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India enters 37-year period of demographic dividend
India enters 37-year period of demographic dividend | India News - Times of India
India enters 37-year period of demographic dividend | India News - Times of India
382% growth in digital transactions in India over the past year
Razorpay, a converged payments solution company, launched the second edition of its compelling report, ‘The Era of Rising Fintech”. It provides an in-depth study of the fast evolving Indian fintech ecosystem that is entering a new phase of innovation. The report analyses digital transactions, how businesses transact online, the impact of UPI and other game-changing industry innovations which are taking the country a step closer towards a digitally inclusive economy.
Harshil Mathur, Co-founder & CEO, Razorpay said, “India has embraced the digital transformation in a significant way. A remarkable growth of 382% in digital transactions over the past year, signifies a lot more than just business growth. This is a true testament of trust, the changing mindset of customer and business, and increased adoption of fintech innovation. UPI with 71% growth is now recognised as the de-facto mode for online payments, both by consumers and businesses and I believe it will continue to lead the way with more customised offerings and features to drive financial inclusion.
It is also interesting to note that the customer demand and innovation in digital payments for Sports events is growing, World Cup & IPL among others doubled the share of gaming industry’s contribution from 6% to 15% in the last three months.
“Fintech is transforming the way Indians transact online, not just buying and selling products and services but also consuming content and Razorpay is thrilled to be an invaluable part of this journey,” he added.
Razorpay predicts that 40% of digital payments transaction will be driven by Tier 2 businesses & consumers by 2020. In financial services, Lending will be a new growth sector in India making massive progress with 76% contribution in the last quarter, followed by the mutual funds sector. With a larger number of Indians acquiring access to financial services, the need for the government to regulate these services and the service providers also becomes of paramount importance. The company believes that frameworks like the regulatory sandbox will allow for further innovations in the fintech space, hoping the regulators will continue seeing fintech in a different light.
The company expects the government to introduce new incentives to widen digital payments in India. For India to unleash the potential of fintech in banking, collaboration and innovation between banks and fintech firms will be key in 2019. Mobile payment volume is expected to increase 10-fold by 2021. The Razorpay report also expects that 15% of India’s GDP will be flowing through digital payments by 2020.
382% growth in digital transactions in India over the past year: Razorpay report
Razorpay, a converged payments solution company, launched the second edition of its compelling report, ‘The Era of Rising Fintech”. It provides an in-depth study of the fast evolving Indian fintech ecosystem that is entering a new phase of innovation. The report analyses digital transactions, how businesses transact online, the impact of UPI and other game-changing industry innovations which are taking the country a step closer towards a digitally inclusive economy.
Harshil Mathur, Co-founder & CEO, Razorpay said, “India has embraced the digital transformation in a significant way. A remarkable growth of 382% in digital transactions over the past year, signifies a lot more than just business growth. This is a true testament of trust, the changing mindset of customer and business, and increased adoption of fintech innovation. UPI with 71% growth is now recognised as the de-facto mode for online payments, both by consumers and businesses and I believe it will continue to lead the way with more customised offerings and features to drive financial inclusion.
It is also interesting to note that the customer demand and innovation in digital payments for Sports events is growing, World Cup & IPL among others doubled the share of gaming industry’s contribution from 6% to 15% in the last three months.
“Fintech is transforming the way Indians transact online, not just buying and selling products and services but also consuming content and Razorpay is thrilled to be an invaluable part of this journey,” he added.
Razorpay predicts that 40% of digital payments transaction will be driven by Tier 2 businesses & consumers by 2020. In financial services, Lending will be a new growth sector in India making massive progress with 76% contribution in the last quarter, followed by the mutual funds sector. With a larger number of Indians acquiring access to financial services, the need for the government to regulate these services and the service providers also becomes of paramount importance. The company believes that frameworks like the regulatory sandbox will allow for further innovations in the fintech space, hoping the regulators will continue seeing fintech in a different light.
The company expects the government to introduce new incentives to widen digital payments in India. For India to unleash the potential of fintech in banking, collaboration and innovation between banks and fintech firms will be key in 2019. Mobile payment volume is expected to increase 10-fold by 2021. The Razorpay report also expects that 15% of India’s GDP will be flowing through digital payments by 2020.
382% growth in digital transactions in India over the past year: Razorpay report
Is India’s competition watchdog finally coming of age?
From probing whether Google abused its dominant position in the Android operating system space to a full-fledged investigation of e-commerce companies – India’s antitrust watchdog, the Competition Commission of India (CCI), seems to be breaking new ground on several fronts.
The latest addition to the CCI’s list of trailblazing efforts is its recent order concerning Maruti Suzuki’s discount control policy which has brought certain interesting aspects to the forefront, indicating its evolution as a watchdog.
In early July, the CCI passed a prima facie (based on first impression) order on the automobile heavyweight’s discount control policy; and directed the Director General (DG) to investigate the matter. Let’s take a quick look at what the order was about.
CCI’s Maruti Suzuki Order: The Background
The concept of an Appreciable Adverse Effect on Competition (AAEC) in the relevant market in India is central to India’s competition law. A business practice can cause an AAEC if it, among other things, creates barriers for new entrants to the market or drives existing competitors out.
When a seller or manufacturer either directly or indirectly (by way of discounts, etc.) fixes the resale price that must be charged by a downstream re-seller or dealer for its goods or services, it can violate the Competition Act, 2002 (Competition Act), if it causes or is likely to cause an AAEC. This concept of fixing the resale price of a goods or service is popularly known as Resale Price Maintenance (RPM), under competition law.
Typically, to establish that such violation has occurred, the seller or the manufacturer resorting to RPM should hold substantial market power; and the conduct in question must result in an AAEC.
Why this order is noteworthy
First, this case was taken up by the CCI suo motu (without a formal complaint) based on an anonymous e-mail against Maruti Suzuki sent by one of the automaker’s dealers (re-sellers) – this by itself is unprecedented.
The complaint alleged that Maruti Suzuki penalised dealers who provided additional discounts to customers over and above what was recommended by the automaker. Incidentally, the dealership agreements were silent on the discount control mechanism and allowed dealers the discretion to set discounts at will.
It was alleged that the entire mechanism of controlling dealer discounts was enforced by Maruti Suzuki through mystery shopping audits whereby, fake customers would pay surprise visits to inquire into dealer discounts at various stores and would report any additional discounts offered by the dealers to the company. In turn, the carmaker would issue a show cause to the dealer concerned through an e-mail. In the absence of any credible justification for providing such discount, the dealer was directed to pay a penalty by way of cheque deposits to a specified account.
The complaint also alleged that the discount control policy was implemented across India, particularly in cities where more than 4 to 5 dealers had business operations.
The second point that makes this order distinctive is the fact that the CCI appears to have employed its investigative prowess at the prima facie stage itself. Maruti Suzuki cited various clauses of the dealership agreement to show lack of authority on its part to impose penalty for providing higher discounts. It also highlighted its efforts to encourage dealers to provide additional discounts instead, by contributing to the schemes floated by the dealers.
However, the CCI disregarded the dealership agreement and decided to take a deep-dive into the actual on-field conduct of the automaker.
What this order means, going forward
The CCI is no stranger to evaluating the issue of RPM under the garb of discount policies. More recently, Hyundai Motors faced the music for implementing a similar discount control policy on its dealers through mystery shoppers.
However, this order assumes significance as it signals the coming of age of the CCI, which appears to have upped the ante by basing its findings on the actual conduct of enterprises rather than being swayed by formal agreements.
