Exports succumbed to the prolonged slowdown in the current fiscal year, and according to latest figures the sector witnessed 1.8 percent fall in overseas shipments in December, 2019. A number of global factors, including US-China trade war and slowdown in economies across the globe are responsible for this fall. Additionally, domestic factors like liquidity crisis, red tape, etc. are no less responsible. In this scenario, the sector is now pinning hope on Budget 2020 for fiscal relief and ease of doing business.
It is widely viewed that focus of the Union Budget should be on spending toward — besides exports — railways, defence and real estate sectors. In addition, sector specific incentives are expected also for sectors like NBFCs and independent power producers and distribution companies. But it has already become quite clear that in the view of our ballooning fiscal deficit, the Budget may not come with many big bang announcements.
While the tight fiscal space is a concern, as far as export is concerned, it seems a lot can be done by way of removing the existing red tape and hurdles that exist for the sector. In terms of 'ease of doing business', a lot more needs to be done on the ground level. Incentives can be provided by way of cost reductions on inputs for exports. Despite the tight fiscal situation, a way must be eked out to support the sector.