We are now in the last quarter of the year and despite all odds, everyone is still fighting strong. Post demonetisation and GST, the business environment has undeniably been affected and chaos rules the market. Right from yarn to garmenting, every individual in the supply chain seems confused about the new taxation system.
If we talk about exporters, their immediate and palpable concern is duty drawback rates, which are on the verge of a drastic decline, as a result of which they are not thinking of adding capacities but just focussing on sustaining themselves. This in turn has impacted machinery importers who are not getting orders for new machinery. According to them, only those exporters who are in middle of expansion are buying and there too, payment delay is rampant. Private sector investment has collapsed and the economy is running on just the one engine of public spending. The most worrisome aspect of all this disarray is the impact on job creation. Jobs have been extremely hard to come by for the youth of the nation. The engine that was running at full steam has suddenly lost pace, which is clearly reflected in the drop in GDP.
The Indian economy advanced 6.1 percent year-on-year in the first quarter of 2017, slowing sharply from a 7 percent expansion in the previous period and well below market expectations of 7.1 percent. It is the lowest growth rate since the last quarter of 2014, due to a slowdown in consumer spending and a drop in investment, following the demonetisation programme of November 2016 that removed 86 percent of India’s currency in circulation in one fell swoop.
On the one hand, the Make in India initiative is being bruited about, but, on the other, the slow pace of business is a major concern for most entrepreneurs who are trying to resolve the conundrum of managing business.
I strongly believe that the new taxation policy will reap benefits in the long future; its immediate impact is regrettably causing a disruption in the supply chain and many small and medium manufacturers plan to shut shop.
In this issue, we talk about Jaipur, which is a progressive cluster and which is growing rapidly because of its growing importance in both the export and domestic markets. Most exporters are now moving towards technology enhancement and are working towards building compliant and state of the art factories.
Apart from that, you will also read about labour wages that have been seeing a lot of fluctuation, the impact of GST on the sector, a comparative analysis between sublimation and digital print and interactions from recently concluded seminars and events.
The next issue will highlight the new technologies that will be unveiled at CISMA, Shanghai. The exhibition is one of the truly important platforms for the industry, especially because innovations are launched primarily at this event in the sewing, embroidery, cutting and finishing departments, all of which are of immediate concern to us.
I hope you will enjoy reading the issue and will share your feedback on the same.