Some of the largest companies in the world today were once small enough to fit in a garage....
“We expect that in the current quarter (January-March 2013), there will be an improvement in the export performance,” commerce secretary SR Rao said
New Delhi: Declining for the eighth month in row, exports contracted by 1.92% in December 2012 to $24.8 billion, widening the country’s trade deficit to $17.6 billion in the same month, reports PTI.
Exports in December 2011 stood at $25.3 billion.
The decline, however, is lower compared to November last year when the shipments had declined by 4.17%, raising hopes of further improvement during the last quarter of the fiscal.
Imports, on the other hand, grew by 6.26% to $42.5 billion in December 2012.
During the April-December this fiscal, shipments have shrunk by 5.5% to $214.1 billion compared to the same period last year. The contraction is slightly lower compared to about 6% in the April-November period.
Commerce secretary SR Rao said that the fall in exports have been slightly arrested and “with a new set of incentives, which we get into force from 1st January , we expect that in the current quarter (January-March 2013), there will be a further improvement in the export performance.”
He said the world trade has not performed well in 2012 and the year was the ‘worst’ in terms of global trade.
“If we look at the WTO forecast for 2012, initially they forecast that the world trade will grow by 3.9% but that has been scaled down thrice and it ended with 2.5%. The 2012 rate of growth in the world trade has been less than half of past 20 year average,” he said.
Reacting to fall in exports, Apparel Export Promotion Council (AEPC) chairman A Sakthivel said the government should take some steps in the Budget to boost shipments.
Imports (in the first nine months of this financial year) dipped by 0.71% to $361.2 billion. Trade deficit (during the period) stands at $147.2 billion up from $137.3 billion in the same period previous year.
Oil imports in December increased by 23.5% year-on-year to $14.4 billion. Non-oil imports, however, declined by 0.87% to $28.11 billion.
During April-December 2012, oil imports grew by 12.18% to $124.5 billion. However, non-oil imports during the period dipped by 6.37% to $236.75 billion.
Rao added that for 2013 also, the WTO has estimated a growth rate of 4.5% which is again a scale down version of 5.2% projected earlier.
When asked if the government is considering hiking import duty on gold, Rao said, “We are in consultations” with the finance ministry.
However, he said “the good news is that the US has overcome from the fiscal cliff and we hope that the US economy stabilises.” The US and Europe account for about one-third of the country’s exports, which was $307 billion in 2011-12.
The secretary said the strategy of market diversification has helped exporters.
“Fall in exports has been substantially cushioned because of diversification in Africa, Asean, far-east and Latin America. There is a need to redouble our efforts here;” he said adding “rupee has appreciated to Rs55 which is good news for us.”
On the export target of $360 billion, he said it is difficult to achieve.
Exporters body FIEO expects that exports may touch $300 billion by end of 2012-13.
Out of the top five items that India exports only pharmaceuticals recorded a positive growth of 10.7% during April-December period. Engineering exports declined by 4.4%, petroleum products by 4.1%, gems and jewellery by 10.6% and textiles by 8.4%.
Similarly, out of the top five import items, only crude oil recorded growth of 12.18 % to $125 billion.
Rest registered negative growth—gold and silver (-15%), machinery (-5%), electronics (- 9%) and pearls, semi-precious and precious stones (-36%). Gold and silver import stood at $39 billion as against $46 billion in April-December 2011.
An important lesson on how to banish misery
This year, we celebrate the 150th birth anniversary (12th January) of one of the greatest Indians of all time—Swami Vivekananda. There is so much one can learn from the life of Swamiji. If one has to understand the full implications of his teachings, it is imperative to read the Complete Works of Swami Vivekananda that run into several volumes—a huge task. This article is an attempt to pay a tribute to Swamiji, by delineating some of the subjects close to his heart. One subject that holds great relevance even today is: Why does man feel miserable?
In chapter III Part I of the Complete Works, under the heading “The Secret of Work”, Swamiji states, “Helping others physically, by removing their physical needs, is indeed great, but the help is great according as the need is greater and according as the help is far reaching. If a man's wants can be removed for an hour, it is helping him indeed; if his wants can be removed for a year, it will be more help to him; but if his wants can be removed for ever, it is surely the greatest help that can be given (to) him.”
However, the million-rupee question that needs to be answered is: How can man be free from misery? Swamiji says that spiritual knowledge is the only thing that can destroy our miseries forever. In the words of Swamiji, “He who gives man spiritual knowledge is the greatest benefactor of mankind and as such we always find that those were the most powerful of men who helped man in his spiritual needs, because spirituality is the true basis of all our activities in life.” Swamiji says that until there is spiritual strength, even physical needs cannot be satisfied and, therefore, mankind must develop spiritual strength.
Second to spiritual help is intellectual help. It is said that the gift of knowledge is a far superior gift than that of food and clothes. Swamiji said that it is, “higher than giving life to a man, because the real life of man consists of knowledge. Ignorance is death, knowledge is life.” Swamiji beautifully highlights the worthlessness of life devoid of knowledge and states, “Life is of very little value, if it is a life in the dark, groping through ignorance and misery.”
The next level of service, after knowledge, is physical. Swamiji said, “In considering the question of helping others, we must always strive not to commit the mistake of thinking that physical help is the only help that can be given. It is not only the last but the least, because it cannot bring about permanent satisfaction.”
Swamiji rightly observes that misery is felt when one’s hunger is satisfied by eating, but only to find that hunger returns. Hence, misery can cease only when a man is satisfied beyond all wants. When a person reaches such a state, then hunger will not make him miserable nor will distress or sorrow.
He very clearly elucidates that the miseries of the world cannot be cured by physical help only. He reiterates that until man’s nature changes, his physical needs will keep arising and, consequently, miseries will continue to be felt. Any amount of physical help will not cure all miseries completely.
In the words of Swamiji, “The only solution of this problem is to make mankind pure. Ignorance is the mother of all the evil and all the misery we see. Let men have light, let them be pure and spiritually strong and educated, then alone will misery cease in the world, not before.”
To cease the miseries in the financial world, it is important for the investors to educate themselves and to understand the underlying issues. Any ignorance, on their part, could only bring them losses and, thereby, result in misery. To achieve this, investors have to develop a mindset and character that would enable them to understand the intricacies and the risks involved in every financial decision. Investors should become enlightened and not allow their greed to rule their mind; else the result will be misery.
(Dr SD Israni, advocate & partner, SD Israni Law Chambers, is one of India’s leading authority on corporate, commercial and securities laws. He was a member of the Naresh Chandra Committee for simplification of Company Law relating to private and small companies. He has been on SEBI's committee on disclosures (called the Malegam Committee) and the one on buy-back of shares. Dr Israni has been a member of the Legal Affairs Committee of the Bombay Chamber of Commerce and Industry, Indian Merchants' Chamber and Indian Council of Arbitration. Dr Israni is an active member of the Institute of Company Secretaries of India and was on its Central Council for four terms and headed the Capital Markets Committee of the ICSI.)