It is distressing that neither the commerce minister nor the finance minister are concerned that exports have fallen continuously for seven months. And if they are concerned, then why are they not taking measures to sort out the problems? Why this policy paralysis in taking decisions? Why are they allowing the situation to deteriorate? If the government feels exporters are not doing enough to maintain quality or to package their goods efficiently, why do they not take them to task?
They should make the exporters accountable. But to do nothing is to kill India’s export capability, built over years of hard work. Commerce minister Nirmala Sitharaman had in April, after an inordinate delay, announced the three per cent interest subvention for exporters. But four months later her ministry has yet to issue a notification about the same. The finance minister had even allocated Rs 1,675 crore, as against Rs 1,585 crore earlier, for the subvention, but all this remains on paper because of the notification delay.
There has been a lot of talk about de-bottlenecking but little has happened at the ground level to decongest the transport system. For instance, one exporter said there was a 20-km queue of containers waiting to exit but there is some sort of glow-slow at the JNPT off Mumbai harbour.
Similarly, ease of doing business is supposed to be in focus, but transaction costs have gone up in the last two years. According to exporters, banks have many hidden costs, like transaction charges, that have increased across the board, be it customs duty, excise or sales tax. The previous Manmohan Singh government had formed the Transaction Cost Council under the chairmanship of then minister Jyotiraditya Scindia to cut down paperwork for exporters. This had brought down costs. But under the Modi government these costs have skyrocketed, according to exporters.
Perhaps the government, or the RBI, could look into this. In the highly competitive global export market there is need for aggressive marketing. There is no doubt the government gives subsidies for marketing but, according to Leather Export Council president Rafeeque Ahmed, this quantum is inadequate. He says these costs are permitted under the WTO agreement. One feels this is justified, and if the government feels that exporters are pocketing this money then it could make them accountable and give the subsidy in tranches according to the exports accomplished. But it is time for the government, particularly the commerce minister, to act. India’s current account deficit is down only because oil and commodity prices, like those of gold, copper, etc., are down. This should not make the government complacent as complacency in this case is dangerous.
