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| <b>Q: What is the likelihood of the country achieving the 3 per cent growth target set for the current year?</b> |
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| We are worried on the export front. Exports have not done well during most of the current fiscal. In January, exports were reported to have grown at 18 per cent, which was later revised to 15 per cent. February and March are not good months for exports and the growth rate is usually low in these two months. Even a modest positive export growth rate for the current year would be an achievement. However, it seems more likely that the level of exports in absolute terms this fiscal, will be slightly lower than in the previous fiscal. This however is in line with the international trend. Countries across south-east asia including Singapore, Taiwan and China have suffered with the level of exports in 2001-02 being lower than in the previous year for most months. |
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| <b>Q: Why have you chosen to continue with various export promotion schemes despite reports of widespread misuse?</b> |
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| There are slippages in all sectors and there are good exports and there are those who will misuse the schemes. The CAG has pointed out misuse of a number of schemes but these are old ones. For instance, the CCS was being grossly misused, but has since been withdrawn. We will monitor the situation and take action whenever necessary. If there is misuse of any scheme on a widespread scale, it will be withdrawn. However, it was necessary to continue with the schemes in view of the dismal export situation. Not only is the domestic economy sluggish, but the global economy is also not doing too well. |
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| <b>Q: Will you continue to monitor imports of sensitive items?</b> |
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| We had set up a war room to monitor imports of items on which quantitative restrictions were removed. The monitoring will continue till it is required. We do not have a time frame for this. |
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| <b>Q: You have proposed a transport subsidy for agricultural produce in the policy. Is it WTO compliant?</b> |
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| The subsidy for transportation is permissible under the world trade organisation agreements. In fact, the total subsidy given to agriculture in OECD countries is equal to the gross domestic product of all the African nations. In India, we can give a subsidy to the tune of Rs 42,000 crore, and that is because our limitation is the availability of money. The transport subsidy for export of wheat and rice from the Food Corporation of India are meant to help clear the accumulated stocks. |
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| <b>Q: How to you propose to provide this subsidy?</b> |
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| A committee under the food ministry will decide on the modalities, however broadly it will be reimbursement of the transport cost borne by exporters. |
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| <b>Q:Industrial townships?</b> |
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| UNIDO has identified more than 350 industrial clusters and 300 rural clusters in the country. For the present we are only interested with the ones which have an export potential. For now, we have identified three industrial clusters- Thirupur, Panipat and Ludhiana. We will work in these three on an experimental basis and then pick other towns. Funds will be provided from the Market Access Initiative and from the scheme on Central Assistance to States to help upgrade facilities and to improve competitiveness of the industries located in these areas. |
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| Funds will go to an agency nominated by the state government and only if the centre is convinced that they are being spent on the right things-some of them like common facilities and technical services have been identified in the policy- will further installments be released to the states. This is quite similar to the funding pattern that has been adopted in case of the agricultural economic zones. The facilities under the EPCG scheme will be available to service providers for the production units in these townships and not to the producers directly. We will be working with UNIDO, the ministry of small scale industries and with the industry ministry on this scheme. |
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| <b>Q:You have mentioned the need to broaden the focus of the Market Access Initiative scheme. What do you envisage?</b> |
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| The primary problem we face with respect to this scheme is lack of funds. This year we have an allocation of only Rs 14.50 crore while for 2002-03, we have a budgeted allocation of Rs 42 crore which is a major hike. However, much more money is needed. The finance ministry is also quite receptive to the idea and we have been asked to draw up a blueprint of what needs to be done and how much money would be required. To get an idea of the potential scale of the scheme, consider that Washington spends $ 28 billion per year to promote American products abroad. The Market Access Programme in the United States spends $ 2.9 billion. |
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