This order also encourages aggrieved persons to proactively and fearlessly approach the CCI without having to strictly follow the formal route under the Competition Act.
In conclusion, while the final fate of this order remains to be seen, it is clear that the auto space will continue to be on the CCI’s radar as a priority sector. For stakeholders, this may be an opportune moment to re-evaluate existing business practices to stay on the right side of the law.
Is India’s competition watchdog finally coming of age?
From probing whether Google abused its dominant position in the Android operating system space to a full-fledged investigation of e-commerce companies – India’s antitrust watchdog, the Competition Commission of India (CCI), seems to be breaking new ground on several fronts.
The latest addition to the CCI’s list of trailblazing efforts is its recent order concerning Maruti Suzuki’s discount control policy which has brought certain interesting aspects to the forefront, indicating its evolution as a watchdog.
In early July, the CCI passed a prima facie (based on first impression) order on the automobile heavyweight’s discount control policy; and directed the Director General (DG) to investigate the matter. Let’s take a quick look at what the order was about.
CCI’s Maruti Suzuki Order: The Background
The concept of an Appreciable Adverse Effect on Competition (AAEC) in the relevant market in India is central to India’s competition law. A business practice can cause an AAEC if it, among other things, creates barriers for new entrants to the market or drives existing competitors out.
When a seller or manufacturer either directly or indirectly (by way of discounts, etc.) fixes the resale price that must be charged by a downstream re-seller or dealer for its goods or services, it can violate the Competition Act, 2002 (Competition Act), if it causes or is likely to cause an AAEC. This concept of fixing the resale price of a goods or service is popularly known as Resale Price Maintenance (RPM), under competition law.
Typically, to establish that such violation has occurred, the seller or the manufacturer resorting to RPM should hold substantial market power; and the conduct in question must result in an AAEC.
Why this order is noteworthy
First, this case was taken up by the CCI suo motu (without a formal complaint) based on an anonymous e-mail against Maruti Suzuki sent by one of the automaker’s dealers (re-sellers) – this by itself is unprecedented.
The complaint alleged that Maruti Suzuki penalised dealers who provided additional discounts to customers over and above what was recommended by the automaker. Incidentally, the dealership agreements were silent on the discount control mechanism and allowed dealers the discretion to set discounts at will.
It was alleged that the entire mechanism of controlling dealer discounts was enforced by Maruti Suzuki through mystery shopping audits whereby, fake customers would pay surprise visits to inquire into dealer discounts at various stores and would report any additional discounts offered by the dealers to the company. In turn, the carmaker would issue a show cause to the dealer concerned through an e-mail. In the absence of any credible justification for providing such discount, the dealer was directed to pay a penalty by way of cheque deposits to a specified account.
The complaint also alleged that the discount control policy was implemented across India, particularly in cities where more than 4 to 5 dealers had business operations.
The second point that makes this order distinctive is the fact that the CCI appears to have employed its investigative prowess at the prima facie stage itself. Maruti Suzuki cited various clauses of the dealership agreement to show lack of authority on its part to impose penalty for providing higher discounts. It also highlighted its efforts to encourage dealers to provide additional discounts instead, by contributing to the schemes floated by the dealers.
However, the CCI disregarded the dealership agreement and decided to take a deep-dive into the actual on-field conduct of the automaker.
What this order means, going forward
The CCI is no stranger to evaluating the issue of RPM under the garb of discount policies. More recently, Hyundai Motors faced the music for implementing a similar discount control policy on its dealers through mystery shoppers.
However, this order assumes significance as it signals the coming of age of the CCI, which appears to have upped the ante by basing its findings on the actual conduct of enterprises rather than being swayed by formal agreements.
This order also encourages aggrieved persons to proactively and fearlessly approach the CCI without having to strictly follow the formal route under the Competition Act.
In conclusion, while the final fate of this order remains to be seen, it is clear that the auto space will continue to be on the CCI’s radar as a priority sector. For stakeholders, this may be an opportune moment to re-evaluate existing business practices to stay on the right side of the law.
Is India’s competition watchdog finally coming of age?
Inflation in India to fall with stronger rupee, lower GDP forecast, says ADB
The ADB has lowered India's GDP growth forecast for the ongoing financial year to 7 per cent. Despite the forecast, India remains the fastest-growing country in the South Asia region
BusinessToday.In
Last Updated: July 21, 2019 | 18:34 IST
The Asian Development Bank (ADB) has revised inflation outlook for India downwards by 0.2 percentage points to 4.1 per cent in FY2019 and 4.4 per cent in FY20. The development bank reduced the inflation forecast for India in the supplement to Asian Development Outlook (ADO) considering a strengthening rupee and a lower GDP growth forecast.
The ADB has lowered India's GDP growth forecast for the ongoing financial year to 7 per cent over concerns over a shortfall in fiscal out turn in 2018. Despite the decline in the forecast, India remains the fastest-growing country in the robust South Asia region, the development bank stated.
"In light of a smaller-than-expected uptick in food inflation, a strengthening Indian rupee since October 2018, and a lower GDP growth forecast, this Supplement revises down inflation forecasts for India by 0.2 percentage points to 4.1% in FY2019 and 4.4% in FY2020," ADB said.
The supplement also said that lower forecasts for India will be the primary reason behind inflation forecast for 2019 being revised down for entire South Asia. The ADB has lowered the inflation forecast for the entire region to 4.5 per cent from 4.7 per cent.
"Inflation projections for developing Asia are revised up a notch from 2.5% to 2.6% in both 2019 and 2020, reflecting higher oil prices and several domestic factors," the ADB said. The development bank referred to the continuous price fluctuations for Brent-crude oil amid various concerns affecting both supply and demand.
In the supplement, the ADB stated that the deepening trade tensions between the US and China remain the largest downward risk to the outlook. "Even as the trade conflict continues, the region is set to maintain strong but moderating growth. However, until the world's two largest economies reach agreement, uncertainty will continue to weigh on the regional outlook," said ADB Chief Economist Yasuyuki Sawada.
Inflation in India to fall with stronger rupee, lower GDP forecast, says ADB
The ADB has lowered India's GDP growth forecast for the ongoing financial year to 7 per cent. Despite the forecast, India remains the fastest-growing country in the South Asia region
BusinessToday.InLast Updated: July 21, 2019 | 18:34 IST
The Asian Development Bank (ADB) has revised inflation outlook for India downwards by 0.2 percentage points to 4.1 per cent in FY2019 and 4.4 per cent in FY20. The development bank reduced the inflation forecast for India in the supplement to Asian Development Outlook (ADO) considering a strengthening rupee and a lower GDP growth forecast.
The ADB has lowered India's GDP growth forecast for the ongoing financial year to 7 per cent over concerns over a shortfall in fiscal out turn in 2018. Despite the decline in the forecast, India remains the fastest-growing country in the robust South Asia region, the development bank stated.
"In light of a smaller-than-expected uptick in food inflation, a strengthening Indian rupee since October 2018, and a lower GDP growth forecast, this Supplement revises down inflation forecasts for India by 0.2 percentage points to 4.1% in FY2019 and 4.4% in FY2020," ADB said.
The supplement also said that lower forecasts for India will be the primary reason behind inflation forecast for 2019 being revised down for entire South Asia. The ADB has lowered the inflation forecast for the entire region to 4.5 per cent from 4.7 per cent.
"Inflation projections for developing Asia are revised up a notch from 2.5% to 2.6% in both 2019 and 2020, reflecting higher oil prices and several domestic factors," the ADB said. The development bank referred to the continuous price fluctuations for Brent-crude oil amid various concerns affecting both supply and demand.
