Labor reforms to boost export

By agencies   |   Wednesday, 26 April 2006, 07:00 Hrs
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NEW DELHI: Leading economic think-tank NCAER has advocated slew of policy reforms including a flexible labor regime to boost exports from the country.

National Council of Applied Economic research said today "Merchandise exports have started facing infrastructural bottlenecks as well as policy impediments arising from continued slips on reforming labor and exit laws.”

The think-tank pointed out, exports grew by about 24 percent in 2005-06 to cross the magical mark of $100 billion. While there is hope that country's export prowess would grow during the next two to three years, much more has to be done with regard to the policy that would sustain such might for a longer term
NCAER also favored efficient re-allocation of existing non-performing locked-in capital assets to enhance overall productivity.

Commenting on the Annual Supplement of India's Foreign Trade Policy (FTP) 2004-09, it said declarations made in the policy might sound like impressive steps forward, but these were subject to some qualifying remarks.

NCAER said “The high growth rate of 2004-05 should also not be linked directly to the FTP since it became functional only in the second quarter of fiscal 2004-05.”

Raising apprehension that many of the export promotion schemes being nurtured under the FTP might get questioned by the affected countries in the WTO, NCAER said, “This may turn out to be a costlier option if India is not able to defend its export promotion policies.”

It also outlined rising oil price as one of the downside risks that could affect world economic growth and the potential of global trade in the near future.

Moreover, a disorderly unwinding of the macroeconomic imbalances of the major economies and the likely failure to sign a successful multilateral trade pact were other reasons that NCAER found could affect growth of global economy.

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