New Delhi: With turnaround in exports, the Finance Ministry is likely to withdraw a string of fiscal stimulus given to exporters to fill in the "budgetary hole", Commerce Secretary Rahul Khullar said on Wednesday.
"My friends in North Block (Finance Ministry) are having a hard time fixing the budgetary hole. When they get around to fill in that hole...they are going to start drawing back the stuff...easy target are exporters," Khullar told reporters.
After contracting for 13 months in a row due to recession in western markets, exports rebounded by 18.2 per cent in November.
Exporters said these are still early days to pull the plug on the fiscal stimulus given by the government last year.
"Decision should not be taken on a month`s data. No one knows what the trend will be in 2010," President of the Federation of Indian Export Organisations (FIEO) A Sakthivel said.
Khullar, too, pitching for exporters said, "the guy (export sector) was in the Intensive Care Unit last year. He can walk about (now) but he is still in the hospital."
He said November-2009`s performance was to be seen against a low base of poor show a year ago.
However, the exporters can breathe easy at least till the end of the current fiscal as the government would continue to support them for the next three months.
"You will have to wait till the Budget," Finance Minister Pranab Mukherejee said at a PHDCCI function, asked when the government proposes to withdraw the stimulus.
While the government extended stimulus package for creating demand in the economy, its finances went out of discipline. The fiscal deficit for the current year is projected at 6.8 per cent of the GDP. Mukherjee has said the fiscal deficit level was not sustainable
After demand for Indian merchandise slipped in the western markets from October 2008, the government came to the exporters` rescue, giving them two per cent interest subsidy and increase in duty refunds on inputs.
As far as the sectoral review by the Commerce Ministry is concerned, Khullar said the exercise is not yet complete.
The incentives given by the Commerce Ministry could also be reshuffled depending on the sectoral performance. The decision in this regard would be taken after release of the December figures, the Commerce Secretary said.
Giving an over view of sectoral performances, Khullar said exports of gems and jewellery, petroleum products, textiles, pharmaceuticals and electronics increased in November over the same period last year.
However, India`s exports in the first eight months of this fiscal were USD 104.2 billion, down 22.3 per cent from USD 134.2 billion in the year ago period.