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Dear Readers,

Bharat’s Economy: For achieving the target of an economy size of USD 5 trillion by 2024 as envisaged by the government, massive investment is essential. Bharatwasi have to learn from history. After the world wars, Japan, Germany and other nations had promoted investment ignoring source and resources of funds. Criminalisation of commercial transaction and aspect of business/commerce have virtually killed the appetite for entrepreneurship. Entrepreneurs take great risks by putting their own little funds (whatever they have), friends’ and relatives’ funds and borrowed funds into their ventures. There is no guarantee, even God does not ensure that enterprise will be successful and even for those which succeed there is no guarantee that they will continue to be successful. Global history attests this fact. 

Government’s own several enterprises have failed. Many are bleeding despite best control and having talented people in the management. Government had parted with many and will part with many, suffering substantial losses of capital and debts. Government is on a spree of disinvestment, not investment. A portion of RBI’s surplus reserves will be transferred to the government’s kitty in a phased manner. Will it use it for productive investments or to reduce or maintain the target fiscal deficit?

Government’s plan to grow into a USD 5 trillion economy by 2024 is also about having social capital for providing electricity, housing and cooking gas to the poor. The power sector is ailing. More than Rs. 5 lakh crore represent stressed assets. Why? That’s because of the failure of the government to ensure regular supply of coal at the reasonable rates by Coal lndia with all, using private power sector to distribute electricity at much lesser price than Government agencies and instances of irregular and untimely payments by Government agencies. Housing sector is also ailing. There are over 15 lakh sq. ft. built up areas that remain unsold. Tax is about 15%. Land is costly. Government is planning to release public sector units’ lands for affordable housing. Housing finance companies are in crisis due to non-payment of loans and other factors.

Prime Minister Modi’s government wants to have structural change in the economy and spread prosperity to the people. To achieve this, reviving economic growth with investments should be the top most priority. Taxing the rich is a very narrow approach towards resource mobilisation with a higher rate of tax leaving with them insignificant money to serve the family, high debts and investments. With unemployment at a 45-year high, it would be prudent to incentivise the rich towards making investments. Instead, if they get taxed more and more, not only will they stop investing here, they may even consider relocating to friendly tax regimes and start investing there. That can only make our country poorer. One should never kill the goose that lays the golden eggs. Doles to people will not bring prosperity. They must be empowered and energised to work their way up in life. As Swami Vivekananda said that even the world’s entire wealth will not eradicate the poverty of one village. Most tax proposals put forth by the Finance Minister are not investor-friendly and will further reduce investments. Even small investors have lost confidence substantially. The capital market lost over Rs. 5.61 lakh crore in market valuation in just two trading sessions in July. Pledged shares’ values have fallen sharply. Bankers are pressing for margins. If margins are not provided, they sell in the market debiting the losses to the loan account. If such value destruction continues, the USD 5 trillion economy by 2024 will only remain a pipedream. At the same time, absence of skilled manpower, high cost of development, limited or no access to finance are also emerging as major impediments to growth.

Government plans to boost consumption for the growth of economy. But is there enough purchasing power? Both rich and poor are paying more taxes. Poor pay more taxes indirectly because of hike in fuel taxes and G.S.T.

Government is on a drive to ensure Digital India. About 65% of population is illiterate, but they are also learning mobile applications, may be due to their native wisdom. Approximately 90% of mobile time is spent on apps. Apps are being used for services like calling plumber, taxis, carpenter, using entertainment, using spiritual messages and scriptures, inspiring stories, skill development, health and success tips, advertising and so on. India’s app economy is growing very fast. India overtook the US as the world’s second biggest market in app downloads with 12.1 billion downloads. India will have 37.2 billion downloads a year by 2022, a growth rate of 207% as forecasted by App Annie, a research centre for app-based activities. The subsidised 4G data and cheap smartphones from China have been promoting the app economy. More than 60% of the population is expected to own smartphone by 2022.

Since Feb 2017 Pradhan Mantri Gramin Digital Saksharta Abhiyan is being executed by PMGDISHA with an outlay of Rs. 2351.38 crore with the objective of making six crore rural households digitally literate. This will promote more users of apps. There were 30% women users of internet and 62% of internet users in urban areas.         

After three years of commercial operations, Reliance Jio now leads the Indian telecom sector with highest number of users on its network. Reliance Jio, now catering to 331 million users, above Vodafone Idea, as well as Airtel. Reliance Jio acquired a mind-boggling 177 million users in less than 18 months. In financial year 2018-2019, Reliance’s revenue is mostly from Jio. Refinery has contributed lesser revenue due to thin refining margin and rising crude oil price. Airtel and Idea-Vodafone have been having a tough time to remain economically viable in competition with Jio, though they have also cut tariff drastically to match with Jio’s tariff. But it is volume that matters. According to report by Open Signal Dazein, more than 50 large cities in India had more than 80% 4G coverage as on January 2019.

E-marketer predicts that mobile ad spend will increase from over USD 1.96 billion now to USD 2.8 billion in 2021. 80% are in apps as opposed to mobile web. App intelligence firm Sensor Tower reveals that India installed 4.5 billion apps in the first quarter of 2019, ahead of the US. While use of apps is on the rise, a negative fallout of this is the growing app-addiction of the masses, especially the youth, resulting in a fall in their productivity. The addiction has gone to such an extent that even family members are busy with their smartphones during their free time, resulting in lesser spending of quality time and interactions among family members. Family bonds of love and peace are being disturbed.                                                                                                                        

Bharat was glorified by the launching of its second moon mission on July 22. 2019. The moon landing is scheduled for September 6/7. For the first time, two women namely, Ritu Karidhal and Muthayya Vanitha are leading the mission.

Bharat’s rich need to invest wealth for generation of wealth and employment for the inclusive and sustainable growth. But they need a fearless environment for doing so. Let Lord Krishna bless our policy-makers with the wisdom to create an investor-friendly Bharat. Stagnant money will not be good. In the Vedas, God calls to Bharatwasi to be trustee of wealth and not tax people heavily, not create an army of idle people, and to live a life of simplicity and austerity. Our policy-makers must learn from this simple yet profound piece of wisdom from the Vedas.