Trade deficit doubles to $ 6.70 bn

NEW DELHI, JAN 1: The country's export growth decelerated 3.97 per cent in April-November 1998 compared with the previous corresponding p...

NEW DELHI, JAN 1: The country’s export growth decelerated 3.97 per cent in April-November 1998 compared with the previous corresponding period, according to foreign trade data released by the commerce ministry on Friday. The negative growth in exports pushed the trade deficit to an alarming $6.70 billion, almost twice as much as the $3.36 billion in April-November 1997 despite the 9.5 per cent increase in imports.

The decline was despite the positive export growth of 3.81 per cent recorded in November 1998 over November 1997. Exports have been showing a negative growth in the preceding months of the 1998-99 fiscal, barring April.

Exports were valued at $21,476.10 million in April-November 1998 compared with the $22,363.38 million in April-November 1997. Exports in November 1998 were valued at $2,551.19 million compared with the $2,457.57 million in the same month in 1997. In rupee terms, exports were Rs 10,812 crore, 18.15 per cent higher than the value of exports in November 1997.

Imports inApril-November 1998 are estimated at $28,177.30 million compared with $25,732.77 million. Oil imports are valued at $4,030.16 million which is 25.12 per cent lower than those valued at $5,382.35 million. Non-oil imports are estimated at $24,147.14 million, which is 18.66 per cent more than the level of such imports valued at $20,350.42 million.

Imports in November 1998 stood at $3,476.60 million, representing a growth of 15.1 per cent over the level of $3,030.50 million in November 1997.

Senior commerce ministry officials had been hoping that the export growth would turn positive in April-November 1998 compared with the decelerating trend witnessed since May of the same year. Their hopes have now been belied.

The growth rate at the end of the current fiscal would not be no more than two to three per cent compared to the 2.64 per cent growth registered in 1997-98, they predict.

Story continues below this ad

The growth rate in 1997-98 was far short of the 8-10 per cent increase visualised by former commerce minister BB Ramaiah andthe 18-20 per cent annual growth targeted by the Congress government for the entire Eighth Plan period immediately after the start of the reforms in 1991-92.

Compared to the Eighth Plan achievements, the export growth rate registered in the first year of the Ninth Plan was by far the lowest. The previous low of 3.8 per cent was in 1992-93, first year of the Eighth Plan.

Exports grew by a mere 1.5 per cent in 1991-92, while imports declined due to import compression measures initiated by the Congress government immediately after the start of the reforms.

The trade deficit at $3.34 billion in 1992-93 fell sharply to $1.06 billion in 1993-94. In 1994-95, however, the trade deficit rose again to $2.02 billion and further to $4.53 billion in 1995-96 and to $5.44 billion in 1996-97. It shot up to an all-time high of $6.79 billion in 1997-98.

Story continues below this ad

Before the launch of the reforms, exports recorded a growth of 24.1 per cent in 1987-88 (first year of the Seventh Plan), 15.6 per cent in 1988-89 and 19 per cent in1989-90. The following two years of the plan, however, recorded a growth of 9 per cent in 1990-91 and minus 1.5 per cent in 1991-92.

Meanwhile, Commerce Minister Ramakrishna Hegde today said his ministry was doing "everything possible" to achieve the targetted 15 per cent growth rate for Indian exports in the current financial year.

Asked by reporters if his ministry was confident that the target would be met, Hegde said: "it all depends on what’s going to happen in the next three months. It (the exports) might pick up very well. We are doing everything possible."