Finance minister Pranab Mukherjee said that while India’s export sector has performed well so far this year, the tendency of some developed countries to resort to protectionist measures in the face of downturn of their economies would have a bearing on the country’s exports
New Delhi: Finance minister Pranab Mukherjee on Monday said the euro zone crisis is impacting the country's growth and will hurt exports in coming months, reports PTI.
“The recent development in the Eurozone has heightened uncertainty in financial markets. India’s short-term growth prospects have been adversely impacted,” he said while inaugurating the India International Trade Fair here.
The minister further said the tendency of certain developed countries to adopt protectionist measures during a downturn would have a bearing on India’s exports, which have reported impressive growth so far this year.
“India's export sector has performed well this year. I must add that the tendency of some developed countries to resort to protectionist measures in the face of downturn of their economy is a matter of grave concern, not only to our exports, but also to the recovery of the world as a whole,” he said.
“If the Eurozone crisis prolongs, growth in exports will be impacted,” he added.
Industrial production slipped to a two-year low of 1.9% in September. Overall economic growth in the first quarter of the fiscal stood at 7.7%, the lowest rate experienced in 18 months.
The Reserve Bank of India (RBI), India's central banking system, has already revised its growth projection for 2011-12 downward to 7.6% from 8.5% in the previous fiscal, mainly on account of the global economic slowdown and stubborn domestic inflation.
Despite media hype, air fares have not shot up if you book in advance. In any case, travelling by air has become extremely expensive, when you factor in all the add-on costs, as compared to when you travel by train.
Here's a simple truth – in spite of all the media hype about rampant increases in air-fares, the fact remains that the air fares on major trunk routes (like Delhi - Mumbai (Rs5-6k), Mumbai - Bangalore (Rs4-5k) and Delhi - Bangalore (Rs6-7k)) for flights over the next week or so, are actually at almost the same levels as they were a few weeks ago. That's when you buy off the internet. Head for the small hole-in-the-wall travel agencies that seem to abound near airports and railway stations, and unless you are totally naive, you will lop off some from these prices too.
As a simple matter of fact, a family member flew Delhi - Bangalore yesterday on a ticket bought a few months ago for a shade under Rs4, 000, and found that the aircraft was almost one-third empty. More interestingly, in the interests of research, I got there early, and from one of those small agencies just outside T1 at Delhi's IGI Airport, was assured that I could even now get a ticket on the same flight for Rs4,300. This is not somebody who will take the money and run. He came with a reference, and has been in business there for years.
It is not as though people have stopped travelling. But they are using other means. The trains continue to go full. Nor can one blame over-capacity alone on air-routes within India - though that certainly is one of the reasons. Non stop point-to-point trains on some routes have no doubt taken away much business. The success of Duronto Express trains is now an established fact on most routes. Further, overnight trains provide a tangible saving on fare as well as hotel costs.
The main reason is that travelling by air has become extremely expensive, when you factor in all the add-on costs, as compared to when you travel by train - from local transport to/from airports, price gouging in the name of "user development fees", to the cost of basic food at airports or onboard to the charges for excess baggage. The cost of time, the strict security regulations and especially, the surly attitudes one is at the receiving end of from staff members are also to be considered.
Kingfisher Airlines seems to be getting most of the attention lately, but the other airlines are almost equally relevant. This needs to be viewed as a much overdue correction. Expecting all the agencies involved to come together and address the situation appears to be close to impossible. How does one justify, for example, the fact that an airport operator like GMR happily spends hundreds of crores to sponsor a cricket team for the IPL? But GMR does not provide free drinking water to people waiting outside its terminals.
Air travel has not been a luxury product for the average air-traveller for some time now. For that, the private non-scheduled operators are present for those who want it. It is about time, this simple fact was recognised by the authorities, and acted upon. There is a social need, which has to be fulfilled. It is being ignored, as everybody in the industry reaches out and talks only about increasing fares. Nothing is being done to cut down on wastage.
The present shake-out, therefore, is going to be good. Shared infrastructure at airports like maintenance and repair facilities, buses and ladders, better intermodal connectivity, doing away with UDF (User Development Fee - Airport Tax), and most of all, bringing the smile back on the faces of those who are on the frontlines, is what is needed.
Otherwise, higher airfares alone are not going to cut it, especially in the present economic scenario. People are going to continue to travel - but not by air.
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