In the supplement, the ADB stated that the deepening trade tensions between the US and China remain the largest downward risk to the outlook. "Even as the trade conflict continues, the region is set to maintain strong but moderating growth. However, until the world's two largest economies reach agreement, uncertainty will continue to weigh on the regional outlook," said ADB Chief Economist Yasuyuki Sawada.
Inflation in India to fall with stronger rupee, lower GDP forecast, says ADB
CAG demonstrates how govt relies on off-budget resources to fund deficit
The Comptroller and Auditor General (CAG) has said that the central government’s key deficit figures may be considerably higher than those stated in the union budget.
In a presentation to the 15th Finance Commission (FFC) on July 8, three days after the July 5 budget, CAG has asked whether the extra-budgetary resources accounted for in the budget reflect the correct picture. To make its point, the auditor re-calculated the fiscal deficit of 2017-18 to show that it actually works out to 5.85%. The government had reported a fiscal deficit of 3.46% that year.
India’s deficit numbers have come under sharp scrutiny as the government has been increasingly depending on off-budget borrowings to fund capital expenditure and even revenue expenditure such as food and fertiliser subsidy arrears. However, the reporting is such that the actual extent of the borrowing is unclear even to budget experts.
A July 4 government press release after the Economic Survey was tabled in Parliament said the general government (centre and states) has been on the path of fiscal consolidation and fiscal discipline. The combined fiscal deficit of the centre and states had declined from 6.4% in 2017-18 to 5.8% in 2018-19, it said and added that public finances were well aligned to the glide path to achieving fiscal deficit of 3% of GDP by 2020-21.
However, that may be tough going by the CAG’s methodology of calculating the deficit. The auditor has also found that the revenue deficit in 2017-18 was actually 3.48% of GDP and not 2.59% as reported.
ET has reviewed a copy of the CAG’s presentation. Questionnaires sent to the finance ministry, FFC and CAG on July 15 remain unanswered until now.
In a statement describing the meeting released on July 8, the FC said the issue of “fiscal transparency in the fiscal reporting of the Union and state governments was discussed especially in the light of increasing trend of off-budget and extra-budgetary resource raising by the governments”. The release, however, had not given specific numbers. The meeting discussed, among other things, “under-reporting of deficit, debt; potential risks of absence of revenue deficit as a target’’, the release said.
CAG estimated off-budget borrowings for revenue expenditure at 0.96% of GDP, and off-budget borrowings for capital expenditure at 1.43% of GDP. Adding these to the budget’s numbers causes a sharp rise in deficit figures for fiscal year 2018.
CAG’s calculations are based on including outstanding liabilities of various public sector units that borrow to cover expenditure on government programmes. These include arrears on food and fertilizer subsidies that the government hasn’t paid to PSUs such as the Food Corporation of India.
CAG also includes loans provided to beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) in FY18 by oil marketing companies. The auditor counts liabilities of Power Finance Corporation, Indian Railway Finance Corporation, National Highway Authority of India as well as off-budget borrowings for bank recapitalization in its deficit calculations.
The government’s fiscal numbers of the past couple of years are currently under intense scrutiny as economic growth has remained sluggish since the third quarter of 2016. Pointing to tax collections, member of the Prime Minister’s Economic Advisory Council and director, National Institute of Public Finance and Policy, Rathin Roy, said India was facing a silent fiscal crisis owing to a shortfall in tax revenues. “At the heart of the crisis is a shortfall in provisional tax revenues for 2018-19. It is mainly due to a shortfall in GST revenues (but also personal income tax revenues), compared to the numbers presented in the revised estimates,” he was quoted as saying.
Roy also questioned how the Centre achieved the 3.4 per cent fiscal deficit target for 2018-19. “How is this done given the stunning shortfall in the tax-GDP ratio?” he was quoted as asking.
Discussions on the nature and extent of India’s fiscal situation had come up in a mid-May meeting of the advisory council to the FFC. The issue was also discussed at RBI’s monetary policy committee (MPC) meeting in the first week of June.
Minutes of the MPC meeting available on RBI’s web site show member Chetan Ghate said, “…fiscal prestidigitation or sleight of hand may contribute to our own version of a doom-loop, i.e., by pushing expenditure off-budget to meet deficit targets and then recourse to borrowing from the national small saving fund by state entities…”.
The then deputy governor Viral Acharya, who quit soon after the MPC meeting, said, “…estimates of overall public sector borrowing requirement – which appropriately accounts for extra budgetary resources and other off-balance sheet borrowings of Central and state governments – have now reached between 8%-9% of GDP…”.
Differing with these observations, RBI governor Shaktikanta Das had said at that meeting, “…over the last few years, the Central government has by and large followed a policy of fiscal prudence. It has adhered to the fiscal deficit glide path in the last five years, though at a somewhat slower pace than committed earlier”.
Das had also argued that public sector borrowing should be “viewed differently” as most borrowings are for “capital expenditure”.
The Comptroller and Auditor General (CAG) has said that the central government’s key deficit figures may be considerably higher than those stated in the union budget.
In a presentation to the 15th Finance Commission (FFC) on July 8, three days after the July 5 budget, CAG has asked whether the extra-budgetary resources accounted for in the budget reflect the correct picture. To make its point, the auditor re-calculated the fiscal deficit of 2017-18 to show that it actually works out to 5.85%. The government had reported a fiscal deficit of 3.46% that year.
India’s deficit numbers have come under sharp scrutiny as the government has been increasingly depending on off-budget borrowings to fund capital expenditure and even revenue expenditure such as food and fertiliser subsidy arrears. However, the reporting is such that the actual extent of the borrowing is unclear even to budget experts.
A July 4 government press release after the Economic Survey was tabled in Parliament said the general government (centre and states) has been on the path of fiscal consolidation and fiscal discipline. The combined fiscal deficit of the centre and states had declined from 6.4% in 2017-18 to 5.8% in 2018-19, it said and added that public finances were well aligned to the glide path to achieving fiscal deficit of 3% of GDP by 2020-21.
However, that may be tough going by the CAG’s methodology of calculating the deficit. The auditor has also found that the revenue deficit in 2017-18 was actually 3.48% of GDP and not 2.59% as reported.
ET has reviewed a copy of the CAG’s presentation. Questionnaires sent to the finance ministry, FFC and CAG on July 15 remain unanswered until now.
In a statement describing the meeting released on July 8, the FC said the issue of “fiscal transparency in the fiscal reporting of the Union and state governments was discussed especially in the light of increasing trend of off-budget and extra-budgetary resource raising by the governments”. The release, however, had not given specific numbers. The meeting discussed, among other things, “under-reporting of deficit, debt; potential risks of absence of revenue deficit as a target’’, the release said.
CAG estimated off-budget borrowings for revenue expenditure at 0.96% of GDP, and off-budget borrowings for capital expenditure at 1.43% of GDP. Adding these to the budget’s numbers causes a sharp rise in deficit figures for fiscal year 2018.
CAG’s calculations are based on including outstanding liabilities of various public sector units that borrow to cover expenditure on government programmes. These include arrears on food and fertilizer subsidies that the government hasn’t paid to PSUs such as the Food Corporation of India.
CAG also includes loans provided to beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) in FY18 by oil marketing companies. The auditor counts liabilities of Power Finance Corporation, Indian Railway Finance Corporation, National Highway Authority of India as well as off-budget borrowings for bank recapitalization in its deficit calculations.
