Volume 3, Issue 5 (May, 2014) Online ISSN-2320-0073 Published by: Abhinav Publication Abhinav International Monthly Refereed Journal of Research in GROWTH BEHAVIOUR OF TOTAL EXPORT OF INDIA DURING THE RECENT YEARS Kiran Dhanju 1 Research Scholar, Chaudhary Devi Lal University, SIRSA, India Email : kamboj090@gmail.com Dr. Poonia Usha 2 Teaching Associate, Chaudhary Devi Lal University, SIRSA, India Email: ushapoonia12@gmail.com Shakuntala Sihag 3 Teaching Associate and Research Scholar, Chaudhary Devi Lal University, SIRSA, India Email: shakuntlasihag@gmail.com ABSTRACT Exports are the basis of the overall growth performance of any country. By increasing the rate of exports, any developing country can pave a way for the development by earning international liquidity thereby; sort out the problem of reserves to start up of any project to come out the circle of poverty. So, it becomes a paramount importance for the country like India to start export promotion measures to boost up the pace of its exports and India has already taken many steps to increase the level of its exports. How far, it has succeeded, has undertaken in the present study for the time from 1997-98 to 2011-12 by collecting secondary data from Handbook of Statistics on Indian Economy. It is concluded from the results of the study that Cotton raw including waste, iron ore, plastic and linoleum and transport equipment has been observed as the products in which exports have been increased at the maximum rate, whereas exports of Tea, Iron and steel, Mica and Leather and Manufacturing have been identified as the area in which satisfied results have not been achieved. So, it is suggested by the results of study that government should promote exports of different sectors by providing different incentives to different sectors to avail the opportunity and fill up the gaps as well. Keywords: Export; Performance; Agricultural; Industrial INTRODUCTION Exports of any country play an important role in the economy. Exports act as a motivating force to speed up the growth process of the developing country like India. So, Exports act as a foundation for the economic growth in developing countries like India. Exports measure the amount of goods or services that domestic producers provide to foreign consumers. It is a good that is sent to another country for sale. (May Peters and Farhan) The growth rate of an economy is directly related to exports. If exports increase at a faster pace as compared to imports, nothing can stop an economy from being a developed one. Exports are a component of aggregate demand (AD). Rising exports will help to increase AD and cause higher economic growth. India's GDP growth rate in exports is a strong factor contributing to GDP increases Available online on www.abhinavjournal.com 1
constantly day by day. India's economy has performed well in recent years after the country began to open in 1991 and India's position has improved after the inception of the WTO also as far as Export of the country is considered. (Farhan) Exports in India are reported by the Ministry of Commerce and Industry, India. Total Exports of India in 2012-13 has been registered as 300.571 and the growth rate of exports has been found as (-) 1.76. (Pratiyogita Darpan Series-1) The present study entitled Growth Behaviour of Total Export of India during the Recent Years tries to examine the growth patterns of exports of principle commodities of India. This paper analyzes the importance of export as a contributing factor to economic growth in India. The specific objective taken for the present study is to examine growth performance of India s Export during last 15 years (1997-98 to 2011-2012). OBJECTIVES 1. To examine the export performance of Agricultural products of India during recent years. 