The Indian budget every year has always been an eagerly awaited event. For many decades, the best minds in economics, finance, tax, business and industry throng the media house to analyze the provisions shared by the Financial Minister.
Sometimes major events completely disconnected may be data points for the plans of the different powers around the world. The challenge is to discern what purpose they serve? More critically, what are we moving towards?
When the US Ambassador threatened India's "Strategic Autonomy" policy over India's friendship with Russia - much more than meets the eye was at stake. Let us unpack how the Ukraine war has fundamentally changed the US and the world. And why are we here anyway?
It is fashionable to ding the Modi government for their work on Demonetization. However, apart from the ills it impacted, which we will share in a subsequent post – it has pushed the Indian economy towards two things – (1) more people under the taxability umbrella and (2) Cashless transactions rising higher.
As over 9 million new taxpayers joined the system, the percent growth in taxpayers in the country grew by 24%. Given that the future growth in the economy is predicated on growth and contemporarization of the infrastructure, it is important that Government gets more money to deliver that.
It is of course heartening to know that tax revenues are not the only source of money that the government is tapping to create the infrastructure. It is using creative financing to make that happen. Watch this interesting video of Nitin Gadkari explaining his smart ways to grow the roads and infrastructure.
Now, coming to growth in digitization and ecommerce. RBI has come out in its latest report to say that the Currency in Circulation (CIC) has fallen now to 8.8% from 12.2% which is now in line with Germany and France.
The Reserve Bank of India’s annual report for the year 2016-17 says demonetisation has helped the country’s currency in circulation (CIC) to GDP ratio compare with advanced economies like Germany and France.
Last year, the cash to GDP ratio in India was 12.2%. It came down to 8.8% by the end of March 2007 as demonetisation hit the total high value currency in circulation. The demonetisation decision announced by the government on November 8 had scrapped old high-value currency notes of Rs 500 and Rs 1000.
In the weeks following demonetisation until December 31, 2016, the RBI pumped in 23.8 billion pieces of bank notes into circulation, which was Rs 5,540 billion in value. By the end of March 2017, CIC had reached 74.3% of the peak. ”
The increase in ecommerce transactions based NOT as much on credit cards, but on Aadhaar card – those transactions are easier for rural masses to use and easier and cheaper for local merchants to implement – has meant more financial inclusion. This is over and above the inclusion brought about by the bank accounts opened for the rural.
As we move towards more stable financial structure of the economy and more inclusive growth, we are also looking at leveraging the huge potential of digitization. This can bring a multiplier impact to the economy. Towards this, let us listen to this very interesting discussion between Piyush Goyal and Ajay Banga, President and Chief Executive Officer, Mastercard, USA.
The Indian budget every year has always been an eagerly awaited event. For many decades, the best minds in economics, finance, tax, business and industry throng the media house to analyze the provisions shared by the Financial Minister.
When the US Ambassador threatened India's "Strategic Autonomy" policy over India's friendship with Russia - much more than meets the eye was at stake. Let us unpack how the Ukraine war has fundamentally changed the US and the world. And why are we here anyway?
This visit of India left me with many questions. Many observations and inputs from different people and sections. Food for thought that I have tried to contemplate on and make sense of. Sharing all that with you.
When you analyze the last 60 years of the economic miracles of Singapore, South Korea and Malaysia versus the continued impoverished Indian economy, you get very interesting lessons. Can Indians have the wherewithal in them to do in one generation so that the coming generations may rise?
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