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Dear Readers,

Happy New Year. May the New Year be the year of happiness, prosperity, growth and capital creation for the generation of the wealth and employment infused with spirituality.

The 13th World Confluence of Humanity, Power, and Spirituality was greatly and largely acclaimed by people globally on the virtual platform. A galaxy of celebrated persons communicated with a large number of viewers the prime essence of spirituality for self-development, happiness, prosperity, values, self-realisation, peace, harmony, austerity, simplicity, women awakening, hard work with devotion righteously, selflessly, fearlessly for the creation and generation of wealth for self sustenance and sustenance of people globally with a mission and vision to have co-operative spirit to protect Mother Earth.

We have to discharge the duties assigned to us by keeping God in our consciousness. Life is a journey of struggle but by marching ahead with joy we can be on the path of perfection, that is, realisation and unity with the ultimate cosmic entity, God.

All enlightened souls embodied in several personalities came to serve humanity. Paramhansa Ramakrishna took on the suffering of humanity. Jesus Christ came to heal the suffering humanity.

NBFCs: It is facing the problems of cash inflow as the RBI has put the moratorium on the repayment of the borrowers whilst not putting moratorium on the lenders to them. The sector is using different regulatory windows to infuse liquidity. The sector is also looking to raise long-term debts from stable sources. It is unlikely that big NBFCs of the corporates will go for banking license.

Bharat Economy: India dropped two spots, ranking 131 among 189 countries in the 2020 Human Development Index (HDI), as reported by United Nations Development Programme (UNDP). Human Development Index is the measure of a country’s health, education, and standard of living. It does not account for the impact of Covid. Bangladesh is ranked 133, which is two ranks behind India. Approximately 8.9% of the world’s population are suffering from hunger.

The government has budgeted a 3.5% fiscal deficit for the financial year 2021, but as per expectation of the economists, it will be 7-8 % of GDP. General government debt is expected to be 90% of GDP. Corporate India sought greater flow of cheaper credit, greater coverage for exporters by the Export Credit Guarantee Corporation.

The IBC is suspended for another three months. Some sections of the IBC law need to be amended instead of suspension. Lenders should have been advised to restructure the loan instead of going for the liquidation, so that the unit can continue to contribute to the growth of the country.

The contraction of economy has narrowed down to 7.5% in the second quarter from historic dip of 23.9% in the first quarter. It is expected to be positive in the 3rd quarter. In few years it will return to the growth of 7 to 8%. The Central Bank, the RBI, said that both central and state governments need to continue with measures to boost recovery. Governments need to focus on capital expenditure instead of revenue expenditure. The latter will be only one time beneficial, but not creating wealth and generating wealth for regular benefits and employment.

The decision of the RBI to maintain an accommodative monetary policy will facilitate liquidity and better service to the people. It will also promote SMEs and small businesses and start-ups who are starving for funds. Urban cooperative banks and payment banks have also been allowed to apply for converting into small financial banks. In the rural areas, they take the position of the private lenders.

Even before Covid-19, the Indian economy was on a slow path. It has worsened after Covid-19. Negligible investment, lower exports and curtailed demand have affected the economy. Due to the impact of the Covid-19 economic activities have been disrupted.

Amongst the emerging markets, India slipped to the bottom in November. Manufacturing sectors had contraction of 39.3% in April-June quarter. It had reduced their staff sharply. Despite low turnover, the gross margin has increased for various cost cutting measures. Service sector, including hospitality, continue to suffer greatly. Forex reserves reached USD579.346 billion by December 4, 2020. While the farm sector continued to support the economy despite Covid-19, the farmers are agitating against the farm bills.

As the economy starts moving, NPAs issue will start getting resolved gradually. Banks should mobilise capital from the bull markets. All IPOs have been subscribed more than 50 times. Their prices are almost double than that of issue prices. Banks should restructure loans with moratorium extending to seven years with a simple rate of interest of 8% without fear. The entire loan will be recovered as the economy moves on the path towards peak. The government and central bank should give immunity to officers and executives for restructuring of loans and not to be viewed with suspicion. Diversion of funds to subsidiaries and new ventures should not be treated as fraud. It is to be termed as growth and expansion of business, which create and generate wealth and employment.

With more capital investment by private sectors and government, more reforms, liberation in the easing of doing business, more decriminalisation of various Acts, creating faith among wealth creators and generators, discharging duties without fear and favour, Indian economy is bound to re-bound. As per the World Economic League report, the Indian economy will emerge to the 5th position by 2025 and to the 3rd position by 2030.

Swami Vivekananda said in 1897 that India would be independent after 50 years and would be one of the largest and vibrant countries in 150 years.