This is not an easy task. QRs cover about 25 per cent of the 11,000 or so tariff lines. Most QRs bar consumer goods. To take advantage of QR removal, premium goods like edible oil and select petroleum products will have to be brought under special import licence (SIL) in support of export growth. (This will also perk up the premium for SIL). The issue is thus one of getting priorities right. Even so, many consumer goods will have to be taken off QRs and brought under the tariff regime.

The finance minister has fixed the ceiling on import tariff at 40 per cent. This may appear high. But consumer goods supplies from abroad are oftencheap: garment prices, for example, fall after Christmas; and items of a slightly dated model (of cameras, PCs, etc) are disposed of at throwaway prices. Thus, even with a high import duty, domestic manufacturers of such items will face stiff competition. But too much should not be made of the domestic manufacturers' weakness. Especially during the last three years, the domestic market has seen a rise in supply relative to demand.

Manufacturers have learnt to survive in a competitive environment. One issue Ramakrishna Hegde's exim policy must address is the poor administrative infrastructure that exporters have to contend with. Both customs and income tax officials do their best to put as many hurdles against exporters as possible. What is required is an effective and quick grievance redressal system. This will be especially necessary if the duty drawback as also the duty entitlement passbook schemes are is to be rationalised. (The case for this is strong in view of the glaring abuse of drawbacks viabogus exports that has come to light).

A lackadaisical view is taken of sluggish export growth, thanks to the comfortable foreign currency reserves. Policy must identify thrust areas. The expectation is that Hegde will provide special incentives to exports of software, and to forex earning industries like printing, tourism, hotels and other services. The problem area is the lack of bounce in exports of manufactures. The pat solution is to let the rupee slide. But how? The US dollar quotes in the hawala market at a nominal discount to the official exchange rate!