The current economic crisis is taking a big toll on indus tries and if corrective measures were not immediately adopted, the situation could even get worse for the country. According to a report published by Bloomberg, shortage of raw materials and a severe liquidity crunch have forced several companies to halt operations during last few months.
The critical position of foreign exchange reserves which stand at around $3.19b as of February 10 reflects miseries of the $350 billion economy struggling to fund imports as thousands of containers of supplies are stranding at its ports stalling production and putting jobs of millions of people at risk. Already some auto manufacturers have shut down their operations while fertilisers, steel and textiles are also on the same path as they grapple with an inventory shortfall. Only in textile sector, about seven million people have reportedly been laid off as many units stand closed which are now planning to shift their production abroad. It would not be wrong to say that one has not seen such an extent of shutdowns amongst listed companies. Financial experts believe that these closures will impact growth as well as increase unemployment levels in the country.
We understand liquidity problems being faced by the government yet needful should be done and that too immediately to save total collapse. We hope deal with the IMF will turn things better as it will open more sources of dollar inflows including from other financial lenders as well as friendly countries. The current crisis has brought to fore the fact of over-dependence of our industries on imported raw material. Hence, we need to pay focus on developing this capacity to meet requirements of our large scale-manufacturing sector. Doing so will not only help us save foreign exchange reserves but also go a long way in further broadening our industrial base.
It is only through enhancing productivity of our important sectors such as industries, agriculture and IT that we can enhance our exports and permanently steer the country out of current quagmire. With a focused approach and right kind of interventions, this is very much doable.