NEW DEHLI, India, March 30, Reuter: India unveiled on Wednesday wide ranging measures to raise exports and liberalize controls on imports of high technology and capital goods to boost the drought hit economy.
Finance Minister Narain Dutt Tiwari told reports India’s second three year import export policy starting in April 1, “had been framed in the backdrop of our ultimate objective to wipe out the trade deficit in the foreseeable future”.
India’s trade deficits in the first to 54.25 billion rupees (4.1 billion dollars) from last year thanks to a 25 per cent jump in the value of exports which outweighed higher oil import costs, Tiwar said.
“Although this is welcome, the persistent trade deficits continue to be a cause for concern,” he said. India’s total 1986/87 trade deficit hit 75.17 billion rupees (5.8 billion dollars), down from a high of 87.63 billion (6.7 billion dollars) in 1985/86.Prime Minister Rajiv Gandhi began reforms to streamline and modern the country’s agriculture based economy when he took office in 1984.
Businessmen and economists said the pace of Liberalizations had slowed as Gandhi sought to counter criticism his policies primarily benefited the affluent.
Tiwari said: “It is our earnest endeavor that the exporter should be enabled to devote his undivided attention to export promotion instead of spending his time and energy in obtaining concessions and facilities from the government”.
Tiwari added 745 more items, including capital goods and raw materials, to the open general licenses scheme, under which exported oriented manufacturers can import without applying for licenses. There are now about 2,500 the items under the scheme.
He said exporters badly needed to import capital goods, even if these were available in the domestic market, because lower international prices would help Indian firms remain viable in the world market.
Under the scheme, Indian firms ‘could import large computers with disk storage capacity of at least 1,000 megabytes.
Tiwari said 26 bulk purchase items currently imported by the public sector would be opened to the private sector.
He also relaxed controls to increase incentives to local industries which sell most of their products to export oriented firms, saying there would be great foreign exchange savings if these firms become internationally competitive.
Economists forecast India’s economic growth slowing to about 1.5 per cent in 1987/88 from 4.1 per cent last year due to last summer’s severe drought.
Article extracted from this publication >> April 8, 1988