Tuesday, March 2, 2021

Five Trillion Dollar Economy... thoughts

 

 

India started to evolve economically majorly when pushed against the wall in 1990 and tore down the extreme socialist approach. There was a surge in reforms to uplift economy from the precarious position that India was at that junction. The pursuant economy measures of removal of license raj, liberalisation and opening of economy was a massive launch pad for the economy which was at crossroads and boosted the spirit of the businessmen and industrialists.

This started to gather momentum post 1995 where for instance HDFC bank nowhere in scene, ICICI bank and like private sector institutions like KOTAK were still nascent player or an NBFC at the most. No one would have ever imagined the scale and growth of these private sector companies who already have reached a behemoth status alongside the software and pharma industries. Telecom started to take shape. The securities trade itself was conducted physically, dematerialization and exchange trading platform was still a nonexistent. India grew and took advantage of little opportunities thrown at her under the circumstances. India grows not because of the leadership at the helm but despite any leadership and challenges.

India had never had a complete mandate at the helm.  The uniform mandate at the helm threw opportunities for the leader to press the much-needed reforms relating to land, labour, agriculture, manufacturing and industrial sector to foster growth and take ardent strides at becoming a stellar economy.

The leadership has been envisaging legislations after legislations throwing out the conventions and inducing a transparent and thriving ecosystem true to “the change is the only constant norm” adage. There is a sense of integrity and urgency in the leadership. The “Make in India” “Startup India” was an idea whose time had not yet come. But the next step like demonetization, RERA, bankruptcy code and digital push alongside Jan-Dhan and the spawning of digital wallets have kept on accentuating and more so since COVID19.

The rationalisation of the taxation on the corporate front has opened the opportunities galore but for the capital account convertibility, which can spur the FDI and take it to greater heights. There are challenges on the way. Every time there is a tad too much done unreasonable on the changes, the Indian business is intelligent enough to act in such a way to make the leadership responsible enough to make amends and lay path for next round of growth and removing hurdles, be it shortcomings in policy or growth.

An ambitious target of $ 5 trillion economy by 2025 stares at heightened difficulty and uphill task with stalling of the economy at the back drop of lockdown, never experienced hitherto. Nevertheless, the digital push and the startups, as well as established businesses who sensed opportunity have adapted their business model to make the best use of disaster recovery and shaped up themselves to the new norm of business.

Naturally, all of these play a positive role once the economy emerges out of this pandemic and the other sectors will also mushroom and herald growth alongside the new norm of conducting business. The technological advances have mustered business and outreach digitally. People from all walks of life and segments have taken to it in a big way.

The Production Linked Incentive (PLI) scheme measures and various reforms taken up recently can have a multiplier positive effect on the manufacturing sector. It is hard to imagine an economy which is flourishing without a balanced development of infrastructure, manufacturing and agricultural sector. These sectors are interdependent as well. India has made a name for itself and carved a niche in services sector.

The manufacturing and infrastructure sectors cannot contribute majorly without proper Land and Labour policies in place. India is a country with many countries within, to say the least. The diversity and the resources galore, when channelised properly only can help India gain the most coveted developed nation status. The thought process has therefore naturally progressed of late by the legislative authorities towards the unification of taxes, law, model laws for the States. These are step taken in the right direction.

The statement- Minimum Government and Maximum Governance- is necessary in spirit for the success of the country. The leadership has hit the right note recently by saying the Government has no business to be in business. It is to be seen as to how it is going to be implemented and how the handover happens. It is a rarity world over that any Government has been able to achieve welfare State measures in optimum shape in terms of even distribution of wealth amongst citizens. It is an area which should be allowed to evolve through private sector participation.

