Decreasing trend in growth should be major concern for the government: FIEO

February 16, 2018: Reacting to the Trade Data for the month of January, 2018, Ganesh Kumar Gupta, president, FIEO said that though we have witnessed positive growth for third time in a row, however, the rate of growth is declining month-on-month basis. Out of export growth of about 9 percent more than 6 percent has been contributed by petroleum products alone. More importantly, labour-intensive sectors like garments, carpets, handicrafts, man-made textiles are exhibiting negative growth primarily due to liquidity crunch emanating from blocking of funds in GST.

Gupta expressed his concern with the rising trade deficit, as export growth is not keeping pace with import growth, which for the month of January, 2018 also showed a growth of 26 percent against export growth of 9 percent. With this trend, the trade deficit in this fiscal will touch $150 billion.

Only 20 (as against 21 in December, 2017) out of 30 major product groups were in positive territory in December, 2017 including Petroleum, Engineering goods, Organic & Inorganic Chemicals, Drugs & Pharmaceuticals, Plantations, Plastics & Linoleum and Marine exports.

Gupta urged the government to look into the refund issues seriously by undertaking a clearance drive so as to clear all cases by 31^st March, 2018. Alternatively, banks may be asked to finance exporters against the pending GST refund claims with interest to be borne by the government.