The government’s fiscal numbers of the past couple of years are currently under intense scrutiny as economic growth has remained sluggish since the third quarter of 2016. Pointing to tax collections, member of the Prime Minister’s Economic Advisory Council and director, National Institute of Public Finance and Policy, Rathin Roy, said India was facing a silent fiscal crisis owing to a shortfall in tax revenues. “At the heart of the crisis is a shortfall in provisional tax revenues for 2018-19. It is mainly due to a shortfall in GST revenues (but also personal income tax revenues), compared to the numbers presented in the revised estimates,” he was quoted as saying.
Roy also questioned how the Centre achieved the 3.4 per cent fiscal deficit target for 2018-19. “How is this done given the stunning shortfall in the tax-GDP ratio?” he was quoted as asking.
Discussions on the nature and extent of India’s fiscal situation had come up in a mid-May meeting of the advisory council to the FFC. The issue was also discussed at RBI’s monetary policy committee (MPC) meeting in the first week of June.
Minutes of the MPC meeting available on RBI’s web site show member Chetan Ghate said, “…fiscal prestidigitation or sleight of hand may contribute to our own version of a doom-loop, i.e., by pushing expenditure off-budget to meet deficit targets and then recourse to borrowing from the national small saving fund by state entities…”.
The then deputy governor Viral Acharya, who quit soon after the MPC meeting, said, “…estimates of overall public sector borrowing requirement – which appropriately accounts for extra budgetary resources and other off-balance sheet borrowings of Central and state governments – have now reached between 8%-9% of GDP…”.
Differing with these observations, RBI governor Shaktikanta Das had said at that meeting, “…over the last few years, the Central government has by and large followed a policy of fiscal prudence. It has adhered to the fiscal deficit glide path in the last five years, though at a somewhat slower pace than committed earlier”.
Das had also argued that public sector borrowing should be “viewed differently” as most borrowings are for “capital expenditure”.
Even I had suspected something fishy about the numbers given the fact that even with such good numbers, the economy is stagnant. I will call it the Adnai-Ambani effect. They are masters in the art of making false disclosures and hiding the true nature of their financial Health.
India Faces ‘Silent Fiscal Crisis,’ Modi Adviser Says
India is facing a silent fiscal crisis owing to a shortfall in tax revenues, and the government’s budget suggests it may have grossly underestimated the problem.
That’s the assessment of Rathin Roy, a member of the Prime Minister’s Economic Advisory Council, who said the budget presented this month won’t help fully reverse the problem in the current financial year that began April 1.
Finance Minister Nirmala Sitharaman lowered the budget deficit target for the period to 3.3% of gross domestic product from 3.4% previously, despite expectations for a stimulus to revive weak economic growth. Instead, she sought to narrow the gap by raising taxes on the wealthy, selling stakes in state-run companies and demanding more dividend from the central bank.
“At the heart of the crisis is a shortfall in tax revenues,” said Roy, who is director of the National Institute of Public Finance and Policy in New Delhi. “It is mainly due to a shortfall in GST revenues (but also personal income tax revenues), compared to the numbers presented in the revised estimates.”
The government estimates to raise 25.5 trillion rupees ($370 billion) as taxes in the current fiscal year, according to the budget document. However, estimates in the Economic Survey published separately by the Finance Ministry show that provisional tax revenue, at 20.8 trillion rupees, missed the revised estimate of 22.5 trillion rupees for the year ended March 31.
Roy separately questioned the government’s 3.4% fiscal deficit numbers for the last fiscal year, citing a revenue-GDP ratio of 8.2%, which was a full percentage point lower than the revised estimates.
“How is this done given the stunning shortfall in the tax-GDP ratio,” he asked.
@Nilgiri
The GST collections will not improve unless you lower the exemption limit from 1.5 crores to 50 lakh. The biggest tax evaders are in this bracket and they number in tens of millions.
Pakistani GDP as per their own economic survey on year ended 31st May 2019 was around $220-225 Billion and Indian Forex reserves are $428 Billions, so not $100 Billion more but almost twice.
HPE announces $500 mn investment in India; to start manufacturing by end 2019
Updated: 24 Jul 2019, 08:29 PM IST
By Nandita Mathur
Hewlett Packard Enterprise (HPE) said on Wednesday it plans to invest $500 million in India over the next five years, increrase its workforce by 20% over the next 3-5 years and start manufacturing in India by end of this year.
This investment, the company said in a statement, will enable the company to grow its operations, manufacturing and employee base in the country, increase its R&D and services exports, as well as invest in technology initiatives to drive positive change for local Indian communities.
HPE also plans to increase its workforce in India by 20% over the next three to five years. Specifically, HPE will hire new engineering talent with expertise in areas of critical importance to customers such as artificial intelligence (AI) and networking. The company will also begin construction of a high-tech extension to its Mahadevapura Campus in Bengaluru that will be able to house more than 10,000 employees, as well as state-of-the-art R&D facilities. When complete, the 1.3-million-square-foot campus will support a broad range of functions including R&D, engineering services, finance, and sales.
“Through our strategic investments in India we will continue to enhance our ability to help customers use technology to redefine experiences, improve operations and achieve their business goals," said Som Satsangi, MD, HPE India. “To deliver on that commitment, we are creating a culture for growth and innovation at HPE. Our new campus will help us to retain and attract quality talent to deliver for our customers and for the citizens of India."
HPE also plans to commence manufacturing in India. The company is scheduled to start manufacturing Aruba’s (Aruba is a unit of HPE) portfolio of mobility and internet of things (IoT) solutions in India before the end of 2019. Data and connectivity are catalysts for growth in India, and Aruba’s strong intellectual property and mobile-first philosophy make it ideally poised to facilitate this growth. The manufacturing capability in India will allow Aruba to rapidly innovate networking solutions that will deliver benefits in support of the Digital India agenda and to customers across the country.
HPE announces $500 mn investment in India; to start manufacturing by end 2019
Updated: 24 Jul 2019, 08:29 PM IST
By Nandita Mathur
- This investment, the company said in a statement, will enable the company to grow its operations, manufacturing and employee base in the country
- HPE also plans to increase its workforce in India by 20% over the next three to five years
Hewlett Packard Enterprise (HPE) said on Wednesday it plans to invest $500 million in India over the next five years, increrase its workforce by 20% over the next 3-5 years and start manufacturing in India by end of this year.
This investment, the company said in a statement, will enable the company to grow its operations, manufacturing and employee base in the country, increase its R&D and services exports, as well as invest in technology initiatives to drive positive change for local Indian communities.
HPE also plans to increase its workforce in India by 20% over the next three to five years. Specifically, HPE will hire new engineering talent with expertise in areas of critical importance to customers such as artificial intelligence (AI) and networking. The company will also begin construction of a high-tech extension to its Mahadevapura Campus in Bengaluru that will be able to house more than 10,000 employees, as well as state-of-the-art R&D facilities. When complete, the 1.3-million-square-foot campus will support a broad range of functions including R&D, engineering services, finance, and sales.
“Through our strategic investments in India we will continue to enhance our ability to help customers use technology to redefine experiences, improve operations and achieve their business goals," said Som Satsangi, MD, HPE India. “To deliver on that commitment, we are creating a culture for growth and innovation at HPE. Our new campus will help us to retain and attract quality talent to deliver for our customers and for the citizens of India."
HPE also plans to commence manufacturing in India. The company is scheduled to start manufacturing Aruba’s (Aruba is a unit of HPE) portfolio of mobility and internet of things (IoT) solutions in India before the end of 2019. Data and connectivity are catalysts for growth in India, and Aruba’s strong intellectual property and mobile-first philosophy make it ideally poised to facilitate this growth. The manufacturing capability in India will allow Aruba to rapidly innovate networking solutions that will deliver benefits in support of the Digital India agenda and to customers across the country.
