Commerce and Industry Minister Anand Sharma said that, the Finance Ministry may contemplate withdrawal of stimulus to certain exporting units which have depicted vigorous growth, but a comprehensive “abrupt” removal is not desirable.
He was speaking at a FICCI function, while answering to the query as to whether the Budget contains any provision with regards to withdrawal of stimulus.
With constricting exports since October 2008, the government had extended specific concessions like interest subsidy and higher duty refunds to aid the exporters.
Prospects for ending the stimulus are being debated, as exports experienced a positive spin after 13 months, since November 2009 and also the manufacturing has become vigorous with an approximate growth of 8.9 percent for the financial year.
Planning Commission Deputy Chairman Montek Singh Ahluwalia while partaking in the discussion remarked that the stimulus measures have worked and now they should start phasing it out. He also held that the fiscal deficit in the next year will decrease in comparison to this year.
FIEO President A Sakthivel said that the sectors which have performed exceptionally well can be pulled out of the stimulus assistance so as to advance focused assistance to the sectors depicting waning or average growth.
Sharma said that though the exports have revived, the resurgence is not consistent. Sectors like engineering, leather and textile are still facing rough weather in the western markets. He also added that they are not in favour of immediate pull out of the stimulus packages.
During April to December last year India's exports declined to $117.58 billion from $147.56 billion, which is a plunge of 20.3 percent.
Fibre2fashion News Desk - India
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