Trade deficit set to grow
Although the government admitted to making an error in its exports estimates mid-way through the year, data revision is not a new phenomenon. It largely goes unnoticed as there is a huge lag between the time provisional numbers are made public and by the time the data is finalized. But this year, research houses and brokerages have been putting out reports suggesting that the government has been overestimating export data, something the government has denied all along. Even after admitting the error, the commerce secretary said the broad trends remain the same. According to the latest available numbers, exports rose 33% to $192.7 billion during April-November, while imports went up 30% to $309.5 billion, resulting in a trade deficit of $116.8 billion. According to the government’s estimate, exports may just touch the $300 billion target for 2011-12. The bigger worry is that trade deficit may cross the $150 billion mark by March when the year closes. Following the correction, engineering exports, which were seen as a shining star for the past several months, lost their sheen with the overall growth moderating to 20.3% although with shipments between April and November valued at $40.7 billion, the sector still accounts for over 20% of India’s exports. The engineering sector’s loss is petroleum’s gain. The provisional numbers for the first nine months of the year estimated exports at $30.5 billion, a rise of 62% over last year. Gems and jewellery exports too grew 56% to $30 billion.