Govt to intervene to push select export sectors: Sharma

Anand Sharma who is on an official visit to Germany at the Siemens Training Academy, in Berlin on May 10, 2012.

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SME Times News Bureau | 12 May, 2012
The upcoming foreign trade policy to be announced in the first week of June is likely to have sops for export sectors that need support to tide through the demand slowdown in overseas market.

"Slow down in exports growth in April in the backdrop of the economic crisis in the Euro Zone is also a worrisome development,". he said, adding, "I will be undertaking a stock-taking exercise with all Export Promotion Councils on 17th May 2012 and a meeting of the Board of Trade will be convened on 1st June 2012. After the stock taking exercise is complete, the Government will intervene in sectors which require support".

According to recently released data, India's exports growth slowed down in April, recording 3.2 percent growth to USD 24.5 billion. Some labour-intensive sectors, including gems and jewellery (-25.7%), ready-made garments (-9%), leather (3.2%), electronics(5.4%), and plastic (2.7%) saw sharp fall in overseas shipment.

Reacting on IIP data, Sharma said the slowdown, especially in manufacturing and capital goods segment, was a matter of "deep concern."

The minister urged the RBI for a differential rate of credit for manufacturing, saying there was a huge social dimension attached to the manufacturing sector as it supports millions of jobs.

Differential rate implies that the manufacturing sector should be provided credit at the interest rates lower than the market.

Industrial output, measured in terms of the Index of Industrial Production (IIP) shrank by 3.5 percent in March due to poor show of manufacturing and mining sectors, dampening hope for any early revival of economic growth.

Manufacturing sector contracted by 4.4 percent March, while mining sector shrank by 1.3 percent.

Capital goods segment, an important indicator of the future industrial activities, contracted by an alarming 21.3 percent.

The foreign trade policy for this year will be announced in the first week of June.

Sharma said he would also soon hold meeting with the government-industry task force and convey the details of the industry sentiments to Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee.