Straws in the wind
The emergence of a stable Government by the UPA has rightly
fuelled the expectations of the exporters who have been generally left to fend
for themselves. The textile and garment exporters have been particularly
feeling like being left out in the cold of fierce international garment export
business. As was pointed out repeatedly by me, year after year after year, in
The Stitch Times every time a Budget or National Foreign Trade Policy was
announced that the words "textiles" and "garments" were
virtually banned in these announcements. I personally strongly feel that this
treatment was not forced by compulsions and that happened could not be treated
as "beyond the control of the Government." To my mind, and as all of
us know, there was a steady flow of foreign money, from FIIS which had nearly
caused a balloon in so far as our foreign exchange reserves were concerned.
This did contribute in Government ignoring the sectors that supported the
foreign exchange earnings before the massive inflow of FII money.
But what is in the
offing?
An Emerging Rainbow
As I said in the beginning that one very important new
factor has emerged i.e. a comparatively stable Government without communist
strings attached thereto. The Chairperson of UPA has rather sternly warned the
new Council of Ministers to either "Perform or Perish" and that the
various ministries are busy in charting out their courses, to start with, for
100 days. The need to perform is pulpable and the people in general have huge
expectations. We now have a sauve Commerce Minister in Anand Sharma, who is
faced with the stupendous task of reviving Indian exports that have touched low
ebb with six months of continuous contraction. It is, indeed quite hopeful that
he would mean business and results which is reflected in his first press
conference, where he declared, "We shall be talking to the chambers of
industry and trade bodies and look at possibilities for more incentives. I will
be discussing with Finance Minister what more measures can be taken in the
Budget." He also assured that measures to boost exports will be
incorporated in the Foreign Trade policy, which is scheduled to be released in August,
2009. "These will include measures to reduce transaction costs," he
added.
However, an inkling of what is brewing up in the mind of the
Finance Minister was available in his first press conference. Putting forward
the broad economic agenda for the next five years, the veteran Finance Minister
Pranab Mukherjee said, "The next round of stimulus for growth would be in
the form of economic reforms and the Government has already identified the plan
of action. Sustained stimulus to growth can be harnessed by the next round of
economic reforms. We have a broad plan of action in mind." He, however,
declined to spell out details of the package.
The moot point is how much fiscal help the Finance Minister
with all his good intensions, but very severe financial constraints, can
render.
The sliding physical direction of Indian garment exports is
expected to be countered by strong policy directions of a new, comparative
stable, and no nonsense Govt. with a commitment to higher. Hopefully, we would
move forward.
Originally published in The Stitch Times; June 2009
