ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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The Imports Trap

WHERE the government is concerned good news evidently travels very fast. It is rare for official statistics of the country's foreign trade to be released with a time-lag of just one month. However, the union commerce minister, Dinesh Singh, called a press conference on May 6 to announce the provisional trade figures for 1988-89. Whereas the commerce ministry's annual report for 1988-89 had disclosed a sharp rise of over 34 per cent in the trade deficit in the first three quarters of 1988-89, the data for the full year presented by the commerce minister showed quite a dramatic improvement in the trade balance. The trade deficit in 1988-89 turns out to have been only about 12 per cent larger than that in 1987-88. In the last quarter of the year, it appears, the rate of growth of exports, which had till then been around 24 per cent, shot up to 41 per cent; on the other hand, imports which had been growing at some 27 per cent slowed down markedly to register a rise of no more than 15 per cent. So, after threatening, on the basis of the trade performance in the first three quarters, to pitchfork the annual trade gap to a record level, the year actually ended with a far less spectacular, though still very large, deficit of Rs 7,412 crore compared to Rs 6,624 crore in 1987-88.

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