New Delhi: The finance ministry could consider the with-drawal of stimulus to those exporting sectors which have shown robust growth, but an across-the-board “abrupt” pullout is not desirable, commerce & industry minister Anand Sharma said on Monday.
“We can consider (the withdrawal of stimulus) in those sectors which have moved into a very robust growth level,” Sharma said when asked whether there is a case for stimulus withdrawal in the Budget.
After exports started contracting from October 2008, the government had announced certain sops like interest subsidy and higher duty refunds to help exporters.
With exports turning positive after 13 months from November 2009 and manufacturing too, showing signs of progress, with an estimated growth of 8.9% for the fiscal, the possibility of stimulus withdrawal is being debated.
Planning Commission deputy chairman Montek Singh Ahluwalia, too, joined the debate. “... stimulus has succeeded and we should begin to phase it down. Fiscal deficit next year would be lower than that of this year,” Ahluwalia said.
The Federation of Indian Export Organisations (FIEO) too, is not opposed to the withdrawal of benefits to those sectors which are now doing well. These sectors include gems & jewellery and pharmaceuticals.
“The sectors which have done exceedingly well can be taken out of the stimulus bracket so that those still showing decline or moderate growth can be given focused assistance,” FIEO president A Sakthivel said. Sharma added that while exports have recovered, the revival is not uniform.
Sectors like engineering, leather and textiles are still treading tough terrains in the western markets. “..we are not for an abrupt withdrawl (of stimulus packages),” Sharma told reporters at a Ficci function. He added that finance minister Pranab Mukherjee was appreciative of the problems of exporters.
“I have met the finance minister. I have discussed with him...it is my understanding that he is appreciative of the concerns of industry,” he added.
India’s exports in the period between April and December 2009-10 dropped by 20.3% to $117.58 billion from $147.56 billion.
Source : Financial Express