Exports decline pulled down GDP growth: S C Ralhan

SEP 3, 2015: Commenting on the GDP data for the April-June, 2015 quarter where it exhibited 7 percent growth, S C Ralhan, president, FIEO said that decline in merchandise exports by 16.75 percent (contributing to about 15 percent of GDP) and service exports by 7.08 percent (with a share of about 7.5 percent in GDP) had pulled down the GDP growth by over 3 percent.

Had the exports showed even the modest growth, the GDP number for last quarter would have touched 10 percent, a double digit growth, meeting the aspiration of our people, added Ralhan.

President of FIEO said that achieving 8 percent growth in 2015-16 would be possible only if exports show an overall growth of at least 10 percent during this fiscal, which at the moment looks challenging as first four months have produced negative results. Ralhan said that interest subvention for exports are introduced immediately and transition problems relating to schemes under new Foreign Trade Policy are addressed expeditiously. All the agencies involved in exports to work in tandem to facilitate exports. Looking at the problem of exports sector, the refund of VAT, CENVAT and Duty Drawback should be done immediately at the time of shipment.

While the base effect will help in addressing exports decline in coming months, the volatility in Rupee will keep exporters on their toes though order booking position has improved marginally, observed FIEO chief.