Concerned over the widening trade deficit, the government has set up a six-member inter-ministerial committee under the chairmanship of Finance Secretary R S Gujral which will suggest measures to boost the Micro, Small and Medium Enterprises (MSME) exports. The sector contributes around 8% of the country's GDP, 45% of the manufactured output, 40% of the total country’s exports and provides employment to about 60 million persons through 26 million enterprises.
The committee will suggest short and long term measures to enhance exports from MSME sector and will submit its recommendations by mid-May. Issues related to MSMEs need to be looked with greater depth as exports are not doing well due to which the country's trade deficit touched an all-time high of $190.1 billion in FY13. Moreover, the sector would also help in boosting the growth of manufacturing sector.
The widening trade gap is adding woes on the Current Account Deficit (CAD) front, which has emerged as a tough policy challenge for the government. CAD crossed 6.7 percent of the GDP in the third quarter of last fiscal. However, in order to increase shipments from the country, the government is taking every step including recent announcement of incentives and revamping of special economic zone (SEZ) policy.
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