From The Desk of Rajesh Bajaj

Teething problem, just pass for a good!

Politics is on! And in the political vagabond many have joined to jibe Narendra Modi! Since independence de facto everybody played petty politics with their pigmy leaders & even today they are shouldering pigmy leader, who has of  no caliber! They found fresh ground as soon as they came across 2Q GDP figures & that said all about the FY2018 that to be lowered!

De facto GDP registered at 5.7% in the 1Q FY 2018 & further GDP in 2Q attained 6.5%, though GDP growth rate of FY 2018 is estimated to remain at 6.7% while 3Q & 4Q is being projected to attain 7.1% & 7.3%! No opposition is looking at de graded China, not appreciating economy even after demonetisation & implementation of GST successfully where India rating is remained firm!

Rating agency says, “The combined effect of demonetisation and introduction of goods and services tax (GST) is proving to be more disruptive for the economy than was expected earlier. While the introduction of GST cannot be faulted on account of its eventual benefit to the economy, the same cannot be said about the impact of demonetisation.”

Ind-Ra believes GDP growth will recover quarter-on-quarter in 2QFY18 with impact of demonetisation waning, teething problem arising out of GST implementation being looked into by the government and the festival season round the corner.

Apart of politics, trade-n-commerce is weaning on demonetisation, they are very positive about the right impact of GST on Indian economy! And therefore implementation & initial roll out of GST revenue collection remained courageous to the nation! Yet, a teething pain goes on!

Ind-Ra says, “The destocking by manufactures and the loss of liquidity for exporters due to delayed GST refund has affected business activities in the economy.” True! This is the real pain for exporters! Recently FIEO met Arun Jaitley with the issues of exporters including liquidity & refund cycle!

Even Shri Praveenshankar Pandya, Chairman-GJEPC have made their presentation & amplified a teething pain of gem-n-jewellery exporters & now waiting for government considering taking medication to treat Pain! GJEPC have made two sides of paining & wishing medication on two major recommendations to boost the exports of gem-n-jewellery!

Polished Diamond, de facto moves through number of hands before export & every hand, every transaction point attracts GST & this payment of GST invites cash crunch or as GJEPC said: “every transaction or dealing is leading to bottlenecks and blockage of the capital until a refund order after exports. Here one has to learn a point of cycle & this cycle is at least of four months!

GJEPC says, ‘The Colour gem stone industry, similar in character and processes as that of diamond industry, is also facing a similar situation and needs to be covered under such scheme too. And, also the availability of Gold for exporters of jewellery has become a major issue post GST announcement due to imposition of 3% GST at import level. 

The nominated agencies are providing gold to trade members with nominal commission and premium based on their expense or risk perception. This is also a hurdle for gold jewellery exporters!’ Pumping-n-pumping capital to pay GST until refund, gold hassle…slow down exports!

Not possible for every player to manage immediate payment of GST & keep halt until refund!  This pain have pushes baby to remain inactive! Many small players are shying away from exports! It is estimated about 4K Crores of capital is being blocked in initial GST cycle! If one is pushing exports once again another 4K Crores of working capital is required to pay GST until that refunds!

I think GST coordinating committee doctors have to treat this teething pain else they have to consult MD, Arun Jaitley, FM-India! Any how this pain has to be a bearable, baby should play actively & business should remain hassle free! Well they can accept recommendations that made by GJEPC!