The fossil fuel usage of a developing nation alongside gold and white goods import naturally impacts and hurts, while there is no commensurate exports to the scale of imports in general years. The dynamic pricing mechanism adopted by the Government is also step in right direction but the non-uniform and exorbitant indirect taxes is bit stretched so to say, possibly it may be targeted at reducing usage and adoption of alternate channels of clean energy. However, there is a need to bolster the economy and spirits by pricing appropriately with appropriate uniform indirect taxes and avoid pushing towards higher inflation causing negative nominal growth. It would be fair to see Government treating business community nicely and allowing it function with necessary freedom to flourish and flex its wings to take a quantum leap. It is always necessary to have an approach of “Give and Take” rather than “Take and Give” for dynamic growth.

The business and public at large has to be accorded a space enough to blossom and carve a niche for themselves. There is no dearth of talent and positivity among Indians, how else can we explain the phenomenal growth and development pursuant to the opening up of the economy. The present circumstances are bolstering a new India, which is rapidly evolving in the market place and dancing to the tune of change. The change has been a growth harbinger, where the optimist sees an opportunity and a pessimist is harping on past achievements, laurels and complaining about the present challenges. It is important to develop, join hands and evolve alongside to make the most of the demographic dividend that India has, else it can turn into a nightmare post another decade.

To sum up, the 5 trillion $ economy is a natural progression which India will achieve and cross easily, the timeframe may get stretched a tad but it is important to foster a dream to bolster action towards it. It is a journey which is as important, if not more than the destination. It would be fascinating to witness how India achieves it and much more, alongside the overall development and how the public at large gain to prosper not just monetary-wise but in a myriad of ways and develop into a vibrant force to reckon in years forward.

 

 

 

 

 

Tuesday, January 5, 2021

Investment Avenue for Women .... 12th Mar 2019

 Vijay Sagar Shenoy

Chartered Accountant

author can be reached at vijaysagarshenoy@gmail.com 

Investment Avenue for Women 

Investing is an element which can come out of saving. To save, you have to spend less than you earn. What you earn works when you earn and what you save can be put to work even when you sleep. This Passive money plays pivotal role in your wealth and sometimes exceeds even what you earn. Ladies are well known as home finance manager. Then have inherent skills while managing money, they budget, spend less and save always. It is how you invest of what you save that counts. You have options like below, which you can use as a basket for investing: 1. Public Provident Fund, which if you prudently contribute maximum sum possible; it compounds phenominally. 2. National Pension Scheme- even beyond mandatory 80C limit, additional deduction of Rs. 50000 is eligible for income tax. This helps secure your retirement and also is tax efficient. It is open even for public. The income gets compounded without any loss of tax on incremental yearly accretion. 3. Equity exposure: Benefit from the spirit of entreprenuership. But it can be fraught with risks and suggest equity mutual funds as option. Get SIP option rolling and unlock the benefits of equity. 4. Fixed Deposits. Though good secure option, is not inflation hedged. 5. Debt Mutual Funds: Are tax efficient and is inflation hedged and tax efficient. 6. NSCs and Postal instruments: This also is a useful instrument for own women investors. 7. Sovereign Gold Bonds: Instead of physical gold, Gold bonds from Government fetch interest. If you have time on your hand, once redeemed you can buy gold at required timeand benefit from interest. 8. Senior Citizen Savings Scheme: For the senior citizen. 9. Sukanya Samriddhi Scheme for baby girls upto 14 years: very useful early bird investment option; which can be utilised for higher, education, Stree dhan. :saying "beleyuva siri molakeyalli" 10. Real Estate: which you use or which you get benefits from.

Investment should be thought even beyond Section 80C needs. Blindly parking money in insurance policies; mortality charges deteriorates savings. Term Insurance would do the trick for your insurance and this can be contributed even from passive income. One tip I suggest while investing Rule of 72. Divide 72 by the interest rate and you arrive at the period of time it takes to double. Never fall for the lure of high interst as it may be fraudulent one.. Albert Einstein, once said "compounding is the eighth wonder of the world". It is akin to "Hani hani goodidare halla, old Kannada proverb," which should not be ignored while investing.


Five Trillion Dollar Economy... thoughts

    India started to evolve economically majorly when pushed against the wall in 1990 and tore down the extreme socialist approach. There ...