HPE announces $500 mn investment in India; to start manufacturing by end 2019
India To Become The Major Export Hub Of Electronics Manufacturing: Ravi Shankar Prasad
India To Become The Major Export Hub Of Electronics Manufacturing: Ravi Shankar Prasad
India To Become The Major Export Hub Of Electronics Manufacturing: Ravi Shankar Prasad
RBI Governor Sees Positives for India Economy: Interview Transcript
Anirban Nag, Siddhartha Singh, Unni Krishnan
July 22 2019, 6:00 AM July 23 2019, 7:46 AM (Bloomberg)
Reserve Bank of India Governor Shaktikanta Das(File Photo)
-- Reserve Bank of India Governor Shaktikanta Das gave his first interview with media since taking office in December. Here’s an edited transcript of the topics he covered in the more than 50 minute interview.
On the economic slowdown and the RBI’s response :
"The accommodative stance will depend on incoming data. How inflation numbers look how the growth numbers look. Primarily how inflation looks. With regard to the slowdown, I would not give a particular timeline and it’s not possible. But overall if you see the trend, I think the fourth quarter of last year was partly a base effect and partly due to investment slowdown and demand contraction, which I had articulated in the monetary policy committee minutes. For that, so far as monetary authority is concerned, the law gives us a certain role and mandate and we have tried our best to play that role. We have reduced the policy rates by 75 basis points and we have shifted to accommodative. And shifting of the stance to accommodative itself means a rate cut of 25 basis points at least. So therefore effectively, the rate cuts has been 100 basis points if you take into account the change in stance."
On providing liquidity :
"Parallel to that we have also ensured surplus liquidity in the system. Liquidity was in deficit but at the moment for the past 1 1/2 months, the system is in liquidity surplus by more than 1 trillion rupees.
“We will ensure the banks are provided adequate funds. While the system is in surplus mode, it is possible that one or two banks may have liquidity issues. Given the role the RBI is assigned, inflation is primary target, and given due weightage to the fact that growth momentum has slowed down. For the revival, various stakeholders have to play the role."
On investment slowdown :
"There have been sectoral problems, like in the auto sector. Our survey shows that additional insurance requirements has had an impact. So every sector has had its problem. But when the world is changing you also have to change. Then there was the credit squeeze; now availability is there. The banks were unable to lend significantly, burdened with NPAs and the focus of the banks was on recovery and consolidation and not on credit. The banks are now in a better position to lend. While banks were not lending, NBFC entered their space. But for a year or so, credit flow has been affected. Another thing I would like to address the crowding out effect. It’s a good thing that the fiscal deficit has been brought down and recapitalization has been announced. Every stakeholder, the government, the private sector and the RBI are playing their role and I think things are moving in the right direction. And things should improve now."
On liquidity and NBFC problems :
"We have to constantly monitor and remain alert as the regulator and as a monetary authority. We have to analyse and review the situation. Here at the RBI, we have broad medium and long-term goals. If some issue becomes critical, not a day passes without some internal high-level review. On NBFC, not a day passed in the last several months where we don’t have a discussion or a review internally. Either on the sector or individual NBFCs. And we are monitoring the top 50 NBFCs which we have identified in terms of balance sheet size, volume of operation and in terms of governance practices and credit behavior. Our supervision teams are closely monitoring them. We are in constant interaction with the banks and it’s our endeavor to ensure a collapse of another NBFC,
especially a large one, doesn’t happen. Having said that, if NBFCs have undertaken certain governance practice and certain ways of function and they have to a price for it, they will have to pay a price for it."
On banks being proactive :
"We are in constant engagement with banks. After the June 7 circular, the banks are more enabled to resolve the crisis and stress in the individual NBFCs. Now inter-credit agreement is mandatory. Earlier it wasn’t. We have also given 30 days for review and another six months for restructuring and we are having constant engagement with the banks. So the banks, under the June 7 circular, have to play a proactive role. We are constantly in touch with large lenders to such NBFCs, including some housing finance, where we see some signs of fragility."
Consolidation in NBFCs :
"If somebody has diverted or there has been sort of ever-greening, there has been gold plating, if there has not been so diligent lending, so obviously they have to pay the price. Our effort is to segregate the way there have been lapses. Our focus is the overall system maintains stability. When I say system, it obviously includes all the major players. Therefore, our effort is to see that there is no repeat instances of systemically important large NBFC collapsing. And in the process some promoters have to make certain sacrifices, promoters have to accept haircut, the banks will have to deal with it appropriately within the parameters. One or two cases, the banks have signed inter-creditor agreements and they are resolving this crisis. The way I look at it, the responsibility is on the NBFCs themselves, to find market instruments to resolve their problems. Market instruments and the promoter has to bring in additional capital, he has to do a stake sale, he has to securitize his assets and mobilize liquidity, he has to meet debt obligations. And then the role of the lenders. We are in discussion with the lenders who have to protect their money also. They also have a parallel role to try and resolve this issue. That will also mean sacrifice on the part of the promoter also. The RBI will ensure adequate liquidity to banks."
On refinancing :
"This Refinance window or a liquidity window is a misnomer. We cannot lend money directly to one NBFC. Under the law, RBI is the lender of last resort, but we haven’t reached that situation where we invoke that particular legal provision. So RBI in today’s time cannot and would not be lending directly to NBFCs. We cannot give them clean money. It is up to the bank and depending on the collateral. We are backing up the banks. There is nothing called a liquidity window. Money is fungible, and when money is fungible having these windows, I think, is not relevant."
When will the crisis be over ?
"Difficult to say when it finishes. It’s our effort to ensure there is no contagion. It is our endeavor to ensure there is no collapse of another systematically important NBFC."
On cases of adventurism :
"There have been instances where it has happened. Some of the NBFCs have diverted. It hasn’t happened in a large scale. That is not the case. In some cases, we have noticed this has happened. A large number have encountered business failures, encountered external factors, which has impacted business models. We are coming up with a new regulatory framework. We are a work in progress. Risk management guidelines are also there for NBFCs. Now HFCs are coming under RBI, we are constantly reviewing it internally. The RBI’s endeavor is a well functioning NBFC sector and a robust regulatory framework which prevent the kind of situation we have encountered in the past year."
On the U.S.-China trade war and what it means for India :
"India is not part of the global value chain. So, U.S.-China trade tension does not impact India as much as several other economies which are part of the global value chain. Second thing is about trade tensions, it has a lowering of global growth and contraction of demand and that would in a way have a role on oil prices. Oil prices should remain low. These are the positives. In the long run, we cannot ignore lingering and prolonged tensions. It will definitely affect countries all over the world and definitely India, which is the sixth-largest economy. In the medium term also it will affect India. If it lingers, a contraction of global demand will have impact on our exports sector. We have large exports to Europe."
On RBI policy options :
“We have to only see our domestic demand continues to be robust and ensure that there is a domestic demand revival and that remains strong. We have to ensure that these opportunities arising out of the trade war, relocation of investment, India should utilize it. Irrespective of the trade war, India should become competitive both in the services and the manufacturing sector."
On the risk of dollar depreciation :
"If they depreciate their currencies, it means greater inflows. When the reversal happens we have to manage spillover effect. If excess inflow comes in, it becomes a problem to absorb excess liquidity. It’s an evolving challenge. We will continue to deal with it. We have to keep in mind, in several advanced economies, bonds yields are negative, inflation is zero. In fact in my interaction with other central bankers, they are concerned about zero or low inflation. They would like to have a slightly higher inflation. Zero interest rates prevailing for far too long, it becomes unsustainable and undermines investor sentiment. In the overall context, India is much better than most other economies."
