Study contests exports growth claim

MUMBAI, MAY 24: Has India really achieved a positive export growth in 1998-99? A study conducted by the Investment Research and Informati...

MUMBAI, MAY 24: Has India really achieved a positive export growth in 1998-99? A study conducted by the Investment Research and Information Services IRIS, an economic research agency, has contradicted the government8217;s claim of a 3.7 per cent growth in exports in fiscal 1998-99 and claimed that the export growth rate was, in fact, negative.

Disputing the government arguments, IRIS said in a statement that the growth rate projected by the Directorate General of Commercial Intelligences and Statistics DGCIS is on account of a downward revision in the value of exports for 1997-98 from 33,980 million to 32,441 million. The revised figures were arrived at recently and a year after projecting earlier estimate, IRIS said, adding, 8220;the growth rate, if one goes by the earlier estimate is negative one per cent8221;.

The DGCIS release puts the export figures for 1997-98 at 32,441 million, a sharp fall from the earlier estimated 33,980 million for that year. The 1998-99 export value is 33,641 million.According to IRIS, the revised 1997-98 figure was announced by the DGCIS after the 1998-99 figures were arrived at, thus indicating a positive trend at 3.7 per cent.

However, the DGCIS release also does not substantiate for the new downward export value of 1997-98 and the growth rate of 1998-99 is pushed up as a consequence of this adjustment. However, the DGCIS has decided to maintain the previous growth rate of 2.64 per cent in 1997-98 in its latest release, only mentioning revisions being undertaken in a footnote.

An important point is that the figures given are unadjusted trade figures, incorporating the late returns of previous months. Analysts at IRIS point out that the export value of a particular month may be revised later due to late returns of the previous months, and that is usually the reason for frequent revisions of trade data. But what is surprising is the downward8217; revision of March 1998 figures has come in twelve months after the original publication of the data. In simple terms, itmeans that DGCIS took a whole year to account for the fact that export earnings which were supposed to have come in by 1997-98, were not realized to the extent expected.

While amending the Exim Policy on March 31, 1999, Union Commerce Minister Ramkrishna Hegde stated that the export growth rate over April-January 1998-99 was 0.41 per cent in dollar terms. For the same period, the DGCIS data states a growth rate of -1.98 percent. What is strange is while DGCIS export growth rate in dollar terms does not tally with the ministry estimates, the same export growth when denominated in rupees at 12 is on par with ministry estimates.

According to DGCIS India8217;s exports in rupee terms were Rs 117,524.98 crore, Rs 120,614.28 crore and Rs 141,603.53 crore for the years 1996-97, 1997-98 and 1998-99 respectively. India8217;s exports during March 1999 were registered to be 3,395.66 million, 10.07 per cent higher than exports of March 1998 at 3,085.06 million. In rupee terms the exports were higher by 18.28 per cent atRs 14,414.12 crore during the same months.