ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Myth of People s Cloth

TWO conditions, at least, arc necessary to provide a sound long-term basis for export policy: exports must be competitive in price, and adequately profitable relative to the domestic market. The grant of subsidies to non-traditional exports, which enables them to overcome cost handicaps, does not imply that traditional exports which earn 60 per cent of visible foreign exchange receipts should be ignored just because, being more competitive, they need no subsidy. Traditional exports must be kept reasonably profitable too, even when the cream of windfall profit arising from devaluation is justiliably skimmed off through levies. The case for some reduction in export duties was valid, therefore, even before sterling devaluation made it imperative. The duty modifications announced on Tuesday last (just as we went to press) are a move in the right direction.

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