Commerce secretary Rahul Khullar on Friday admitted that the countrys export numbers over the past eight months have been inflated to the tune of over $9 billion and that the government has revised all the numbers for the April-October period. Experts had for long doubted the figures and Khullars admission confirmed their stand.
The mismatch came about mainly because of over-estimation of engineering export,the growth of which had baffled economists as it was not in tandem with the growth of industrial production during the period.
While the index of industrial production (IIP) stood at 5 per cent for the April-September period,exports grew by 52.08 per cent during the same period.
Experts though,aired concerns over the veracity of the export data and the government had summarily brushed aside their arguments. There was a misclassification of goods … notwithstanding the misclassification,there were also errors like double counting and all other sorts of things,which inflated exports in all by $9.4 billion,which is in the neighbourhood of about 4-5 per cent. This is a mistake. There is no harm in conceding the mistake, Khullar said while announcing the export figures for November.
He said that engineering exports were inflated by $15 billion while the export of POL and gems and jewellery was underestimated by $12 billion adding that the balance of trade deficit was,as a result,kept under-valued at $107 billion instead of $116.8 billion. The government was forced to re-look at its export figures given the controversy it had generated while the reliability of the data was also questioned.
However,he said,even after incorporating the revision,the exports registered a growth of 33.2 per cent during April-November period. Even as exports were growing at a robust pace,the commerce secretary from the beginning of the financial year had been maintaining that the summer is not going to be easy for exporters this fiscal.
Khullar had maintained,There will be a slowdown starting this month (August) and carrying through from September onwards. As I said this is not going to be an easy summer and it has not been an easy summer. Enjoy it while you can.
Experts said that the revised data is closer to the expectation of reality and provides greater authenticity. Not only it squares with the industrial data,it is also in line with the current economic situation. There was certain discomfort with the export numbers and now that the revision has been done,we see that the discomfort was not misplaced, DK Joshi,chief economist,Crisil,said. Principal Advisor to Planning Commission Pronab Sen said the export data was a cause of concern because engineering goods have a large weight in the IIP and it wasnt getting reflected in the data.
For the eight month period,total exports stood at $192.7 billion,up 33.2 per cent while imports at $309.5 billion,up 30.2 per cent. The trade deficit stood at $116.8 billion,which may settle around $150-160 billion by the year end.