Re fall will offset poor exports

NEW DELHI: The Economic Survey 1997-98 has made light of the fall in rupee value to Rs 39 against the dollar in March this year, calling it a correction towards the real effective exchange of the rupee against international currencies. The rupee has since fallen to Rs 41 to a dollar.

The survey seems to suggest that the sluggish export growth rate of 2.6 per cent during 1997-98 was not unduly worrying because of the fall in rupee value which would improve the prospects for exports in value terms. The survey says this fall had actually offset the comparative disadvantage Indian exporters could have had to face from the falling South East Asian currencies.

Though the ratio of exports to GDP increased to 19 per cent in 1997-98 against 14.1 per cent in 1991-92, the rate of export growth came down to 2.6 per cent from 5.3 per cent in 1996-97. The survey defends the fall in exports by quoting the export growth recorded by other Asian countries.