Buoyed by rising international commodity prices and recovery of domestic manufacturing sector, exports rose 20.4 per cent during the first nine months of this fiscal but this growth rate hinges on hastening the pace of domestic reforms.
"Downside risks to exports in 2002-03, however, remain from a moderation of global recovery prospects and a lower-than-expected demand outlook for domestic economy due to deficient monsoon," according to the pre-Budget Economic Survey tabled in Parliament on Thursday.
"This underscores the importance of hastening the pace of reforms, specially on various domestic impediments to export growth concomitantly with further tariff reforms to strengthen the country's competitiveness in global trade," it cautioned.
"The surge in exports has ocurred in spite of the sluggish pace of global economic recovery and the slight appreciation of the rupee vis-a-vis the dollar and has contributed to domestic industrial growth," it added.
Expressing satisfaction over the revival of exports at 20.4 per cent growth during the first nine months this fiscal, the Economic Survey for 2003-04 says this has considerably enhanced the possibility of recording a surplus for the second year in a row.
An anticipated rise in international commodity prices in 2002 and the recovery of the domestic manufacturing sector is likely to aid this upturn in exports this fiscal, it added.
Robust export growth has resulted in narrowing of trade deficit in the current fiscal so far to 13.2 per cent to $5,767 million during April-December 2002 from $6643 million during the corresponding period of 2001, the Survey said.
Overall trade deficit, which reflects increased imports (as compared to exports), widened by 26.9 per cent in 2001-02 mainly because of a decline in exports.
The Survey lauded the government's efforts to strengthen exports of major commodities like gems and jewellery, textiles, engineering goods, chemicals and related products and ores and minerals during the year.
"Although the trend of export recovery is in line with world economic recovery, the bouyant performance assumes significance given the slower than expected recovery in global economy and trade," it said.
Besides various domestic impediments to export growth including infrastructure constraints, high transaction costs, SSI reservations, inflexibility in labour laws and constraints in attracting foreign investments in export sector, slowdown in domestic manufacturing sector seems to have also impacted the supply response of exports during the year, it added.
PTI