On structural reforms :
"I don’t think the fiscal space is really the answer. If you have fiscal space any government can use. Long-term growth can be sustained by structural reforms, enhancing competitiveness, and focusing on an enabling business environment. So therefore, GST, IBC and the Niti Aayog’s committee on agriculture reforms, which will allow private investment in the farm sector and which will ensure better private investment in the farm sector and which will ensure better price to farmers for their produce, are crucial. The supply chain in the agricultural sector has to be addressed. The focus will have to be on structural reforms and improving competitiveness. Focus will have to be on continued ease of business and availability of credit at a reasonable price."
On improving growth prospects :
The RBI’s "essential role is to maintain price stability, which is defined in terms of inflation. Along with the objective of growth. Price stability is prime. It will depend on inflation, on incoming GDP. This year we have projected 7%. There was a lot of uncertainty, but now the monsoon is catching up in Tamil Nadu and Kerala. The western part had good rains and and the monsoon outlook has improved compared to what it looked about three weeks ago and oil prices are remaining in the $65 range, but then you have extraneous factors like the trade tensions, sanctions on Iran, and then you have Brexit which creates uncertain sentiments and India has a lot presence in Britain in terms of investment and exports. I would not like to specify how long it (economic slowdown) will last. India is today in a far better place than most of the major economies and India has certain inherent resilience and the signs are looking good."
On core inflation :
"Core inflation coming down, at one level, can be seen as a positive development but at another level it is reflective of a slowdown in the demand, so therefore I don’t want to make a qualitative judgement on good or bad. Based on hard numbers, we will have to take a call."
On global bond issuance :
"RBI is the debt manager. There is a process of consulting between RBI and the government."
On recapitalization funds :
"The 700 billion rupees is adequate for capital requirement but also for growth. The true test of efficiency of a public sector bank is whether they are able to access capital markets to raise additional capital. Otherwise just continuous and prolonged dependence on government capital infusion -- it can breed inefficiency. Banks need to access capital markets. There has to be competition in the banking sector. How many competitors are there in the field that the market will decide."
On interest-rate transmission :
"There is a case for banks to show better monetary policy transmission. We have to keep in mind that banks have gone through a period of crisis and they are just recovering, they are just about recovering, so that aspect has also to be kept in mind. So if you drive and ask them to fix interest rates administratively, we cannot lose sight of the fact that banks will also have to recover and comeback to a level where they are out of the woods. If we see the PCA banks have fulfilled the conditions to come, they will come."
On payments banks :
"Some are doing well. It’s a new model. It’s about two years. We are studying. We should wait a little longer how they play out."
On financial stability :
"I would like to say our primary focus -- apart from price stability and keeping the objective of growth -- it is also to ensure the stability of the financial sector, which includes banks and NBFC. And in the long run, if India has to grow and show improved growth rates, it will need a well-functioning financial sector."
©2019 Bloomberg L.P.
Read more at: RBI Governor Sees Positives for India Economy: Interview Transcript
Anirban Nag, Siddhartha Singh, Unni Krishnan
July 22 2019, 6:00 AM July 23 2019, 7:46 AM (Bloomberg)
Reserve Bank of India Governor Shaktikanta Das(File Photo)
-- Reserve Bank of India Governor Shaktikanta Das gave his first interview with media since taking office in December. Here’s an edited transcript of the topics he covered in the more than 50 minute interview.
On the economic slowdown and the RBI’s response :
"The accommodative stance will depend on incoming data. How inflation numbers look how the growth numbers look. Primarily how inflation looks. With regard to the slowdown, I would not give a particular timeline and it’s not possible. But overall if you see the trend, I think the fourth quarter of last year was partly a base effect and partly due to investment slowdown and demand contraction, which I had articulated in the monetary policy committee minutes. For that, so far as monetary authority is concerned, the law gives us a certain role and mandate and we have tried our best to play that role. We have reduced the policy rates by 75 basis points and we have shifted to accommodative. And shifting of the stance to accommodative itself means a rate cut of 25 basis points at least. So therefore effectively, the rate cuts has been 100 basis points if you take into account the change in stance."
On providing liquidity :
"Parallel to that we have also ensured surplus liquidity in the system. Liquidity was in deficit but at the moment for the past 1 1/2 months, the system is in liquidity surplus by more than 1 trillion rupees.
“We will ensure the banks are provided adequate funds. While the system is in surplus mode, it is possible that one or two banks may have liquidity issues. Given the role the RBI is assigned, inflation is primary target, and given due weightage to the fact that growth momentum has slowed down. For the revival, various stakeholders have to play the role."
On investment slowdown :
"There have been sectoral problems, like in the auto sector. Our survey shows that additional insurance requirements has had an impact. So every sector has had its problem. But when the world is changing you also have to change. Then there was the credit squeeze; now availability is there. The banks were unable to lend significantly, burdened with NPAs and the focus of the banks was on recovery and consolidation and not on credit. The banks are now in a better position to lend. While banks were not lending, NBFC entered their space. But for a year or so, credit flow has been affected. Another thing I would like to address the crowding out effect. It’s a good thing that the fiscal deficit has been brought down and recapitalization has been announced. Every stakeholder, the government, the private sector and the RBI are playing their role and I think things are moving in the right direction. And things should improve now."
On liquidity and NBFC problems :
"We have to constantly monitor and remain alert as the regulator and as a monetary authority. We have to analyse and review the situation. Here at the RBI, we have broad medium and long-term goals. If some issue becomes critical, not a day passes without some internal high-level review. On NBFC, not a day passed in the last several months where we don’t have a discussion or a review internally. Either on the sector or individual NBFCs. And we are monitoring the top 50 NBFCs which we have identified in terms of balance sheet size, volume of operation and in terms of governance practices and credit behavior. Our supervision teams are closely monitoring them. We are in constant interaction with the banks and it’s our endeavor to ensure a collapse of another NBFC,
especially a large one, doesn’t happen. Having said that, if NBFCs have undertaken certain governance practice and certain ways of function and they have to a price for it, they will have to pay a price for it."
On banks being proactive :
"We are in constant engagement with banks. After the June 7 circular, the banks are more enabled to resolve the crisis and stress in the individual NBFCs. Now inter-credit agreement is mandatory. Earlier it wasn’t. We have also given 30 days for review and another six months for restructuring and we are having constant engagement with the banks. So the banks, under the June 7 circular, have to play a proactive role. We are constantly in touch with large lenders to such NBFCs, including some housing finance, where we see some signs of fragility."
Consolidation in NBFCs :
"If somebody has diverted or there has been sort of ever-greening, there has been gold plating, if there has not been so diligent lending, so obviously they have to pay the price. Our effort is to segregate the way there have been lapses. Our focus is the overall system maintains stability. When I say system, it obviously includes all the major players. Therefore, our effort is to see that there is no repeat instances of systemically important large NBFC collapsing. And in the process some promoters have to make certain sacrifices, promoters have to accept haircut, the banks will have to deal with it appropriately within the parameters. One or two cases, the banks have signed inter-creditor agreements and they are resolving this crisis. The way I look at it, the responsibility is on the NBFCs themselves, to find market instruments to resolve their problems. Market instruments and the promoter has to bring in additional capital, he has to do a stake sale, he has to securitize his assets and mobilize liquidity, he has to meet debt obligations. And then the role of the lenders. We are in discussion with the lenders who have to protect their money also. They also have a parallel role to try and resolve this issue. That will also mean sacrifice on the part of the promoter also. The RBI will ensure adequate liquidity to banks."
