Bikky Khosla | 28 Jan, 2020
to the prolonged slowdown in the current fiscal year, and according to latest
figures the sector witnessed 1.8 percent fall in overseas
shipments in December, 2019. A number of global
factors, including US-China trade war and slowdown in economies across the
globe are responsible for this fall. Additionally, domestic factors like
liquidity crisis, red tape, etc. are no less responsible. In this scenario, the
sector is now pinning hope on Budget 2020 for fiscal relief and ease of doing
It is widely viewed that focus of the
Union Budget should be on spending toward --
besides exports-- railways, defence and real estate
sectors. In addition, sector specific incentives are expected also for sectors
like NBFCs and independent
power producers and distribution companies.
But it has already become quite clear that in the view of our ballooning fiscal
deficit, the Budget may not come with many big bang announcements.
While the tight fiscal space is a
concern, as far as export is concerned, it seems a lot can be done by way of
removing the existing red tape and hurdles that exist for the sector. In terms
of 'ease of doing business', a lot more needs to be done on the ground level. Incentives
can be provided by way of cost reductions on inputs for exports. Despite the
tight fiscal situation, a way must be eked out to support the sector.
Industry bodies have put forward a
number of demands to revive health of the export sector, and the Centre must
not turn a blind eye to them. Meanwhile, in a relief to exporters, it seems the
lingering uncertainty over the MEIS Scheme will soon be over. According to a
report, there is possibility of extension of the popular
scheme, challenged by the US at the WTO beyond March 31 as the WTO Appellate
Body has not been functional since December due to US blocking of appointment
of new judges in the body.
I invite your opinions.