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Dear Readers,

Market Economy: The RBI Governor, Shakti Kanta Das, has said that the growth impulses have weakened. Inflation trajectory is projected to remain below 4% throughout 2019-20. India’s share in global exports was not much. It will be affected further by the global trade tension. The United States of America (the US) has imposed import duties on India on 28 items that previously received Special Duty Benefits. Imitation jewellery, leather goods, pharma, surgical equipment, agricultural items, chemicals and plastic products will be affected. India doesn't need to enter into a trade war with the US, if it does, it will suffer more.

Monetary policy alone will not revive economic activity. Fiscal deficit target of 3.4% for 2018-19 has been met by the government. To adhere to the fiscal deficit target there was a sharp cut in government spending towards the end of the fiscal year, largely on the revenue side, which implies some schemes did not get their full allocation. Government must ensure that no compromise happens on schemes pertaining to social infrastructure sector. There’s no harm if the fiscal deficit is breached. Business Economics have been writing on these issues along similar lines as economists and financial experts.

India imported more than 80% of its crude consumption and spent in excess of USD 100 billion in 2018-19. It needs to invest in oil exploration. Exploration of coal by the private sector needs to be considered too, as India is blessed with plenty of coal reserves. Entry of private sector in coal mining can expose this sector to state-of-the-art technology, modern mine management practices and professional waste management. Production can be augmented considerably. Import of coal can be stopped after ensuring domestic exploration and supply to meet the domestic demand by the power and industry sectors.

Experts have said that arbitrary decisions taken by the tax regulatory and other authorities have restrained growth and created uncertainties in business in a meeting with the NITI Aayog. They opined that projects often got stuck because issues could be raised by any person in the chain of authority.

Clear and well thought-through policies, and not arbitrary decisions and actions are needed to address the various problems faced by India’s industry - be it in oil exploration, telecom, real estate, aviation, social sector, MSME, industries in exports sector or even liquidity shortage faced by Non-Banking Financial Companies. The RBI’s tight monetary policy was blamed for the slowdown in the growth. The Goods and Services Tax layers need to be further simplified. There is a need for both slab and rate reduction.

Prime Minister Narendra Modi has set an ambitious target of making India a USD 5 trillion economy by 2024.
The PM interacted with around 40 economists and corporate chiefs on a range of issues including micro-economy, employment, agriculture, water resources, exports, education, health and MSMEs.

President Ram Nath Kovind said that PM Modi will strive to accomplish the economy size of USD 5 trillion, make India a global manufacturing hub and simplify tax laws. Other measures include building 20 million new rural houses under the Pradhan Mantri Awas Yojana in the next 3 years, provide access to drinking water, providing credit to MSMEs, providing collateral-free loans of up to Rs. 50 lakh for entrepreneurs  and spending Rs. 25 lakh crore to raise farm yield.

Economy is estimated to grow to USD 2.97 trillion in 2019 from USD 2.04 trillion in 2014. To achieve a GDP size of USD 5 trillion by 2024, is difficult given the current scenario. The economy in India is losing traction (as admitted by the RBI Governor), private investment is negligible and a confidence crisis is looming. President Kovind has also admitted that India is no longer the fastest growing economy in the world. Collateral-free loans of Rs. 50 lakh will not boost MSMEs and trade as cost of infrastructure and overheads are high. Loan may be politically-motivated. It can become an additional burden on banks. Growth with flexible inflationis essential.

Industrialists/promoters/entrepreneurs are averse to debts. Limited liability law for corporate has lost its validity.
Loss-making corporates/entrepreneurs/promoters can be arrested on even the presumption of funds being diverted. Tax on dividend at the corporate level and in the hands of the recipient leave marginal surplus in the hands of investors for investment and survival in time of crisis and recession.

NBFCs: A special liquidity window for NBFCs is essential for their survival at this juncture. Even state-run insurers need capital infusion in view of their low solvency ratio. Over the last nine months, the NBFC sector has been facing liquidity crunch due to worries of repayment in two or three NBFCs and housing finance companies – a few bad apples have caused this turbulence. The RBI is right; it is not a shadow banking crisis, but a problem limited to a few bad eggs.
The RBI will have an optimal level of regulation and supervision so that NBFCs are financially resilient.

The RBI can look at a special purpose vehicle to lend to NBFCs on short term papers. NBFCs with a minimum net worth of Rs. 500 crore should be allowed to accept public deposits with immediate effect and NBFCs with a minimum net worth of Rs. 1,000 crore should be allowed to convert into a bank or merge with a bank. Banks should reinstate at least their existing credit lines to NBFCs with immediate effect.

NBFCs want the RBI to relax the timeline to implement the minimum LCR 60% to 25% norm by a year, i.e., from April, 2020 and progressively to 60% by April, 2024 and maintain cash thresholds to enable them to tide over liquidity problems without causing disruption to the broader financial system. Minimum LCR will create a financial burden as earnings on these will be 60-70% less than cost of funds. This will ultimately affect the MSMEs, traders, housing
finance and financing of health equipment and heavy equipment for infrastructure.

Health: Healthcare sector is under public, private and charitable management. Very few hospitals in public sector look promising. Most are in pathetic condition due to the lack of modern equipment and infrastructure. Doctors, nurses and other staffs must not be blamed. Reservation of seats in medical education and recruitment and sub-standard compensation and working conditions have been affecting the quality of service. The density of doctors is one for 1000 patients. Millions of doctors, nurses and paramedical personnel are working overseas after being compelled to leave the motherland for better quality of life. Hospitals are not properly equipped to provide services. More hospitals need to be set up.

Health sector has great potential for growth and employment - both unskilled to highly skilled. It is expected to witness a growth of USD 220 billion and a workforce of 7.4 million by 2022. Due to poverty, lack of nutritious food, modern living habits, ageing, pollution, healthcare requirements have been increasing.

According to the World Health Organisation, the incidence of depression in India is extremely high. It is at the top of the list of most depressed countries in the world. About 36% of the population is likely to suffer from depression at some time or the other. Proper treatment is also not received by the sufferers as often depression gets equated to mental
problem – such man-made social stigma is also a reason why treatment is neglected in such cases. Youngsters are even committing suicide due to depression and pressure.

Hundred years ago Saint Tulsidas had said that every creature in the world is sick of these diseases, a prey to agony and ecstasy, fear and love and bereavement. I have mentioned some of the diseases of the mind. Although everyone is suffering from them, only a few are able to detect them.

Medical education infrastructure for allopathic, ayurvedic, unani, homeopathic and naturopathy should be created by way of soft loans and subsidies. Technological progress can make a significant contribution to Bharat’s healthcare needs. Technology can be transformative in delivering healthcare service. Such an investment will reduce the cost of healthcare. India spends only 4% of its GDP on healthcare vis-a-vis the world average of 9%. Close to 75% of medical devices are imported. Return on investment is very low. Moratorium for payment for more than 10 years is required to make a greenfield hospital viable.

ESI: The ESI Authority has large idle fund over Rs. 84,000 crore. Government has reduced the contribution of employers and employees under the Employees’ State Insurance (ESI) Act to 4% from 6.5%, to make the industries more competitive and give more money in hands of employees to have little better living and to help in consumerism for growth. Labour ministry data shows 36 million workers were insured under the scheme in 2018-19, with a contribution of Rs. 22,279 crore. The ESI Act provides for medical, cash, maternity, disability and dependent benefits to the insured persons funded by the contributions made by the employers and the employees. The Employees’ State Insurance Corporation, under labour ministry, administers the scheme.

Let Bharatwasi leaders and authorities work to provide healthcare to Bharatwasi. There is no dearth of talents in Bharat.