Economy : Oil prices are low. Investment is almost negligible. Unemployment is highest in 45 years.
The economy needs to be pumped up as every sector from automobile to agriculture is seeing a slowdown. Rural distress has been a concern. B. K. Goenka, President - ASSOCHAM, urged the government for critical intervention by introducing a stimulus package
of ` 1 lakh crore. Other industry captains are also requesting the government to take urgent steps to infuse fresh growth momentum.
To boost the growth of the economy, the RBI has cut 35 basis points (bps) in the repo rate considering 25 basis point cut was inadequate while 50 bps was excessive. Banks are slow on passing on the benefit to their borrowers. The RBI has also reduced its GDP growth estimate to 6.9% for FY2020 from 7%. Its inflation forecast remains unchanged at 3.1% in Q2 2019-20 and 3.5-3.7% in H2 2019-20. RBI decided to raise a Bank’s exposure to a single NBFC to 20% of Tier I capital from 15%. It can be extended to 25% by the bank board. Relaxation in advance to MSMEs, personal loans and agriculture has been made.
The Modi government has taken a historic decision to abrogate Article 370 and 35A of the Constitution. It is indeed of humble pride for Bharatwasi to get their right of the part of motherland. Jammu and Kashmir has been split into two union territories, namely, Jammu & Kashmir and Ladakh. As claimed by Amit Shah, Home Minister, the action will bring normalcy in the region. There will be economic growth. People will get jobs. People will be economically benefitted. There will be single citizenship. Tri-colour will be the only flag.People from Bharat will be able to purchase land and build house and property. RTI will be applicable. People of Kashmir can also own property in Bharat. Panchayats will have the same rights as in other states. Children will have the right to education. They will have right to minority reservation. More than 42,000 innocent people lost their lives in the last three decades.
Another landmark achievement of Modi government’s second term is criminalisation of Triple Talaq, providing justice and equity to Muslim women. As far back as 1960, students of law along with others were having heated discussion on why India did not have a uniform civil code.
World : The Euro Zone’s economy grew by 0.2% in the second quarter of 2019 after growing 0.4% in the first quarter. British economy is having first contraction in seven years. Sterling falls to two and half years low. The pound has fallen more than 4.5% against the dollar since July. Threat of recession hangs over the economy.
US President Trump has further imposed 10% tariff on USD 300 billion worth imports of Chinese goods. China allowed currency to weaken in escalation of trade war with the US. The trade war can potentially take shape of a currency war. China also suspended purchase of US agricultural products. Additional tariffs would be imposed. Global stocks have tumbled in view of trade war between the US and China. The International
Energy Agency has lowered its growth forecast for oil demand for 2019 and 2020.
Terrorism in India : Naxalite terrorism was started due to hunger pangs, social torture, unemployment even of the educated. It has slowly turned to greed and other human weaknesses and further aggravated social problems. Political terrorism has also started in many states, especially in West Bengal in the form of labour unrest, cut-money and in many forms affecting viability of industries, real estate, etc. Tax terrorism is a relatively recent phenomenon. Now, government executives have been given powers for punishment on the basis of alleged violation of part of commercial and tax laws, instead of judiciary trials and verdicts. It is extremely difficult for common man/small traders/entrepreneurs/start-ups to have legal recourse as the system has become way costly. A wave of fear psychosis is being created and this is seriously affecting investments.
Many businessmen are in prison. Few have committed suicide. V. G. Siddhartha, founder of the famous Café Coffee Day chain, committed suicide. In his letter he accused the former Director General of IT department of harassment. Mohandas Pai requested the Prime Minister and Finance Minister for enquiring into the matter by a judicial and independent person. He has questioned the power of the executive to arrest and to damage the reputation of a person. There is a misuse of this power. What is the punishment to the executive for wrong action? Law does not give power for coercive action. It is the abrogation of civil justice. Tax officers do coercive tax assessment. Recourse for the assessee takes 10 to 15 years. By that time, business and economy suffer. KiranMazumdar Shaw, CMD of Biocon Ltd., has told that government needs to open dialogue with industry to help revive economic growth. She says Mr. Modi’s public promises to eliminate the ills of “Crony Capitalism” seem to have left him wary of engagement with the corporate world. As far as common man is concerned, every businessman is a crook. After Modi’s landmark victory, some businessmen were optimistic as to the revival of the economy by practical measures. Noted businessmen contributed greatly for the independence of the Nation at the risk of British ire.
Government’s aggressive target of increasing tax collections by 20% will create further pressure on officials, and instances of ‘tax terrorism’ are bound to increase. Columnist Tavleen Singh writes that more rich Indians will follow the footsteps of more than 23,000 dollar millionaires that Morgan Stanley estimates have left India since 2014. Foreign Portfolio investors pulled out about USD 5.5 billion from the stock market in July.
Stock markets: Investors have lost substantial funds
as the prices crashed due to several tax proposals, low earnings of corporate, global economic slowdown and global trade war. Foreign portfolio investors have withdrawn billions for imposition of higher surcharge. Government may roll back controversial tax measures in view of the above and job cuts. Tata Motors, M&M and others are set to slash production. Hindalco’s net has fallen by 28% on softer metal prices.
Logistics: Bharat has been developing infrastructures and logistics for movement of goods and services from rural agricultural India and manufacturing sector to the consumers and for exports and imports of raw materials. Growth of Non-Banking Financial Companies since then have contributed greatly for these developments by financing equipment to small and medium and even big contractors. They have also financed projects on BOT schemes. Yet due to multiple and complex problems, the logistics as a discipline has not yet matured and matched the standard of any advanced country. As a result, cost of products for exports and consumers remains high hurting our competitiveness. Farmers have to sell their products at lower than MSP prices. Even they have to throw perishable goods.Lots of investment is required. It can be the largest job creator by 2022. The sector currently employs more than 22 million people. The improvement in the sector can result in a 10% decrease in direct cess.
Implementation of GST has reduced truck turnaround time by approximately 18%-20%. It could further
be reduced, had there been a single GST. It is also
According to the global ranking of the World Bank’s 2018 logistics performance Index, India slipped to 42nd position from 35th in 2017. The government is working on a national integrated plan. Rivers navigation will drastically reduce the cost and create large scale employment of both the blue- and white-collared workers. In want of cold storages, warehouses, large quantity of food gets wasted every year. Long turnaround times of trucks also cause substantial wastages of food grains, dairy products, fresh vegetable and fruits. Cost of warehouses and other logistic infrastructure is very high due to cost of land, inputs, registration charges and GST.
The government must remove all the bottlenecks in the growth and development of the logistics sector so that consumers and exporters will be benefitted. This will create huge employment and will help in achieving the USD 5 trillion economy target by 2024.
Let all Bharatwasi work hard, righteously, fearlessly, selflessly for the growth of the Nation and welfare of the humanity with peace, harmony and cooperation.
Dr. H.P. Kanoria
Editor in chief
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