Perfect Sourcing - September 2017

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SEASON OF FESTIVALS BEGINS, BUT TROUBLES CONTINUE
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.