Exports from north going down

Although the share of the northern region in the country's engineering goods exports in 2006-07 was 28 per cent ($5,044 million), it is still behind its export share in 2003-04, when it was 30 per cent.

However, after that it came down to 26 per cent and remained the same for two successive years (2004-05, 2005-06) and finally picked up in 2006-07.

The northern region comprises Punjab, Uttar Pradesh, Haryana, Rajasthan, Delhi, Jammu & Kashmir, Himachal Pradesh and Uttaranchal.

In 2005-06, the export of engineering goods from the northern region was worth $5,291 million, and the country's engineering goods export was worth $20,340 million.

Though the in percentage terms the export was higher in 2006-07, in dollar terms it was lower because the country's export of engineering goods fell in 2006-07. But in 2006-07, the export of enginnering goods from the country declined to $18,341 million, while the region exports was to the tune of $5,044 million.

That means the exports from northern region are constantly declining and it is expected that with the strengthening of rupee and unprecedented hike in raw material prices they would further go down in 2007-08.

Also, the key sectors of Punjab, like Hand Tools, Bicycle exports and sewing machine is heading towards south. During April-September 2005, exports of hand tools was $ 80.97 million, whereas in 2006-07, it was $ 80.59 million, a marginal decline. Cycle part exports too saw a decline from $ 185 million during 2005-06 to to $ 87 in April-September 06. Similarly fasteners too saw a one per cent decline in exports in the first half of 2006-07.

Regional chairman of the Engineering Export Promotion Council (EEPC), S C Ralhan, said, "There are several reasons for Punjab's dwindling exports. The biggest is the tax sops given by neighbouring states like Himachal Pradesh, Jammu and Kashmir, making Punjab's cost of production higher by comparison. Punjab's geographical location means that goods meant for exports have to transported overland to ports. The exporter faces additional costs in freight charges. The combination of the higher production costs and such a geographical disadvantage have meant that goods from the state are much more expensive."

However, with states like Himachal Pradesh, Uttar Pradesh and Haryana also giving freight subsidy for exporters, Punjab's exporters face an unfair competition.

For example, Uttar Pradesh grants Rs 10,000 per container to exporters as freight subsidy, but exporters from Punjab have to bear the entire cost themselves, Ralhan pointed out. Besides that high electricity charges and high raw material cost is another factor for decline in exports.

He also requested the Chief Minister, Punjab, Prakash Singh Badal for the prompt VAT refund to the exporters and also to abolish VAT from all exports. He further asked to look into the freight subsidy aspect. EEPC would award the northern region entrepreneurs, who are the star performer in each category(goods) of exports today evening.