It’s would be an catastrophic scenario for thousands of Indian exporters and their vendors, service providers, employees and country’s economy as at large, if the post-GST issues are not resolved in time. Mr Ganesh Kumar Gupta, President, FIEO cautioned that exporters have stopped taking orders with least or no working capital at their disposal due to blockage of funds under GST and uncertainties looming large on refunds for the months of July to October, 2017.
FIEO President reiterated that the need of the hour is an in depth sectoral analysis to pin point factors responsible for decline in such sectors to help all their employment generating, small and micro exporters. According to Mr Gupta, it is however, welcoming that the initiative of the new Commerce and Industry Minister, Mr Suresh Prabhu, to have a day-long session with Export Promotion Councils and leading exporters shortly.
The exports figure for the month of August, 2017, though showed positive growth with 26 out of 30 major product groups, were in positive territory. Engineering goods, Petroleum, Organic & Inorganic chemicals, Marine exports, Plantations, Cotton yarns, fabs & made-ups and Plastics & Linoleum were some of the sectors, which contributed impressively to the positive growth in exports during the month. “However, labour intensive sectors such as Gems and Jewellery, Leather, Apparel and Handicraft either posted negative growth or modest growth which is a worrisome sign,” observed the FIEO Chief. “While we are very encouraged by the current trend in exports, I am worried about future growth as order booking position from October onwards is not very encouraging in view of increasing global uncertainties, Rupee volatility and challenges at the domestic front,” Mr Gupta added.
Of late, there was some relief to exporters by reduction of the GST rate on scrips like MEIS/SEIS/DFIA scrips from 12 per cent to 5 per cent, decrease in threshold limit of Rs 20 lakh (Rs 10 lakh for specified States), without Registration of job worker and formation of a Committee under the Chairmanship of the Revenue Secretary to address the issues of exports sector. The Committee will provide an institutional mechanism to resolve the problem of exporters.