to be made -- to a great extent. But when it comes to reviving the industrial activities, we failed miserably; neither much was done to make the best of the positive momentum exports gained for several months. If they have to be revived this fiscal year, a lot remains to be done. It is the next government that will have to take this responsibility.
I invite your feedback.
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Manufacturing industry exports downfall
Satish / SWASTIK FREIGHT SOLUTIONS., BANGALORE | Wed Apr 16 16:15:09 2014
Serious challenge to new government is INR currency fluctuation & boosting small time exporter manufacturers also the curtailing proves of daily essential goods. These are major task for the new government. If this is managed properly then
This will never happen unless . . .
Gaurang Shah | Wed Apr 16 06:26:27 2014
Industrial and business export revival is not possible.. it will continue falling..
unless
government mechanism , attitude change to positive including all the officers towards genuine exporter.
This will never happen.....
Do they have the WILL
Dharmarajan | Wed Apr 16 06:10:04 2014
The key to find a practical solution to the above issue is the stability in the Political and administrative system. Policies that are radical and pragmatic are to be framed in consultation with State governments. Unless the Center gets the sincere co-operation of the states, the road will be very difficult. International trade is a joint initiative. Mega clusters have to be created at strategic places near the ports and source of raw materials. Export production has to be made under exclusive infrastructures with focus on employment, value addition, quality and quick transportation. FTA negotiations with neighbors, trade blocs have to be aggressively made with adequate reciprocal initiatives to boost the share of India in these markets. The government departments have to strictly mandated with generous budgetary support to be pro industry rather than as a regulatory / monitoring agency. Government officials especially those who are ITS, IFS have to be specifically trained and encourage to gather business intelligence and pass on them to the industry for collective benefit. There is no dearth of ideas, but what is needed is the true will by setting up stiff targets with stable policy and tax regime to back up. Rest will be taken care of by the industry which has abundant supply of manpower with skills to match the world standards. Whoever forms the new government in June knows what to do, but do they have the WILL ???.
Downfall of export segment
Bodhisatva Kastooriya | Wed Apr 16 04:24:05 2014
Downfall in Indian production counter has fetched the downfall in export field simultaneously weak Re./ $ ratio suffered a lot to this segment.
Industry's revival . . .
aditya k sonthalia | Tue Apr 15 15:01:44 2014
At this period of time with the elections being held there is very little or nothing is going to be done so its pointless hoping / dreaming of any positive action. The earliest anything can happen is not before July - August till the new govt. takes over . Its content shall solely depend upon the level of majority achieved.Till then just relax waiting for something good.
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