Vol. XXII No.3 October - December 2016

Opinion

Quaterly Newsletter of LNJ
Bhilwara Group

Editorial Team

Editor-in-Chief: Sudhir Sood

Copy Editor: U. Padma Latha

Editorial Board:

  • S.C. Garg
  • O. P. Ajmera
  • Raju Rustogi
  • Rakesh Mahajan
  • Sanjay Sharma
  • Mohit Maheshwari
  • Jyoti Gupta

 

 

 

Contact Detail

Bhilwara Towers, A-12, Sector-1,
Noida-201301, (INDIA)

Tel.:+91-120-4390300

Email : padma.latha@lnjbhilwara.com

Website : www.lnjbhilwara.com

 

© 2016 LNJ Bhilwara Group. All Right Reserved.

Group Chairman's Message

Chairman's Message

Dear All,

With the end of the last quarter of 2016, its time for us to revisit some of the recent global developments. The global economy went through another lackluster year. Of course, the reasons vary from region to region. The culprits of this slowdown include structural adjustments in many countries, efforts to reduce overcapacity, recurring natural disasters, geopolitical events — such as Brexit, the ongoing civil war in Syria, as well as heightened uncertainty related to the U.S. presidential election, and potential policy changes in the U.S. and several other major economies of the world. 

 

While the unexpected win of Donald J Trump in the Presidential elections of US caused anxiety all over the world, Shri  Narendra Modi’s unanticipated move of demonetization shook India on November 8. Meanwhile, US President Donald Trump has signaled a large self-financed fiscal stimulus, even while ultimately backtracking on major disruptive policies related to trade or immigration. Whether this will impact the Indian economy positively or negatively is of course a matter of concern for all of us.

Employment reacts quickly to changes in output, because the job market reacts to an increase in output. Weak output growth means lack of job creation. If we see the economic scenario of India just before demonetization, it was struggling with slow demand, slow investment and, consequently, slow production. The industrial output had slipped to 1.9% in October compared to an expansion of 9.9% in the same month last year and this has happened due to the decline in production of capital goods and the unimpressive performance of the manufacturing sector.

Then came the demonetization blow which led to further contraction of the economy. From manufacturing to services, all sectors of the economy were adversely affected at a time when they were already exposed to the vulnerability of the market. If the Purchase Managers' Index (PMI) of the service sector for November is any indication, there has been a sharp contraction of demand in the sector. Demonetization has adversely affected manufacturing growth because of the slowdown in production as well as domestic consumption. Manufacturing production growth lagged amid cash shortages.

The objective of transparency in financial transactions and creating a cashless economy is a good one, but this did not seem to not be in sync with the state of our economy to many. The strengths and weaknesses of our economy ought to have been taken into consideration before taking the decision.

Demonetization also acted as a speed breaker in the planned take-off of the Goods and Services Tax, the biggest piece of reform since Independence, from April 1. States that saw their revenues being affected by demonetization have stalled a consensus on supplementary legislations, and the April 1 schedule looks a tall order now.

Apart from the ups and downs in the global and the Indian economy, there has been some good news for the Indian textile industry as well. I am happy to acknowledge that among many initiatives in 2016, the Indian government announced the Rs 6,006 crore special package for the apparel sector and amended the Technology Upgradation Fund Scheme (TUFS). However, the textiles ministry is yet to announce the much-awaited National Textiles Policy, which is expected to boost prospects of the textile and apparel sector.

The Rs 6,006 crore special package for the apparel industry seeks to create one crore new jobs in three years, while attracting investments of $11 billion and at the same time garner an additional $30 billion in exports. The package also included major labour law reforms, a long-time demand of the sector.

With the coming year, there are lots of opportunities waiting for us. Let us encash all of them and move ahead as a team full of aspirations, dedication and the undying spirit to excel. Wish you all a very happy New Year 2017.

With the belief that we shall continue to scale new heights together, I wish you all the very best.

Ravi Jhunjhunwala

Editorial Team

Editor-in-Chief: Sudhir Sood

Copy Editor: U. Padma Latha

Editorial Board:

  • S.C. Garg
  • O. P. Ajmera
  • Raju Rustogi
  • Rakesh Mahajan
  • Sanjay Sharma
  • Mohit Maheshwari
  • Jyoti Gupta

 

 

 

Contact Detail

Bhilwara Towers, A-12, Sector-1,
Noida-201301, (INDIA)

Tel.:+91-120-4390300

Email : padma.latha@lnjbhilwara.com

Website : www.lnjbhilwara.com

 

© 2016 LNJ Bhilwara Group. All Right Reserved.