Government admits $9 billion export gaffe

NEW DELHI Fri Dec 9, 2011 7:08pm IST

A worker sits inside a shop at a wholesale iron market in Kolkata December 13, 2010. REUTERS/Rupak De Chowdhuri/Files

A worker sits inside a shop at a wholesale iron market in Kolkata December 13, 2010.

Credit: Reuters/Rupak De Chowdhuri/Files

Related Topics

NEW DELHI (Reuters) - Already battered by corruption scandals, and less than a week after an embarrassing policy U-turn, the government admitted on Friday that it had accidentally inflated this year's export figures by more than $9 billion.

The cause was a glitch in the computer system that collates the trade data, Trade Secretary Rahul Khullar told reporters. Months of export and trade deficit data have had to be revised.

"How many people would come and tell you, 'OK we goofed'? There was a mistake," Khullar said. "There is no shame in admitting that there is something wrong," he added.

With export growth slower than first thought, the trade deficit has now swelled by $9 billion, a worrying sign that emerged on the same day that New Delhi revised down its annual economic growth forecast to 7.5 percent from about 9 percent.

Growth rates for individual sectors were also distorted by computer errors, Khullar said. For example, the performance of the engineering goods sector had been exaggerated because certain shipments had been incorrectly classified. Exports of petroleum products, on the other hand, had been under-estimated.

The ministry had consistently emphasised that the data released each month was provisional, and it had been open about concerns that the figures were unreliable.

The admission came after months of speculation in business newspapers about possible flaws in the data. In particular, suspicions were aroused by a big jump in exports -- by as much as 82 percent in July -- at a time when industrial growth and other indicators were showing signs of an economic slowdown.

"Many of you have been commenting ... in the media about how are exports doing so well if manufacturing is doing badly, and the implicit understanding was that look, either the export numbers are wrong, or the IIP (index of industrial production)numbers are wrong, or both are wrong," Khullar said.

At a previous news conference, Khullar bristled at the suggestion that the ministry was "cooking the books", to use his phrase.

Khullar also emphasised that while the figures were inaccurate, the overall export trends portrayed were reliable. Exports grew 33 percent between April and November, hitting $193 billion, according to the revised data.

"The big picture still remains that the exports are still doing pretty damn well at 193," he said.

Exporters in Asia's third-largest economy enjoyed record growth last year, rebounding from the global financial crisis as demand from Europe and the United States revived.

This fiscal year had also started with strong double-digit growth, according to the original figures.

But with the euro zone lurching from crisis to crisis, and a sluggish U.S. economy, demand has once again been shaken. That will put pressure on India's trade deficit, which could amount to $155-160 billion for this fiscal year, Khullar said.

(Reporting by Matthias Williams; Editing by Ted Kerr)

FILED UNDER:
  • Most Popular
  • Most Shared

Insight

REUTERS SHOWCASE

Border Talks

Border Talks

India names Ajit Doval as special envoy for China border talks.  Full Article 

WTO Deal

WTO Deal

U.S. seeks to step up India trade talks  Full Article 

Phone Masts

Phone Masts

American Tower to buy Bharti Nigeria phone masts for $1.1 billion  Full Article 

Infrastructure Plan

Infrastructure Plan

India targets private cash to build railways to its ports.  Full Article 

Shadow Banking

Shadow Banking

Reserve Bank planning more measures for NBFCs.  Full Article 

Auto Sector

Auto Sector

Hyundai Motor, Kia Motors lift 2014 global sales target on China, emerging markets  Full Article 

Oil Prices

Oil Prices

Some fund managers see oil falling to $60 without OPEC cut.  Full Article 

Project Shelved

Project Shelved

Jindal Steel shelves $10 bln project after coal setback.  Full Article 

Market Eye

Market Eye

Sensex, Nifty rise to record after China, ECB stimulus boosts risk appetite.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage