Different sections of the government have slowly been conceding the fact of adverse impact of demonetization on the economy; the latest is commerce secretary Rita Teaotia who ahead of the release of the merchandise exports data for November, has said that the country’s exports will likely face a temporary “slowdown” due to the cash crunch following the announcement of demonetisation on November 8.
She said that the demonetisation process, as has been pointed out, may cause a momentary setback (to) or momentary slowdown (in exports). She however stated that demonetisation should be viewed as an opportunity for capitalising “on the benefits that we can get from a far more transparent, far more open and far less messy cash-based transactions. She added that the commerce ministry has initiated a broader consultative process with all export promotion councils to gauge the level of adaptation to demonetisation. She pointed that the engineering sector is actually leading the reversal of the decline of exports over the last two years and has allowed us in October to register a growth of 9.6 per cent overall in the exports from India.
Merchandise exports witnessed a rise in only three of the past 23 months through October. Small and medium enterprises, who deal mostly in cash, have been particularly worried after demonetisation. India's exports are expected to reach $ 280 billion by the end of this fiscal as against $ 261.13 billion in 2015-16.