Government to announce incentives for some sectors today
The government today said exports rose for the second successive month in December. The statement came a day before the government unveils a package of incentives for exporters in sectors that continue to face pressure.
Commerce and Industry Minister Anand Sharma told reporters on the sidelines of the Bancon conference that exports from India were estimated at $14.6 billion (around Rs 66,035 crore) in December 2009, which was 9.4 per cent higher than the level in November. The minister said there was an increase on a year-on-year basis, too, but he did not disclose the extent of the rise.
Sharma said the growth in December was driven by sectors such as pharmaceuticals, engineering and auto components, while leather, handicrafts and apparel continued to be affected by the lower demand in the developed markets.
In November 2009, the 13-month trend of falling exports was reversed, with the country’s merchandise exports registering 18 per cent growth, at $13.2 billion, compared with $11.16 billion in the same month a year ago. However, exports during April-November 2009 were estimated to have declined by 22.3 per cent to $104.25 billion from the $134.2 billion in the corresponding period in 2008.
Maintaining that only Finance Minister Pranab Mukherjee would decide on the withdrawal of the stimulus measures, Sharma said: “We have to be cautious in our approach. The withdrawal should not be abrupt, as some sectors will still need help.”
Though the minister did not list the sectors that could get more sops tomorrow, when he unveils a special package, he said the stimulus had helped the export sector improve its performance. “We are finalising the sectors that need help…. Through the incentives to the export-oriented sectors, we were able to check the sharp fall. In the third quarter (October-December) of 2009-10, exports have come back into the positive territory and, in the fourth quarter, it will be strengthened,” he added.
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The government had initiated a sectoral review in November to study the impact of stimulus on exporters. It was observed that petroleum products, engineering goods, drugs and pharma and gems and jewellery had seen an improvement.
Asked about the treatment of lenders like ICICI Bank and HDFC Bank as foreign companies, since foreign investors held majority stake in these entities, Sharma said the government was in the process of consulting various stakeholders before putting in place a single document that covered all the over 100 press notes and foreign direct investment (FDI) rules.
The Department of Industrial Policy and Promotion, the nodal body for FDI policy, had floated a discussion paper and consultations are due to be completed by the end of the month. Sharma said the unified document, which would ensure simplification, would be in place by the end of March.