On refinancing :
"This Refinance window or a liquidity window is a misnomer. We cannot lend money directly to one NBFC. Under the law, RBI is the lender of last resort, but we haven’t reached that situation where we invoke that particular legal provision. So RBI in today’s time cannot and would not be lending directly to NBFCs. We cannot give them clean money. It is up to the bank and depending on the collateral. We are backing up the banks. There is nothing called a liquidity window. Money is fungible, and when money is fungible having these windows, I think, is not relevant."
When will the crisis be over ?
"Difficult to say when it finishes. It’s our effort to ensure there is no contagion. It is our endeavor to ensure there is no collapse of another systematically important NBFC."
On cases of adventurism :
"There have been instances where it has happened. Some of the NBFCs have diverted. It hasn’t happened in a large scale. That is not the case. In some cases, we have noticed this has happened. A large number have encountered business failures, encountered external factors, which has impacted business models. We are coming up with a new regulatory framework. We are a work in progress. Risk management guidelines are also there for NBFCs. Now HFCs are coming under RBI, we are constantly reviewing it internally. The RBI’s endeavor is a well functioning NBFC sector and a robust regulatory framework which prevent the kind of situation we have encountered in the past year."
On the U.S.-China trade war and what it means for India :
"India is not part of the global value chain. So, U.S.-China trade tension does not impact India as much as several other economies which are part of the global value chain. Second thing is about trade tensions, it has a lowering of global growth and contraction of demand and that would in a way have a role on oil prices. Oil prices should remain low. These are the positives. In the long run, we cannot ignore lingering and prolonged tensions. It will definitely affect countries all over the world and definitely India, which is the sixth-largest economy. In the medium term also it will affect India. If it lingers, a contraction of global demand will have impact on our exports sector. We have large exports to Europe."
On RBI policy options :
“We have to only see our domestic demand continues to be robust and ensure that there is a domestic demand revival and that remains strong. We have to ensure that these opportunities arising out of the trade war, relocation of investment, India should utilize it. Irrespective of the trade war, India should become competitive both in the services and the manufacturing sector."
On the risk of dollar depreciation :
"If they depreciate their currencies, it means greater inflows. When the reversal happens we have to manage spillover effect. If excess inflow comes in, it becomes a problem to absorb excess liquidity. It’s an evolving challenge. We will continue to deal with it. We have to keep in mind, in several advanced economies, bonds yields are negative, inflation is zero. In fact in my interaction with other central bankers, they are concerned about zero or low inflation. They would like to have a slightly higher inflation. Zero interest rates prevailing for far too long, it becomes unsustainable and undermines investor sentiment. In the overall context, India is much better than most other economies."
On structural reforms :
"I don’t think the fiscal space is really the answer. If you have fiscal space any government can use. Long-term growth can be sustained by structural reforms, enhancing competitiveness, and focusing on an enabling business environment. So therefore, GST, IBC and the Niti Aayog’s committee on agriculture reforms, which will allow private investment in the farm sector and which will ensure better private investment in the farm sector and which will ensure better price to farmers for their produce, are crucial. The supply chain in the agricultural sector has to be addressed. The focus will have to be on structural reforms and improving competitiveness. Focus will have to be on continued ease of business and availability of credit at a reasonable price."
On improving growth prospects :
The RBI’s "essential role is to maintain price stability, which is defined in terms of inflation. Along with the objective of growth. Price stability is prime. It will depend on inflation, on incoming GDP. This year we have projected 7%. There was a lot of uncertainty, but now the monsoon is catching up in Tamil Nadu and Kerala. The western part had good rains and and the monsoon outlook has improved compared to what it looked about three weeks ago and oil prices are remaining in the $65 range, but then you have extraneous factors like the trade tensions, sanctions on Iran, and then you have Brexit which creates uncertain sentiments and India has a lot presence in Britain in terms of investment and exports. I would not like to specify how long it (economic slowdown) will last. India is today in a far better place than most of the major economies and India has certain inherent resilience and the signs are looking good."
On core inflation :
"Core inflation coming down, at one level, can be seen as a positive development but at another level it is reflective of a slowdown in the demand, so therefore I don’t want to make a qualitative judgement on good or bad. Based on hard numbers, we will have to take a call."
On global bond issuance :
"RBI is the debt manager. There is a process of consulting between RBI and the government."
On recapitalization funds :
"The 700 billion rupees is adequate for capital requirement but also for growth. The true test of efficiency of a public sector bank is whether they are able to access capital markets to raise additional capital. Otherwise just continuous and prolonged dependence on government capital infusion -- it can breed inefficiency. Banks need to access capital markets. There has to be competition in the banking sector. How many competitors are there in the field that the market will decide."
On interest-rate transmission :
"There is a case for banks to show better monetary policy transmission. We have to keep in mind that banks have gone through a period of crisis and they are just recovering, they are just about recovering, so that aspect has also to be kept in mind. So if you drive and ask them to fix interest rates administratively, we cannot lose sight of the fact that banks will also have to recover and comeback to a level where they are out of the woods. If we see the PCA banks have fulfilled the conditions to come, they will come."
On payments banks :
"Some are doing well. It’s a new model. It’s about two years. We are studying. We should wait a little longer how they play out."
On financial stability :
"I would like to say our primary focus -- apart from price stability and keeping the objective of growth -- it is also to ensure the stability of the financial sector, which includes banks and NBFC. And in the long run, if India has to grow and show improved growth rates, it will need a well-functioning financial sector."
©2019 Bloomberg L.P.
Read more at: RBI Governor Sees Positives for India Economy: Interview Transcript
India will achieve 8% plus growth from FY 2020-2021 onwards: NITI Aayog Vice Chairman
NITI Aayog Vice-Chairman Rajiv Kumar has voiced confidence that India will achieve economic growth of 8 per cent plus from fiscal year 2020-2021 onwards as structural reforms like the GST are set to produce the benefits.
by Press Trust of India
New York
July 22, 2019; 11:46 IST
NITI Aayog Vice Chairman Rajiv Kumar(File Photo)
NITI Aayog Vice-Chairman Rajiv Kumar has voiced confidence that India will achieve economic growth of 8 per cent plus from fiscal year 2020-2021 onwards as structural reforms like the GST are set to produce the benefits.
The eminent economist was in the city for the High Level Political Forum Ministerial Meeting on Sustainable Development Goals at the United Nations Headquarters. During his visit, he delivered the keynote address at the 'India Investment Seminar' held at the Consulate General of India, New York.
Kumar stressed that in the next five, the Modi government is focussed on accelerating growth from the current about seven per cent to more than eight per cent that will propel the country to easily achieving the target of becoming a five trillion dollar economy.
"I personally think that in the fiscal year 2020-2021 onwards, we will achieve higher than 8 per cent growth, (continuing) then for the next many years. It is just a fact of (growth) taking off," Kumar said.
"The foundation has been laid and the transformation has begun with the passing of structural reforms like the Goods and Services Tax, Insolvency and Bankruptcy Code. These have taken their time to settle down and now they'll produce the benefits," Kumar told PTI in an exclusive interview.
"We have the potential to grow at double digit growth rates," he said.
On the issue of job creation, Kumar emphasised that a very large number of jobs have been generated in the country in the last five years.
