The suspense has finally ended with the Reserve Bank of India [RBI] in its Annual Report giving details of the high denomination viz. 1000/500 currency notes in circulation [these were declared invalid on November 8, 2016 by Prime Minister Modi] that came back to the banking system and those which did not. As against Rs 1544,000 crores embodied in these currency notes as on November 8, 2016, Rs 1528,000 crores had come back leaving a meager Rs 16,000 crores in the hands of public [of these Rs 8900 crores was embedded in 1000 denomination note]. This is just about 1% of value of invalidated currency. The opposition parties especially Congress are citing this to brand demonetization as a sham. P...
More
No comments
Category: Growth & employment
Don’t permit loot in the garb of privacy
The unanimous decision of the 9 judge constitution bench of the Supreme Court [SC] pronouncing right to privacy as a fundamental right as an integral part of the Article 21 [grants the right to ‘life’ and ‘liberty’] of the Constitution has been welcome by all sections – including the union government. Prior to this, the position was vague as the founding fathers of the Constitution did not ‘explicitly’ provide for right to privacy as a fundamental right. An eight-judge bench of SC in M P Sharma’s case [1954] said so and the position was reiterated by a six-judge bench in Kharak Singh’s case in [1962]. The present decision by 9 judge bench overrules those two verdicts and lays down...
More
No comments
Corporate India – promoter has the last laugh
Less than two weeks back, Infosys – one among the top three IT companies of India [Tata Consultancy Services and Cognizant Technology Solutions being the other two] – got a big jolt when its chief executive officer [CEO] and Managing Director [MD], Vishal Sikka submitted his resignation. After being run by promoters for over three-and-a-half decade, in June, 2014, he was brought in as the first ever professional to commandeer the ship. The change was driven by the compelling need to leverage new technologies viz. data analytics, automation, cloud computing and artificial intelligence for driving growth under a competitive environment which Sikka was best positioned to do. Pertinently, his induction was orchestrated by Infosys founder and the iconic figure Narayana...
More
No comments
FDI in food retail – don’t regulate investors
Every year, farmers are forced to sell their produce especially perishable items viz. fruits and vegetables at throwaway price [quite often even destroy as the realization is not enough to cover even the cost of transporting to the mandi/market]. A major bottleneck is absence of infrastructure for handling and storage which apart from denying farmers their due also causes loss of output worth about Rs 100,000 crores annually. The problem has been festering for generations despite both the union government and states recognizing the dire need for setting up the infrastructure and umpteen committees making recommendations in this regard. Even the domestic private corporate has hardly taken any initiative in this regard. This is despite their being allowed entry in...
More
No comments
War on black money – Modi stands vindicated
Last year when on November 8, 2016 Prime Minister [PM] Modi announced demonetization of high denomination viz. 1000/500 currency notes [at Rs 1544,000 crores, these accounted for 86% of the currency in circulation], this was met with strident opposition not just from the political class but also some leading economists including former PM, Dr Manmohan Singh. The critics bombarded Modi with a tsunami of charges that included inter alia mis-appropriation of the hard earned savings of common man and using that to waive loans given to corporate big-wigs; imposition of financial emergency with persons not being allowed to withdraw money from their own account; causing unprecedented misery to the poor who was made to stand up in the queue [leading...
More
No comments
GST – cooperative federalism, at what cost
A few days back, union finance minister and chairman, GST [Goods and Services Tax] Council – all powerful constitutional body set up under the constitution amendment Act to determine the tax structure and the rates under the Act – Arun Jaitely was confronted with a question as to why we cannot have one or two rates in consonance with the global practice. Jaitely’s answer was that for India with wide disparities in incomes and majority of people living below the poverty line, ‘the tax on an item like chappal/footwear [mostly used by the poor] cannot be the same as on a luxury car which is invariably the privilege of a rich person’. Yet, he did not rule out the possibility...
More
No comments
Deceleration in bank credit – a good omen
According to the Reserve Bank of India [RBI], during the financial year 2016-17, credit growth plunged to a whopping six-decade low of 5.08 per cent as against 10.7 per cent in the previous year [as on March 31, 2017, banks’ outstanding credit was Rs. 7,501,000 crores – down from Rs. 7,881,000 crores as of April 1 2016]. This is the lowest since 1953-54 when it had inched up by a paltry 1.7 per cent. Critics including former finance minister, P Chidambaram under UPA – dispensation cite low credit growth in support of their contention that the economy is not doing well. They have even used this to question high GDP [gross domestic product] growth data churned out by Modi – government viz. 7.1%...
More
No comments
Aadhaar – citizens’ welfare versus privacy
Even as Modi – dispensation is pulling all stops to deliver good governance, a major stumbling bloc is intervention by the judiciary; courtesy, a spate of PILs [public interest litigation] on almost every issue that concerns administration and delivery of public services. Unlike the executive where once a decision is taken, it gets implemented within a given time frame [under present government, things are happening in a fast track mode], any matter coming to the court for its decision inevitably gets delayed. A case in point is use of Aadhaar for dispensing various services. The Unique Identification Authority of India (UIDAI), established by UPA – II in 2009, issues Aadhaar cards to the citizens. Under the scheme, every citizen is...
More
No comments
ONGC-HPCL deal – milching in garb of merger
The Cabinet Committee on Economic Affairs [CCEA] has taken an in-principle decision to divest 51% of Union Government’s shareholding in Hindustan Petroleum Corporation Limited [HPCL] – a downstream central public sector undertaking [PSU] – in favor of Oil and Natural Gas Corporation [ONGC] – a PSU in upstream segment. A group of ministers [GOM] under finance minister, Arun Jaitely has been set up to work out the modalities. The merger is expected to be completed within the current year. The decision is a follow-up of the announcement by Jaitley in his budget speech for 2017-18 to create 2 or 3 integrated oil and gas companies by merging existing PSUs which can compete with energy majors in the private sector –...
More
No comments
FDI in retail – go for ‘holistic’ reforms
In budget for 2016-17, the finance minister had announced 100% foreign direct investment [FDI] in food retail subject to retailer selling only food procured from farmers in India and processed locally. After wait for more than a year, the government has now approved an application of Amazon.in for 100% FDI in food retail chain – both on-line sales [e-commerce] and offline [brick-and-mortar]. While, this may signal big boost to reform and liberalization in regard to FDI in retail, the cobweb of policy maze seems to be getting murkier. At the outset, a few words on how the policy dispensation has unfolded over the last decade or so. For the purpose of FDI, the government has classified retail in two broad...
More
No comments