Scary fall. Exports, which contribute around 16% to India's GDP, fell by 33.3% in March to US$ 11.5 bn, the sharpest fall since April 1995. For the whole of FY09, exports touched US$ 168.7 bn, recording a 3.4% growth in dollar terms and falling short of the government's revised target of US$ 170 bn. The fall in exports has obviously been due to the ongoing recession in the US, Europe and Japan. Imports have not been spared either. Non-oil imports in March contracted 18.9% to US$ 11.7 bn while oil imports shrank 58.1% to US$ 3.8 bn. Waning imports in the areas of machinery, equipment and project goods is likely to be an area of concern as it signals a slowdown in industrial production. While there are expectations that the recovery would start manifesting in July itself, others are of the opinion that the export growth will be subdued in FY10 as well. What is clear is that unless some sparks of revival are witnessed in the developed economies, India's export growth till such time will most likely remain muted.
Look at government inefficiency, food prices have galloped at an alarming rate over the last few months. Some blame it on the poor monsoons. Some blame it on hoarding by greedy middlemen. In my opinion, the government unknowingly itself is a massive hoarder. As per a report in a financial daily, the stock of rice and wheat in government granaries is way above the minimum requirement. Sadly, much of this excess stock is stored in the open. It either rots or feeds pests. In my view, this is a national shame. We cannot get the basics right in such a crucial area when food prices are spiraling out of control and millions of Indians still go hungry. Such stocks should be stored properly and released in small lots to stabilise prices.
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