Amid talk of the government seeking to set up a “formal institutional mechanism” to determine the right value of the rupee, Congress has pitched for urgent measures to raise India’s competitive advantage in export markets, cautioning that falling shipments is hurting the country.
In an article put on its website, the party said that a section of the media carried reports that the Ministry of Commerce and Industry has proposed setting up of a “formal institutional mechanism” to determine the right value of the rupee for competitive advantage in export markets.
“While the government is free to consider taking decision it deems fit to make our exports competitive again, matters have already reached a point where something needs to be done urgently. A free-fall is only going to hurt the millions who work in the export sector of the country”, the party said in the commentary.
The piece titled ‘Modiji tirelessly works to topple elected govts, but has no solution for 21 months of declining exports’ is posted on its website.
Reports claims that worried over continuous slowdown in exports, the Ministry of Commerce is pressing for a better exchange rate policy to boost shipments.
In a draft Cabinet note circulated earlier to seek views of other ministries, the ministry has suggested that a mechanism be formulated to ensure the rupee-dollar exchange rate reflects realistic value of the domestic currency.
At present, Indian currency’s real effective exchange rate (REER) is viewed as overvalued compared to several countries like Mexico, South Africa, Argentina and Brazil.
Domestic exporters are facing huge competition from the developing economies, especially China, in the global markets.
“The bad news in exports is getting worse. The decline was so far limited to the merchandise exports but this is now showing an impact on the export of services,” the piece said.
The commentary said that the net export of services for April-July, 2016-17 was estimated at USD 21,562 million which is lower than net export of services of USD 22,371 million during April-July 2015-16.
Targeting the Modi dispensation, the opposition party said, “For a government that was clearly elected on an economic agenda, exports have come down for most of Modi’s term in office.
“Last 21 of the 22 months have seen a decline in merchandise exports and while the baseline is considerably lower now, it does not look like either the Prime Minister or the Union Commerce Minister has too many ideas to get the exports sector back on the growth trajectory.”