Commerce ministry may shuffle stimulus among sectors

While tobacco, spices, man-made yarn, gems, chemicals and jewellery have shown satisfactory export growth in the past few months, textiles, handicrafts, carpet, engineering goods are still reeling under the impact of global crisis.

The commerce and industry ministry may withdraw incentives offered to certain export-oriented industries and reallocate them to those that are struggling for survival after a review in April, reports PTI.

"...Decision for any kind of change in the stimulus measures for the sectors coming out from the impact of global financial meltdown will be taken after 31st March," minister of state for commerce and industry Jyotiraditya Scindia told reporters at an Assocham function in New Delhi.

While tobacco, spices, man-made yarn, gems, chemicals and jewellery have shown satisfactory export growth in the past few months, textiles, handicrafts, carpet, engineering goods are still reeling under the impact of global crisis.

The ministry had given enhanced assistance for exploring new markets to exporters and extension of duty refund scheme till December 2010, besides other sops.

On the Budget expectations, Mr Scindia said that he has requested finance minister Pranab Mukherjee to at least retain the previous year’s allocation of Rs3,652 crore for the ministry.

Sources said that as exports have started showing signs of recovery and industrial production too has picked up significantly, the finance ministry may start withdrawing stimulus measures, resulting in lower budgetary allocation for the commerce and industry ministry.

The government had provided over Rs1.80 lash crore as part of three stimulus packages to prop up the economy against the recent global downturn.

The index of industrial production (IIP), an indicator of industrial activity in the country, zoomed 16.8% in December compared to a contraction of 0.2% during the corresponding month a year ago.

After falling for 13 straight months, exports grew by 18.2% in November 2009. Exports growth was 9.3% in December 2009 and 11.5% in January.

The Prime Minister's Economic Advisory Council (PMEAC) has forecast a 12% growth, to $88 billion, in India's exports in the second half of the current fiscal.
Exports were valued at $81 billion in the first six months of 2009-10; exports during October-March 2008-09 were estimated at $78.5 billion.
 

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