2. To analyse growth behaviour of different industrial products of India during recent years. METHODOLOGY To fulfill the stipulated objective, Secondary data have been taken for the exports of principle commodities for the study period 1997-98 to 2011-2012. The data of India s exports have been collected from Handbook of Statistics on Indian economy published by the Reserve Bank of India. Various agriculture and allied products, manufactured goods, textile and textile products, Handicrafts, other manufactured goods, and other commodities have been taken to study the exports of agricultural products of India with different countries. Analytical techniques for examining the growth performance of India s export: Compound growth Rate of different export products has been worked out by fitting exponential function. Using the least square method, the following form of exponential function has been used to calculate Compound Growth Rate. Y =AB t Where, Y= Export A= Constant B= 1+r r =Compound growth rate t =time variable in years (1, 2 ------ 15) The compound growth rate (r) is equal to (B-1) x 100. In log form B has been calculated by the following formula: Log B = T log Y - t log Y/N t 2 ( t) 2 /N The growth rates have been tested for significance by calculating value where t = r/s, s is the standard error. The value of standard error has been calculated by following formula: S.E. (r) = 100B (log Y) 2 - ( log Y) 2 /N (log10 b ) 2 T 2 Log 10 e (N-2) T 2 VOL. 3, ISSUE 5 (May 2014) 2
Where T= t t RESULTS AND DISCUSSIONS The results related to the growth behaviour of the exports of agriculture and allied products, ores and minerals, manufactured goods, engineering goods, textiles and textile products and other goods is discussed through following tables. Table 1. Growth performance of agriculture and allied products and ores and minerals Compound growth rate 1. Primary Products 16.22 A Agriculture and Allied Products 43.60 (a) Tea 4.72 (b) Coffee 6.59 (c) Rice 12.87 (d) Wheat 0 (e) Cotton raw including waste 47.52 (f) Tobacco 13.64 (g) Cashew including Cashew nut shell liquid 5.50 (h) Spices 16.05 (i) Oil Meals 15.42 (j) Fruits and Vegetables 17.54 (k) Processed fruits, juices, miscellaneous processed items 14.20 (l) Marine Products 7.32 (m) Sugar and Molasses 31.30 (n) Meat and meat preparations 21.98 (o) Other Agriculture and allied products 19.08 Ores and Minerals 23.11 a. Iron Ore 28.64 b. Mica 12.90 c. Other Ores and Minerals 18.19 In table 1, Compound Growth Rates of Agriculture and allied products and ores and minerals are shown for the study period (1997-98 to 2011-2012). Regarding agricultural and allied activities, the maximum growth rate in exports has been observed in case of the Cotton raw including waste (47.52 percent) whereas Minimum Growth rate in exports has been found in the Tea (4.72 percent) of AAP and Cashew including Cashew nut shell liquid (5.50 percent) and Marine products (7.32 percent). There has been zero growth rate in Wheat. The Growth rate of exports of Coffee has been observed as 6.59 percent The Growth rate of exports of rice during the study period has been observed as 12.87 percent and that of Tobacco is 13.64 percent and growth rate of exports of Spices is 16.07 percent and that of Oil Meals is 15.42 percent. The growth rate of exports of Fruits and Vegetables has been observed at 17.54 percent and that of Marine products has been observed as 7.32 percent. The growth rate has been observed in case of Sugar and Molasses as 31.30 percent, followed by meat preparations (21.98 percent) but are less as compared to Cotton raw including waste. The overall growth rate in the exports of ores and minerals has been observed in Iron ore as 28.64 percent and there are other ores and minerals in which growth rate in exports has been found as 18.19 percent but this increase has been noticed less than the increase in Iron ore. As far as the minimum growth rate is considered in exports of ores and minerals, it has been found in Mica with 12.90 percent during the study period. VOL. 3, ISSUE 5 (May 2014) 3
Table 2. Growth performance of manufactured goods and engineering goods Compound Growth Rate Manufactured Goods 16.91 A. Leather and Manufactures 8.87 B. Chemicals and Related Products 18.72 (a) Basic Chemicals, Pharmaceuticals, & Cosmetics 19.19 (b) Plastic and Linoleum Products 20.79 (c) Rubber, Glass, Paints, Enamels, & Products 16.30 (d) Residual Chemicals and Allied Products 14.36 Engineering Goods 24.30 (a) Iron & Steel 20.07 (b) Manufacture of Metals 20.03 (c) Machinery & Instruments 23.72 (d) Transport Equipment 30.01 (e) Electronic Goods 23.43 (f) Other Engineering Goods 28.09 The furnished results related to the growth behaviour of export in terms of the manufactured goods are presented through table 2. The figures in the table reveal that the maximum growth rate in exports of manufactured goods has been observed in plastic and linoleum