Bungling On Exports

Even this will be an improvement on the 3.3 per cent achieved cumulatively for the April-December period, for which figures are available so far. The positive outlook is based on the expectation that, as is usually the case, the last quarter of the financial year will see a surge in exports, thus bringing up the figure for the year as a whole. However, in the last two years at least, this has not been the case. In both 1995-96 and 1996-97, the year began with a very high export growth rate which was not sustained till the end of the year. In the current year, on the other hand, the beginning has been very poor. Then as the year has progressed, the cumulative growth rate has improved to something respectable and positive. To reach a 4.5 per cent rate of growth for the whole year, exports have to grow by 8 per cent in the last three months. This is high by present standards but not impossible. It should also be noted that growth rates calculated in dollars under-state the buoyancy because the US currency has

been gaining in value. Export growth calculated in special drawing rights (SDRs) will show up near 7 or 8 per cent so far this year. But that clearly is not good enough, because the massive devaluations in other Asian countries will make the future even more rocky.

Too much need not be read into the minutia of these numbers but the underlying fact is indisputable. The country did not have a viable export strategy when the year began. Its current overall policy framework, with the emphasis on preventing the rupee from depreciating sharply, is downright hostile to exports. That is only the most obvious problem; there are others as well.

But nearly all the major political parties have harped on protecting the country from the fickleness of foreign capital and ignored the need to promote exports. Even as the premium on self-reliance has risen, it has been forgotten that the export dollar is the best dollar the country