It has been a pretty interesting time for the Indian economy. First it was demonetisation that sucked the heart out of the economy. 86% of the money in the economy was rendered illegal. Later this year the government introduced the much awaited GST which would bring taxation on an even scale around the country.
Recent economic data has revealed what was suspected. The GDP took a dive dropping by 2 % points dislodging India from the top spot as the fastest growing economy. Many claim it will be all good in the long run, but what does the average Goan Joe believe. Is he or she confident that this is just a blip on the radar.
Sandip Bhandare, GCCI President believes this is a small blip on the radar. Manufacturing, he said had undoubtedly slowed down but according to numbers which he had seen, services were improving and would continue to, in the future. Mr Bhandare said “The Make in India campaign should change the scenario. One should also not forget that the IT business has also slumped. Sales have slumped because of GST and the belief that prices had increased, which is not the case. I believe by December it will stabilise and eventually the benefits of GST will show.” He went on to say the private sector would have to play their part with investments since all the push was coming from the private sector. GST, he emphasised was a very good move.
Amit Bakhale, CEO, GoodLife which has a presence in the F&B business with Tao, Cohiba and Taverna said in a market that was depressed only the fit would survive. He said “Anyone who thinks ahead of the curve will survive. One will have to innovate to stay ahead and survive. The impact in the short term will be negative but in the long term it will be fine.” Sales he said were down by 20 to 30% and it was now a volume business and not one of value. People going to spend money at night clubs had reduced dramatically and he had no idea how and when the market would improve.
With regards to his other business in mobile phones of which he represents Samsung in the North, business was very good because the product was very good and more importantly they were priced very well against competition. He said Samsung had 60% market share in Goa which he said the brand did not have in any other part of the country. During demonetisation, dealers in the State made a killing but those days were behind time.
For several jewelers it seems the good days are behind them. Without exception all of them preferred to talk off record. A jeweler who is new to the business and is based in the north said after demonetisation business was slow for two months and now it was even but business was around 20% to 30% down with Ganesh sales equal to last year. Another jeweler in Panjim said the big ticket sales had dried up. The sales manager said “Today a sale around Rs 2 lakh is considered big, earlier we would have people walking in and buying jewelry for around Rs 6-8 lakh in cash. Earlier solitaires would sell every month and each sale totaling around Rs 8 lakh. We would sell 2or 3 every month but now, nothing.” The sale of gold coins had now stopped and the store had now stopped keeping them. The manager said the plan of the government to make it mandatory to provide pan card details for transactions over Rs 50,000 would not help matters.
Another shop that retailed jewelry and expensive watches had witnessed a dramatic drop in sales. The owner said the general perception that the imposition of GST had increased prices meant that people were staying away. Asked how long he expected the slump to continue, he said “I really don’t see an upside, I think it will remain like this or even get worse.”
Atreya Sawant, Chairman, CII Goa said demonetisation was successful to an extent and would show actual results as the government starts taking action on the data they had collected. The government, he said, would need to take more measures to keep a check on the recreation of a new black money. With regards to GST he said “it is a boon for tax payers and bane for evaders. Things will simplify once complete transition to the new system and prices will come down as the whole system becomes more efficient”.
A builder when asked about the impact just laughed and said “Units are not moving and I am stuck with it all. People are waiting and watching and I really don’t see when the situation will improve.”
Perhaps the final word should go to a dealer in groceries in Talegoa who said his customers were all still buying wheat and rice from him but quantities had dropped dramatically and he smiled and said I have watched husbands and wives fight here over basmati rice and sugar. Earlier they would not have any qualms of spending Rs 2000 but now they will not spend more than Rs 600. The sentiment is so poor. No one wants to spend because no one is sure about the general economy and more importantly their jobs.”
