Merchandise exports are down by only 5% year-on-year so far in August, and the outbound shipments of core products (excluding oil and gems and jewellery) have, in fact, grown by 10% so far this month, suggesting the worst is well behind us, commerce and industry minister Piyush Goyal said on Saturday.
If the momentum improves in the coming days, it could be the first time since February that exports will grow in a month. Speaking at a CII event, Goyal said the fall in export in July also narrowed to just about 9% from a year before.
Exports had witnessed a record 60% crash in April following a Covid-induced nationwide lockdown, although the contraction narrowed to 37% in May and 12% in June, as the shutdown curbs were lifted last month.
Goyal, who also holds the railways portfolio, said, over the past 11 days, freight trains have doubled their speed and moved larger volumes of goods. The average speed of such trains is 46 km per hour, against just 23 km a year before.
This has enabled the railways to move 4% more goods, year-on-year, in the past 11 days.
While highlighting the lofty goals of the Atmanirbhar Bharat initiative and the role of the government as an enabler of sound business environment, Goyal asked industry to stop relying on ‘crutches of subsidies’. Instead, it should come out with its own solutions to correct what they think is wrong, based on their own strength. That would mean industry has to try to improve competitiveness and self-reliance.
Goyal’s emphasis on industry’s self-reliance comes at a time when he is in talks with the finance ministry for an ‘early resolution’ of the issue of a massive cut in benefits under the Merchandise Export From India scheme (MEIS) by the revenue department.
The revenue department has capped the outlay for the MEIS at just Rs 9,000 crore for the April-December period, which means exporters may be deprived of over two-thirds of the benefits they usually get under this scheme. The MEIS outgo was about Rs 40,000 crore in FY19 and Rs 45,000 crore in FY20. For this fiscal, the budgetary allocation was to the tune of Rs 27,000-30,000 crore, according to industry sources, although there is no official word on it.