products (20.79 percent) followed by basic chemicals, pharmaceuticals and cosmetics (19.19 percent). Although growth rate in exports of chemicals and related products has been observed at 18.72 percent, but it has registered the growth which has been found less than basic chemicals, pharmaceuticals, and cosmetics i.e. 19.19 percent and plastic and linoleum products i.e. 20.79 percent. The growth rate in exports of rubber, glass, paints, enamels and products has been observed at 16.30 percent and it has remained 14.36 percent in the case of residual chemical and allied products. The minimum growth rate of exports has been observed in leather and manufactures with 8.87 percent. So, positive increase has been noticed in case of all the items related to manufacturing goods. There has been a significant positive trend in the case of all the items related to the engineering goods. The maximum growth rate in exports has been observed in the Transport Equipment as 30.01 percent, followed by other Engineering Goods with 28.09 percent. Almost equal growth rate has been observed in machinery and instruments as 23.72 percent and that of electronic goods 23.43 percent. Other Engineering goods in which almost equal growth rate in exports has been observed are Iron and Steel is 20.07 percent and manufacture of metals with 20.03 percent and both of these Engineering goods also have minimum growth rates in exports i.e. Iron and Steel (29.09 percent) and manufacture of metals (20.03 percent). Table 3. Growth performance of textile and textile products and other goods Compound Growth Rate Textile and Textile Products 9.25 (a) Cotton Yarn, Fabrics, Madeups, etc. 5.52 (b) Natural Silk Yarn, Fabrics, Madeups, etc. incl. Silk Waste 4.00 (c) Man-made Yarn, Fabrics, Madeups, etc. 15.97 (d) Man-made Staple Fiber 30.00 (e) Woolen Yarn, Fabrics, Madeups, etc. 5.33 (f) Ready-made Garments 10.00 (g) Jute & Jute Manufactures 9.20 (h) Coir & Coir Manufactures 11.29 (i) Carpets 5.17 (1) Carpet Handmade 7.92 (2) Carpet Mill made 0 (3) Silk Carpets -14.00 VOL. 3, ISSUE 5 (May 2014) 4
Table 3. Growth performance of textile and textile products and other goods (Contd.) Compound Growth Rate Other goods Gems and Jewellery 17.58 Handicrafts (excluding handmade carpets) -6.59 Other Manufacturing Goods 20.46 Petroleum products 59.52 Others 31.94 The growth behaviour of textile and textile products is reflected though the table 3. Once again, there has been noticed a significant growth trend at one per cent level of significance. Man-made staple fibre has been noticed as the product in which maximum growth has been noticed with 30.00 percent. The growth rate in exports of man-made yarn, fabrics, Madeups, etc. has been observed at 15.97 percent, but has remained less than man-made staple fibre (30.00 percent). The growth rate of ready-made garments has been observed at 10.00 percent. The minimum growth rate of exports has been observed in Natural silk yarn, fabrics, Madeups etc. incl. silk waste (4.00 percent) followed by cotton yarn, fabrics, Madeups, etc. (5.33 percent) and carpets (5.17 percent). No growth rate in exports has been observed in carpets Mill made. Negative trend has been observed in silk carpets as -14.00 percent. There are some other textile products like coir and coir manufactures in which growth rate of exports has been observed as 11.29 percent. The maximum growth rate of exports has been observed in petroleum products which have been estimated at 59.52 percent and there are some other goods in which growth rate of exports has been observed at 31.94 percent. The growth rate of exports of other manufacturing goods has been observed as 20.46 percent and growth rate of exports of gems and Jewellery has been found as 17.58 percent. The negative growth rate of exports has been observed in handicrafts (excluding handmade carpets) with the value of -6.59 percent. CONCLUSIONS It may be concluded on the basis of the above discussion that the maximum growth rate in exports has been observed in Cotton Raw including Waste, Iron ore, Plastic and linoleum and transport equipment. More efforts are needed to increase the growth rate of exports of these products as these products can be seen as the opportunity to increase the level of exports of India. Less exports have been found in Tea, Iron and steel, Mica, and Leather and