There is little hope of reversing the slowdown in India's merchandise exports in the near term, and the country's growth is expected to decelerate in the next two quarters, Finance Minister Pranab Mukherjee said on Monday.
But a revival of the country's economy can be expected from the last quarter of this fiscal, Mukherjee said during an interaction with the members of the Forum of Financial Writers and the Commonwealth Journalists Association here.
"I am a little doubtful if we will be able to maintain the same level of growth in the second and third quarters," the minister said, referring to the 6.1 percent expansion achieved during the first quarter of this fiscal.
Giving the primary reasons behind his concern, Mukherjee said agricultural growth was expected to retard even as industry had started picking up slowly.
"Exports are still going down and I do not visualise the immediate revival of the export unless the European economy has a robust revival," said the finance minister, who had just returned here after a gruelling schedule in London during the G20 meetings of finance ministers.
He said over 60 percent of India's exports were targeted at three economies -- with Europe accounting for 36 percent, the US around 15-16 percent and Japan with a 14-15 percent share -- all of which were facing severe downturn.
"Unless there is a robust revival of the economy there, it is very difficult. So export growth -- I am little worried over that. It is not going to take place," said the minister, concerned over 10 straight months of decline for India's merchandise exports.
At the same time, Mukherjee said, another cause for worry was a deceleration in the country's imports especially non-oil commodities -- another indication that industrial revival has not been robust.
According to him, the drought in India -- declared in 252 out of 626 districts -- will not only impact the agriculture output but also pressure the availability of water in the ensuing seasons.
He said 81 water reservoirs are monitored centrally and up to Aug 20, these were filled only to the extent of 36 percent of the prevailing level last year -- when again, they were only filled two-thirds.
"This will have an impact on availability of water for the winter crop. Also, it may affect some of the hydel power projects."