SRI LANKA-A Step Back

foreign supplies are bound to rise even further. During April-January 1995-96, petroleum products, machinery, transport equipment and project imports accounted for41 percent of total imports. Add to this the imports of pearls and precious stones needed for gems and jewellery exports and imports of intermediate chemicals under the liberalised regime, and the figure moves to well above halt the total. Of these, imports of petroleum products are estimated to rise sharply next year, since domestic production has stagnated while domestic demand for POL and products is slated to rise sharply. The recent liberalisation of CKD imports of automobiles would raise importsinthe transport equipment area us well. And the clear post-liberalisation shift away from domestic to imported capital goods and intermediates is likely to push up capital goods and chemicals imports. Thus import growth appears to be structurally linked to the strategy of development and would burgeon with growth, so that any adjustment of the trade balance under the current strategy must occur through a faster growth of exports, It is however in regard to export growth that the available evidence is most disconcerting. Almost a fifth (18 percent) of the increase in dollar export value during April- January 1995-96 compared with the corresponding period of the previous year was due to exports of non-basmati rice, whose presence in India's export basket in the previous year was negligible. Not surprisingly, this commodity came to account for 20 per cent of the total exports of agricultural and allied products, which contributed 18 per cent of total exports and registered a growth of 36.7 per cent during the April-January period. Thiscompares more than favourably with India's traditional leading export-earners; gems and jewellery (share 17 percent and growth 20.6 per cent), textiles (14 per cent and 17.6 per cent), ready-made garments (growth 14.7 per cent) and mining and minerals (4 per cent and 26 per cent).