Curb will soon fall on non-essential foreign goods
The continuously falling credibility of the Indian rupee in the international market has raised lines of concern on the government's forehead. After the rupee reaching a record low against the dollar, the central government has now come into full action mode. To control the country's huge import bill, the government is preparing to crack down on the import of those foreign goods which India does not particularly need or which we can easily produce in our own country. This step will not only improve the health of the rupee, but will also prove to be a big lifeline for the manufacturing sector within the country.
The continuously falling rupee increased the heartbeats of the government.
On Tuesday, the Indian rupee closed at a new record low of 96.5 against the dollar, while on Monday this figure was at 96.34. The direct impact of this weakness of rupee can be clearly seen on the trade deficit of the country. According to official data, India's trade deficit has increased to $28.4 billion in the month of April, which was $20.7 billion in March. Amidst the slowdown in foreign investment, money going out of the country has created serious concerns regarding the balance of payments. If we keep sending more money abroad, it will have a direct and negative pressure on our entire economy, the consequences of which the common man may have to pay in the form of inflation.
Curb will soon fall on non-essential foreign goods
To take the economy out of this increasing pressure, a high level inter-ministerial meeting is going to be held next week. Top officials of many major infrastructure ministries including finance, commerce will participate in this important meeting. During this time, amidst the current crisis in West Asia, quick options to reduce the import bill and increase revenue will be seriously considered. Officials clearly say that many such products are being imported indiscriminately in the country, which are adequately produced in India only. Such non-essential imports are unnecessarily putting a heavy burden on the rupee. Considering the urgency of the situation, the government can either increase the custom duty on such goods or can directly impose some strict restrictions on their import.
Local manufacturing will get a big boost
The government's strategy is very clear that when a product can be made in the country, then why should it be imported from abroad? Recently, Commerce Minister Piyush Goyal had also given a clear message to the importers that they should avoid bringing from abroad those products which can be purchased from the domestic market only. He advised importers to explore possibilities of manufacturing in India itself. The government is now going to completely stop the entry of cheap but poor quality foreign goods. For this, all the ministries have been asked to prepare a list of those products which can be banned. Let us tell you that last week itself the government had increased the custom duty significantly to control the rising import bill of gold.
Big change will happen without stopping the supply chain
However, this entire process will not happen in a hurry. A senior official has made it clear that any new restrictions will be implemented very thoughtfully and within a stipulated time frame. Special care will be taken that it does not have any adverse impact on the critical supply chain of any essential item or domestic manufacturing. Overall, the ultimate goal of the government is to support the rupee by limiting imports. This will increase production in India itself, create new employment opportunities and give the domestic industry the momentum it desperately needs.
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