Exporters begin the 64th year of Indian Independence with prayers on their lips and hopes in their hearts, tinged with a hint of despair.
In the past year, the rupee has appreciated by about 10 per cent and prices have gone up by over 10 per cent. That has hit the competitiveness of exporters in the job- intensive segments like leather, textiles, etc. Many of them are praying for more help from the government and the commerce ministry seems willing to give more in the revised Foreign Trade Policy to be announced next Monday.
The global economic uncertainties continue, although the outlook is better than a year before. But anxieties of exporters persist, as it is difficult to say how long the slowdown will last in the developed countries. While the global situation isn’t in the government’s control, exporters pray the policy uncertainty within the country should end. For example, the uncertainty regarding continuation of income tax exemption to units in Special Economic Zones (SEZs) can end quickly.
The cause for hope is that despite infrastructure bottlenecks at home and severe competition abroad, export figures for the first quarter of this financial year show growth of 32.2 per cent over last year. Although the impressive figure shows growth over a very low previous-year base, still the continued positive rate for eight consecutive months, especially when the rest of the world is not doing well, is a confidence booster.
More, the domestic economy has not only survived the impact of recession in rich countries but posted impressive growth figures, although there are apprehensions that not enough jobs have been created. A healthy domestic economy is always a matter of comfort because it gives fallback options for exporters.
The tinge of despair stems mainly from a perception being spread that the government is not resolute enough to end the violence in Kashmir or reign in the Maoists or bridle corruption or bring down prices or make the administration more responsive or even discipline errant ministers in the Cabinet. Quite a few state governments, too, have been unwilling to take tough decisions.
However, past experience shows the nation has faced darker days with greater fortitude. Seasoned businessmen who have seen many ups and downs do not easily get discouraged. They know things will get better and will rather try to find a way out of difficulties.
The hopes of better days ahead are also bolstered by tax reforms in the offing. The finance ministry seems determined to push through a simpler Direct Tax Code, that will lead to greater efficiencies in the system. Efforts to get the Goods and Service Tax implemented by next April also seem in full swing, with the finance minister trying to work out a consensus among political parties and convergence of views among state FMs.
Public perception and moods can change fast. So, despite efforts in a section of the electronic media to blow up bad news out of proportion and sap the energies of people, the hopes remain undiminished that the entrepreneurial spirit of Indian businesses will find ways to prosper.
Email : tncr@sify.com
