Commerce secretary GK Pillai, talks about a range of issues, including the effectiveness and limitations of such packages, and how the next
GK Pillai
fiscal could play out for Indian business.
How effective are the stimulus packages announced by the government so far?
We have done whatever we can in the overall financial situation. You could say one could have always done more, but you have to keep a perspective of the implications on other sectors as well as the financial implication of the total stimulus package.
However, one or two decisions could have been taken earlier as the government took time in differentiating between sub-sectors which were facing problems.
Is there a need for another package when the new government comes in?
It will depend on what we basically see taking place at that time. We will do some fiscal year-end stocktaking, and look at trade figures of April and possibly a bit of May.
We will also look at the global forecast and how stimulus packages in other countries—be it the EU, the US or China—are playing out.
Your take on the next few months in terms of export growth and job losses in the export sector...
I think whatever job losses are to take place will happen till April, because by then India’s exports would have stabilised.
We are looking at exports worth $160-170 billion this fiscal, and at least $170 billion the next year. So, after April, exporters, who now have a leaner workforce, will try to consolidate and take in more people. However, here I am assuming that things across the world are moving as they are and not getting worse.
How long do you expect the downturn to last?
In India, I expect our bottoming-out to happen by March-April while things will bottom out in the rest of the world by June, stay that way for the next six months and then pick up again.
Why do you think India is better off than the US or the EU?
We have a growing economy, a young population and robust savings. While our saving rates are still high, the American savings rate is in the negative territory. When people will save, there will be demand and the economy is bound to pick up.
For instance, in the area of housing, the demand has completely been wiped off in several countries, including the US, but in India there is still demand for houses. Because of the downturn, people may be going in for two-bedroom houses instead of three-bedroom ones, but they are still buying.
Source : The Economic Times