Following the historic announcement by Modi on November 8, 2016 on demonetization of 500/1000 rupee notes, under the 50 days window given to holders to part with them, an ex-official of Indian Forest Service [IFS], Odisha deposited Rs 1.48 crores. The bank transmitted this information to the income tax department who on juxtaposing with his I-T return for previous years found that this could not be supported by his disclosed source of income. The information was uploaded on department’s website. Concurrently, a discreet e-mail was sent to the official requesting him to visit the site and provide a suitable explanation if any, for the discrepancy. But, the official did not even bother to visit the site. This led I-T officials...
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Category: Infrastructure
Competitive populism can derail growth
Last year, Congress Vice President, Rahul Gandhi took an extensive tour of Uttar Pradesh [UP] visiting tens of thousands farmers households in the run up to assembly elections in February/March 2017 [currently underway]. During the visits, he issued a certificate [call it ‘promissory note’] to every farmer promising waiver of his/her farm loan if voted to power in the state. As the election process got kicked off early this month, he reiterated the commitment in all his speeches ad infinitum. Additionally, he has promised cut in electricity tariff by 50% and increase in price offered to farmers for their agricultural produce. In this, he is joined by Akhilesh Yadav, National President, Samajwadi Party [SP] contesting election in alliance with Congress....
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Policy rate – Patel should stop worrying about inflation
In the first monetary policy review under MPC [Monetary Policy Committee] dispensation announced on October 4, 2016, the RBI governor, Dr Urjit Patel took an accommodative stance [euphemism for ease of money supply and low interest rate] and demonstrated this by reducing policy rate [interest rate at which apex bank lends to banks] by 0.25% from extant 6.5% to 6.25%. In the second review announced on December 7, 2016, Dr Patel maintained the accommodative stance but did not translate the intent in to action as the policy rate was kept unchanged at 6.25%. This was despite inflation as measured by consumer price index [CPI] continuing its downward trajectory to 4.2% in October, 2016 and 3.63% in November, 2016. Now, in...
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Was Modi’s demonetization a flop show?
When, demonetization [scrapping of 1000/500 notes] was announced by prime minister, Modi on November 8, 2016, the expectation was that about Rs 350,000 – 400,000 crores out of a total Rs 1544,000 crores [embedded in these notes] would not come to the banks. This was taken to mean tremendous success of this policy decision. Apart from meting out sternest punishment to the hoarders of black money [all of their illegal wealth accumulated over the years would be reduced to a worthless piece of paper], this would give a bonanza to Reserve Bank of India [RBI] by way of extinguishment of its liabilities to the extent of amount not returned. Being owner of RBI, the money will eventually flow to coffers...
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Shun populism to spur development
Nearly 30 months ago, prime minister, Modi was catapulted to lead India primarily on the plank of promoting ‘development’ and eliminate ‘corruption’. He has utilized every bit of this period to over-zealously pursue these objectives; those efforts and achievements are very much visible on the ground to everybody except those [opposition parties and his die-hard critics in media and intellectual fraternity] who have a vested interest in not taking note of these. Bringing development agenda on to the center-stage is something unique to Modi – dispensation since 2014. Prior to that, for decades, successive governments [barring 6 years stint of NDA (National Democratic Alliance) – government 1998-2004 then under Vajpayee] had only harped on giving doles to the poor. Even...
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Modi’s New Year gift to the underprivileged
After a protracted wait, India has got a Prime Minister who has risen from the ranks and hails from the majority of the poor. The other redeeming feature is that PM Narendra Modi leads a party that has an absolute majority in the Lok Sabha. This makes a happy combination. It ensures that every policy decision taken by the present dispensation is guided by the overriding concerns of the poor and the common man of India and seeks to benefit them. At the same time, the absolute majority of the ruling party ensures that people-friendly legislations (for instance, the Bill giving statutory backing to the Aadhaar card) have a smooth passage in the House. Demonetisation, announced on November 8, 2016,...
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Modi’s New Year gift to under-privileged/marginalized
It is a matter of deep satisfaction that after generations, India has got a prime minister who has risen from the ranks and hails from among majority of the poor. The other redeeming thing is that he leads a party that has absolute majority in Lok Sabha [lower house of parliament]. This makes a deadly combination. It ensures that every policy decision coming from Modi is guided by the overriding concerns of the poor and the common man and seeks to benefit him. At the same time, absolute majority of BJP ensured that several people-friendly bills [for instance, bill giving statutory backing to Aadhaar card] had a smooth passage Demonetization [announced on November 8, 2016] was meant to help poor...
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Rajan’s legacy continues
Much like his predecessor, RBI Governor Urjit Patel too sees interest rate as a potent instrument of reining in inflation. In the first monetary policy review under the Monetary Policy Committee (MPC) dispensation announced on October 4, 2016, Reserve Bank of India Governor Urjit Patel had reduced the policy rate (interest rate at which RBI lends money to commercial banks) by 0.25%. He had then maintained an ‘accommodative’ policy stance thereby alluding to apex bank intent for reducing it further. However, in the second policy review announced on December 7, Patel has dashed this hope by keeping the repo rate unchanged. Concurrently, he has also revised downwards its earlier estimate of GDP for 2016-17 from 7.6% to 7.1% now factoring...
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Demonetization – myths versus reality
In the aftermath of demonetization announced by prime minister, Modi on November 8, 2016, the air resonates with a tsunami of charges/allegations regarding its alleged ill-effects. It is time to assess the credibility of these charges. The government has plundered resources of poor The resources with the poor include (i) money held by him/her in cash [notes of various denominations] or (ii) savings in bank/post office if he/she has an account. As regards (i), he got 50 days time to exchange cash held in 1000/500 denominations for new notes at banks and another 3 months at RBI. As for (ii), this money is owned by him/her and shall remain so; all that the government did was to put restriction on...
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SHEDDING TEARS FOR THE WRONG ‘VICTIMS’
A great deal of misinformation is being spread by vested interests to demonise demonetisation. Positive results of the Government’s courageous move will be seen soon A couple of days ago, Revenue Secretary Hasmukh Adhia had alluded to a good chunk of over Rs15,00,000 crore cash embodied in Rs1,000/500 notes (these were declared invalid by Prime Minister, Narendra Modi from November 8-9 midnight) coming back to the banking system. This was interpreted to mean that the ‘entire’ cash would return by December 30, when the scheme closes. Extrapolating from here, critics (opposition parties included) argue that demonetisation has been a monumental failure as there was either no black money, or that whatever existed, hoarders managed to get this converted into ‘white’....
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