Manufactures. So, much more efforts are needed to increase the exports of these products in large scale. So, it is suggested by the major findings of the study that more incentives should be provided by the Government to promote exports of different sectors of India so that the opportunities can be availed by the India s exporters. In this regard, some policy implications have been put forth by our study results: Policy Implications: 1. The Indian government will have to evolve a comprehensive long term strategy, which can be formulated only on the basis of an extensive study of consumer preferences in terms of style, colour, design etc. 2. There is an urgent need for the technological upgradation of export industries. 3. There is an urgent need for the improvement in the quality of product, standards and packaging. 4. There has been emerged an urgent need of promoting diversification of agriculture. 5. Indian government should provide special incentives for the gems and jewellery sector. 6. There should be given more incentives in the specialization of handloom goods, improve market access information. VOL. 3, ISSUE 5 (May 2014) 5
7. Government can evolve support scheme for leather manufacturing units that implements pollution measures. 8. There should be better provision for special incentives for the gems and jewellery sector. REFERENCES 1. Irwin, D.A., and M. Tervio (2002), Evidence from the Twentieth Century, Journal of International Economics, Vol. 58 (1), pp. 1 18. 2. Balassa, Bela. (1978), Exports and economic growth: Further evidence, Journal of Development Economics, Vol. 5 (2), p. 181-189. 3. Feder, G. (1983), On Exports and Economic Growth, Journal of Development Economics, Vol. 12 (1/2), p. 59-73. 4. Kavoussi, R.M. (1984), Export Expansion and Economic Growth: Some Further Empirical Evidence, Journal of Development Economics, Vol. 14 (1-2), p. 241-50. 5. Kravis, I.B. (1970), Trade as Handmaiden of Growth: Similarities between the Nineteenth and Twentieth Centuries, Economic Journal, Vol. 80 (320), p. 850-72. 6. Nurkse. R. (1962), Patterns of Trade and Development, Wicksell Lectures 1959, Oxford. 7. Tyler, W. (1981), Growth and export expansion in developing countries: Some empirical evidence, Journal of Development Economics, Vol. 9 (3), p. 121-130. 8. Sen, A K. (1962), An Aspect of Indian Agriculture, The Economic Weekly, Vol. 14 (4-6), pp. 243-46. 9. Anonymous (2005), Cashew Statistics, Cashew Bulletin, Vol. 43(3) (13-17). 10. Arvind, K. (2000), Performance of India s Rice Export M.Sc. (Agri) Thesis, University of Agricultural Sciences, Bangalore. 11. Ashalatha (2000), Export Trade Performance of Indian Cashew M.Sc. (Agri.) Thesis, 12. University of Agricultural Sciences, Bangalore. 13. Balasubramanian, P.P. and Singh, H.P. (2002), Global Cashew Production and Trade 14. Vis-à-vis India s Participation Indian Cashew Issues and Strategies, p.17-30. 15. Behura, D. and naik, D. (1997), Growth of Cashew Production in India with Special Reference to its Export Opportunities Indian Journal of Agricultural Marketing, Vol. 11 (1&2), p.31. 16. Hegde, I.N. (1998), Foreign Trade in India s Economic Growth - A Quantitative Analysis Ph.D. Thesis, Karnataka University, Dharwad. 17. Nageshwara M R and S Srinivas Rao (2009), Direction of Trade in Indian Agricultural Commodity Exports, Southern Economist, Vol. 47 (19), pp.23. 18. Singh, Kehar & Inder Sain (2003), Prospects of Agricultural exports of India: A Composite Index Approach Indian Journal of Agricultural Economics, pp. 781-799. 19. Goldar Biswanath (1989), Determinants of India s export performance in engineering products (www) Developing economies. Available from http://202.244.105.129/english/publish/periodicals/de/pdf/89_01_01.pdf. 20. Findlay and Ronald (1985), Primary export, manufacturing, and development, The Primary Sector and Economic Development, London, Croom Helm, pp. 218-33. 21. Tilton, John E. (2003), Creating wealth and competitiveness in mining, Mining Engineering. 22. www.tradingeconomics.com/india/exports 23. www.wto.org/english/res_e/statis_e/its2011_e/its11_toc_e.htm VOL. 3, ISSUE 5 (May 2014) 6
24. dailyojo.com/articles/the-importance-of-exports-in-an-economy.html 25. foran.hubpages.com/hub/exportscountryplayimportantrolehttp://www.economicshelp.org/blog/716 4/trade/importance-of-exports-to-the-economy/ VOL. 3, ISSUE 5 (May 2014) 7