In order to discuss issues relating to exports and effects of demonetization, Commerce and Industry Minister Nirmala Sitharaman has called a meeting of export promotion councils and other sector representatives including sectors from pharmaceuticals and textiles on November 21.
After recording negative growth for about two-years, exports have started recording positive growth. The outbound shipments continued to grow for the second month in a row, expanding by 9.59 per cent to $ 23.51 billion in October on healthy growth in shipments of jewellery and engineering products. Traders are worried that the move has implications on the supply side and demonetisation would impact exporters particularly small and medium units as most of them still deal in cash.
Expressing anxieties on the development, Council of Leather Exports (CLE) Chairman Rafeeq Ahmed has said that the move to put limitations on cash withdrawal which is impacting the working capital of exporters as they have to pay cash for certain perks like overtime and extra incentives to labourers. Temporary workers too demand cash. Further, trade experts have said that the move has implications on the supply side.
On November 8, 2016, the government had declared demonetisation of Rs 500 and Rs 1,000 note and replace them with new Rs 500 and Rs 2,000 notes to curb corruption and make efforts to recover ‘black’ or unaccounted money.