Dear Readers,

Bharat: In 1897 Swami Vivekananda said, “My India will be independent in 50 years” and India became independent in 1947. He also said that in 150 years i.e. by the middle of the 21st century, India will be a superpower. “India is a sleeping dragon. It will rise and no power can stop it”, he said.

To this end all Bharatwasis will have to work hard with unity and discipline and would need to be spiritually awakened. Their mission and vision would be to provide food and shelter for all. Having faith in Paramahansa Sri Ramakrishna, Ma Sarada and Swami Vivekananda, PM Modi-ji will work for the glorious 21st century of Bharat along with all Bharatwasis. Bharat will remain Atmanirbhar, supporting wealth creators, generators and protectors.

International Monetary Fund (IMF) raised forecast of GDP growth of India for FY22 to 12.5% from 11.5% estimated earlier. China’s economy is seen growing 8.4% in 2021 and 5.6% in 2022. IMF expects the world’s output to grow 6% in 2021 and 4.4% in 2022. Economic Survey sees India’s real GDP growth of 11% in FY22. USA is bouncing back, meanwhile France, Germany, Italy, UK and Japan are contracting. In the emerging markets, Brazil, Russia and India are all being outpaced by China.

Tax structure needs to be simpler without any ambiguity with reasonable tax rates for better compliance and generation of more revenue. In a country of 130 crore only 1.5 crore pay income tax. Tax structures are very complicated. As World Bank reported, India’s GST is more complex with its high and multiple tax rates. India has zero tax and four slabs of tax rates (5%, 12%, 18% and 28%), while many countries have a single tax rate. Singapore tax system ensures sufficient revenue collection while promoting business and commerce and meeting social and economic objectives with simple tax structure, rules and regulations and law the country will have more revenue while the economy will blossom. 

Low structure of the tax rates will enable the masses to have natural consumption, government need not boost the consumption by giving dole to the people.

Financial: Chairman of the State Bank of India, Dinesh Kumar Khara, has said that the asset quality of banks remains healthy as reported by RBI’s Biannual Financial Stability Report (BFSR).

The quality of the assets depends upon the perception and method of calculation by  different agencies. Even the so-called good quality assets are not always properly assessed for the proper value. Different rating agencies have given India different sovereign ratings. According to ICRA ratings, gross non-performing assets of banks may worsen to 9.9-10.2% by March 31st, 2022. This will create panic amongst the bankers leading to restraint, more credit squeezes and disrupting the flow of business. Such reports can affect the goodwill of investors, wealth creators and generators.

Lenders are also sometimes assessing the good assets as non-performing assets in their zeal to mark themselves as epitome of integrity and wisdom. NBFCs which have been hurt temporarily due to COVID pandemic are unnecessarily being referred to insolvency process with the note for liquidation. Analysts at Motilal Oswal reported sign of business recovery of NBFCs. Normal business operations need to be allowed. In these uncertain conditions, default on payment obligation to lenders should not automatically trigger bankruptcy resolution. A healthy person can fall sick, but with proper medication becomes healthy again.

The RBI, in its Credit Policy, retains the national GDP growth at 10.5% for FY22. It warns of the uncertainty due to Covid-19 pandemic. It banked on government plan on infra spending and expansion in PLI (Product Linked Incentive) scheme for revival. Faster vaccination will combat Covid-19. The central bank has committed to accommodative liquidity measures till there are signs of a stable recovery. It has not changed the repo rate. The Governor of the RBI Shaktikanta Das said; “At the current juncture growth is of paramount importance while keeping the inflation within the target. The central bank should not give knee jerk reaction and will not take it either”. He said we will encourage banks to finance home, rural and business segments and extend farm credit to individual farmer. It will give more flexibility to fund management to businesses that are hit by pandemic.

Cover Story: After USA, India now has the second largest number of recorded Covid-19 cases. With more than 13.5 million recorded cases, India is now the country with the highest number of daily cases, with more than 1.5 lakh new cases each day. What is more worrying is the rising number of daily deaths.

India’s preparedness to combat the 2nd wave will surely be tested. Vaccination drive is continuously being scaled up.

Economic recovery still remains fragile and uneven. The nation needs faster vaccination. It is restricted to the people above 45 years of age except those who have co-morbidity. It is important to remember that earlier, on an average, a substantial amount of the vaccine produced have been wasted as the same could not be utilised because of ‘vaccine dilemma’ of the public. Manufacturers can produce more vaccine to cater the demand. They need funds too to boost production. Nation needs to allow vaccination of all above 30 years at least. Service sectors are more affected. Only 4% of the population of India has received one vaccine dose against 45.5% of UK and Israel’s 60.6%. Delhi has imposed 10 pm – 5 am night curfew until April 30th, Maharashtra government is contemplating full-fledged lockdown, other state governments are also working out various containment strategies.

Indian Pharma industry has supplied vaccines to 60% working population of countries like Britain, France, Germany and USA. India is trying to portray itself as generous in supplying vaccines to the world. Any sort of restrictions on the materials needed to manufacture vaccine will tremendously affect the supply and thereto humanity. As the second wave of COVID-19 cases has been rising, the government may restrict supply to other countries. Many other countries have stopped the export of vaccines. India has exported more than 60 million doses of COVID-19 vaccines to over 75 countries since January 20 this year. About 8 million were given grants by the Government of India to other countries. The Government’s exercising a tight grip on who can get vaccinated may not be the correct step at this stage of the second wave when the number of daily new cases is creating new highs. It is affecting the economy, too. India should feel proud of the success of vaccine by domestic manufacturers. Government should provide funds to them to boost the production. The Serum Institute of India (SII) has sought a ` 3000 crore grant from the government.

Nationwide lockdown imposed on March 25 last year stalled the economy. The GDP contracted 24.4% in the first quarter of FY21. Rural economy was largely insulated last time. With the stepping up of the vaccination drive, hopefully the impact of the second wave will not be so grave.  

Wealth creator and Pharma sectors have successfully developed and have been producing COVID-19 vaccines to meet the local demand and have been exporting generously.

With the creation of faith amongst wealth creators and improvement in the ease of doing and continuing business with very few clearances and time-bound deemed approvals and rare criminal action and allowing of restructuring instead of outright liquidation once a business runs into trouble and not taking unnecessarily harsh action that affects the goodwill of the business, Bharat will realise the vision of Swami Vivekananda in reality as wished by PM Modi-ji.

Businessmen have been bravely facing several external storms and an atmosphere of uncertainty in policies and regulations. They need suitable support and time for restructuring, and not liquidation. Finance Minister Nirmala Sitharaman has supported extending the Debt Service Suspension Initiative (DSSI) by six months till December 31, 2021. This is necessary for boosting support to the most vulnerable nations.

International Monetary Fund (IMF) said that debt-to-GDP ratio of India has increased from 74% to 90% during COVID-19 pandemic. Similar is the condition of corporate India, MSMEs and NBFCs. Leaders and regulators have to bear with the situation and allow India Inc. and the financial sector some breathing space and also allow them to assess external fund sources.

 


Dr. H.P. Kanoria

Editor in chief     

 

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