"If it was always a jobless growth, then that would have shown up in social strife and social tensions and surely would have meant that this government would not have been re-elected," he said, adding that the re-election of Prime Minister Narendra Modi-led government shows that there is a level of satisfaction with the government's performance.
He however acknowledged that the nature and quality of jobs is not meeting the aspirations of the country's young people and they want better quality jobs that will engage them fully.
"That has to be ensured by us improving the investment climate for domestic investors as well as foreign direct investors."
Kumar highlighted that the Union Budget, presented earlier this month, has taken big steps forward for facilitating and further improving ease of doing business by liberalising the inflows of FDI.
"This budget is a paradigm shift in saying that we will achieve accelerated growth and job generation but with the primacy of private investment. That is what our focus is - that will then generate the jobs."
Underscoring the potential in the agriculture sector, which has 43 per cent of the workforce, Kumar said investment in the agro-processing sectors and improvement in agricultural yields will help exponentially in job creation.
"Our agriculture, when it is transformed and it begins to have much higher volume of agro-processing, growth rates can easily rise from the current two per cent to four per cent," he said adding that similarly there is a lot of potential in other sectors such as manufacturing and services.
"There is a lot of potential, there were constrains which are now being removed," he said, citing the example of Labour Codes introduced in
Parliament that will simplify the whole labour compliance situation.
He said at the NITI Aayog, the most important focus is on improving private investment by improving the investment climate, accelerating growth, generating jobs, creating policies for that and at the same time ensuring through social programmes that benefits reach the bottom of the pyramid and to the last person standing in the queue.
"The reforms have been done, the network for taking the benefits of growth to the bottom of the pyramid, to the last of the queue has also been laid. The delivery mechanism has been hugely improved," he said.
Kumar said that inclusionary aspects of social programmes such as Ayushman Bharat, JAM trinity of Jan Dhan bank account, Aadhaar unique identity number and mobile phone, have been put in place.
"When growth accelerates, you will see the benefits at the bottom of the pyramid."
Kumar pointed out that efforts are also being made to promote private investment in the mine, mineral and coal sectors because otherwise the country's import dependence is increasing both for oil and gas as well as for coal even though there are huge reserves in the country.
He noted that the SDG principle of "Leaving No One Behind" finds resonance with the Government of India's motto of "Sabka Saath Sabka Vikas [Collective Efforts Inclusive Growth]", which guides all development initiatives.
"It is a proud moment to say that India has not only mainstreamed the SDGs (Sustainable Development Goals) and Agenda 2030 but is on the way to achieving some of the targets ahead of time," he said.
Kumar acknowledged that while a lot has been achieved through programmes such as Swachh Bharat Mission and Ayushman Bharat, challenges remain in a country of 1.3 billion people - from a water crisis, shortage of energy in parts of the country, pollution and need to increase female participant rates.
"In the last five years, we have laid the foundation for the benefits of growth to reach the bottom of the pyramid. In the next five years we are focussed on accelerating growth."
India will achieve 8% plus growth from FY 2020-2021 onwards: NITI Aayog Vice Chairman
NITI Aayog Vice-Chairman Rajiv Kumar has voiced confidence that India will achieve economic growth of 8 per cent plus from fiscal year 2020-2021 onwards as structural reforms like the GST are set to produce the benefits.
by Press Trust of India
New York
July 22, 2019; 11:46 IST
NITI Aayog Vice Chairman Rajiv Kumar(File Photo)
NITI Aayog Vice-Chairman Rajiv Kumar has voiced confidence that India will achieve economic growth of 8 per cent plus from fiscal year 2020-2021 onwards as structural reforms like the GST are set to produce the benefits.
The eminent economist was in the city for the High Level Political Forum Ministerial Meeting on Sustainable Development Goals at the United Nations Headquarters. During his visit, he delivered the keynote address at the 'India Investment Seminar' held at the Consulate General of India, New York.
Kumar stressed that in the next five, the Modi government is focussed on accelerating growth from the current about seven per cent to more than eight per cent that will propel the country to easily achieving the target of becoming a five trillion dollar economy.
"I personally think that in the fiscal year 2020-2021 onwards, we will achieve higher than 8 per cent growth, (continuing) then for the next many years. It is just a fact of (growth) taking off," Kumar said.
"The foundation has been laid and the transformation has begun with the passing of structural reforms like the Goods and Services Tax, Insolvency and Bankruptcy Code. These have taken their time to settle down and now they'll produce the benefits," Kumar told PTI in an exclusive interview.
"We have the potential to grow at double digit growth rates," he said.
On the issue of job creation, Kumar emphasised that a very large number of jobs have been generated in the country in the last five years.
"If it was always a jobless growth, then that would have shown up in social strife and social tensions and surely would have meant that this government would not have been re-elected," he said, adding that the re-election of Prime Minister Narendra Modi-led government shows that there is a level of satisfaction with the government's performance.
He however acknowledged that the nature and quality of jobs is not meeting the aspirations of the country's young people and they want better quality jobs that will engage them fully.
"That has to be ensured by us improving the investment climate for domestic investors as well as foreign direct investors."
Kumar highlighted that the Union Budget, presented earlier this month, has taken big steps forward for facilitating and further improving ease of doing business by liberalising the inflows of FDI.
"This budget is a paradigm shift in saying that we will achieve accelerated growth and job generation but with the primacy of private investment. That is what our focus is - that will then generate the jobs."
Underscoring the potential in the agriculture sector, which has 43 per cent of the workforce, Kumar said investment in the agro-processing sectors and improvement in agricultural yields will help exponentially in job creation.
"Our agriculture, when it is transformed and it begins to have much higher volume of agro-processing, growth rates can easily rise from the current two per cent to four per cent," he said adding that similarly there is a lot of potential in other sectors such as manufacturing and services.
"There is a lot of potential, there were constrains which are now being removed," he said, citing the example of Labour Codes introduced in
Parliament that will simplify the whole labour compliance situation.
He said at the NITI Aayog, the most important focus is on improving private investment by improving the investment climate, accelerating growth, generating jobs, creating policies for that and at the same time ensuring through social programmes that benefits reach the bottom of the pyramid and to the last person standing in the queue.
"The reforms have been done, the network for taking the benefits of growth to the bottom of the pyramid, to the last of the queue has also been laid. The delivery mechanism has been hugely improved," he said.
Kumar said that inclusionary aspects of social programmes such as Ayushman Bharat, JAM trinity of Jan Dhan bank account, Aadhaar unique identity number and mobile phone, have been put in place.
"When growth accelerates, you will see the benefits at the bottom of the pyramid."
Kumar pointed out that efforts are also being made to promote private investment in the mine, mineral and coal sectors because otherwise the country's import dependence is increasing both for oil and gas as well as for coal even though there are huge reserves in the country.
He noted that the SDG principle of "Leaving No One Behind" finds resonance with the Government of India's motto of "Sabka Saath Sabka Vikas [Collective Efforts Inclusive Growth]", which guides all development initiatives.
"It is a proud moment to say that India has not only mainstreamed the SDGs (Sustainable Development Goals) and Agenda 2030 but is on the way to achieving some of the targets ahead of time," he said.
Kumar acknowledged that while a lot has been achieved through programmes such as Swachh Bharat Mission and Ayushman Bharat, challenges remain in a country of 1.3 billion people - from a water crisis, shortage of energy in parts of the country, pollution and need to increase female participant rates.
"In the last five years, we have laid the foundation for the benefits of growth to reach the bottom of the pyramid. In the next five years we are focussed on accelerating growth."
India will achieve 8% plus growth from FY 2020-2021 onwards: NITI Aayog Vice Chairman