Even as exporters demand that the stimulus announced for them during the global financial crisis be continued, Finance Minister Pranab Mukherjee on Tuesday asked them to fight their own battle and stop expecting incentives from the government.
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“The government can only play its part. Ultimately, exporters will have to compete and fight their own battle in the overseas markets,” Mukherjee said, adding, “they have to stop looking towards the government for sops”.
The finance minister’s comments come in the wake of many exporters asking that incentives announced in previous budgets be continued this year as well. These incentives include interest subvention of two per cent on credit for exports.
Unveiling a report listing measures for cutting export transaction costs, the finance minister said exporters must innovate and become more productive. Mukherjee, however, expressed optimism that India would be able to achieve the $200-billion export target this financial year. Overseas shipments touched $164.7 billion during April-December 2010-11, and according to commerce ministry estimates, they may well touch $215-220 billion.
Meanwhile, addressing exporters and industry heads at the same function, Commerce and Industry Minister Anand Sharma exuded confidence that the contraction in industrial growth in November would be arrested in the coming months. “Yes, growth had contracted in November, but I don’t foresee a trend of negative Index of Industrial Production in 2010-2011, as usually, December, January, February and March are months of good industrial production in the country,” Sharma said. Industrial growth plunged to an 18-month low of 2.7 per cent in November.
Sharma added that liquidity shortage with industries, though serious, will not hurt manufacturing. “We have raised the issue of poor liquidity with the finance ministry and I’m sure they would look into it,” the minister said.
Minister of State for Commerce and Industry, Jyotiraditya Scindia, while talking about the impact of poor liquidity on India’s export growth in 2010-2011, said foreign trade will only be marginally impacted by the rise in interest rates after RBI tightened its monetary stance last month. “On a year-on-year basis, our exports are almost 23 per cent more than last year, and we are confident of reaching the target of $200 billion exports in 2010-2011,” he said.
