Budget 2023/24 – Foundation for Vishwa guru Bharat

Gopal Krishna Agarwal,

The last full-fledged budget before the general elections next year has resisted to be a populist budget and the Government must be applauded for it. It takes confidence and commitment to stick to the fundamentals of prudent book-keeping when it makes complete sense to go all out political. This attribute, which was also visible during the ‘Aatmanirbhar Bharat’ package in the wake of Covid – 19 crisis, will keep the economy on an even keel.

When the global economies are reeling under inflation and being sucked into recessionary cycle, India continues to be an outlier with manageable inflation, high GDP growth rate and well calibrated fiscal consolidation glide path. The difference of Modi Government’s approach to balance the macroeconomic challenges of fighting recession, controlling inflation and meeting fiscal deficit consolidation target is very much evident in budget 2023-24.

A major achievement of the Government has been its management of fiscal affairs. Several challenges on macro-economic front that stemmed from external factors and were unseen at the time of presentation of budget last year unfolded as the year rolled by. The actual expenditure on food and fertilizer subsidy for the current year is much more than was initially budgeted while the excise tax collected had to come down due to energy price relief provided to the consumers. Despite this Modi Government has managed to adhere to the budgeted target of 6.4 percent for fiscal deficit for the year 2022-23. The fiscal deficit target for the coming financial year has been put at 5.9 percent of the GDP. Thus the march on the path of fiscal consolidation continues and the Government has committed to bring it down in the range of 4.5 percent by the year 2025-26.

The highlight of 2023-24 budget undoubtedly has to be the increased allocation for capital expenditure which has been increased by 33 percent to Rs 10 lakh crore. Anyone, familiar with the concept of ‘multiplier effect’ of expenditure would know that government Capex has a much bigger effect on the economy than government or private consumption expenditure. After two consecutive years of increase in government Capex, the Government would have stepped off the accelerator, but, the increase in Capex under this context is really heart-warming.

The Economy Deplomacy Is a Key To Enhancing Nepal – India Relation

Gopal Krishna Agrawal,

Gopal Krishna Agrawal is the National Spokesperson on Economic Affairs for ruling Bhartiya Janata Party of India. How does he see Nepal-India economic relations? How can this relation be enhanced? Mahavir Paudyal and Kosh Raj Koirala spoke to him on Nepal-India economic ties and other aspects of bilateral relations while he was in Kathmandu last week.

How do you see the current status of Nepal-India relations?

We are working on making Nepal-India relations much better than what it is today. Nepal is very important country for India’s international relations. This is why Prime Minister Narendra Modi visited Nepal right after assuming office in 2014. We find so many common issues with regard to economy between Nepal and India. Thus we can have a very good business and economic relations. Economic relations are much important for these countries because economic relations are becoming more important between and among the countries across the whole world. Economic issues can be more easily identified and they are as easier to resolve because they are based on give and take and mutual benefits. There will be few contentions in business relations than would be with political relations. You say so but Nepal has had huge trade deficit with India. 

I was recently speaking on foreign direct investment issue here in Nepal. Across the world, every country is looking to attract more FDI.  FDI is one of the criteria which decide what will be the future of country’s economy. It is important for capital formation and building of infrastructures. India has been successful in attracting huge FDI over the last few years. We have been able to get 62 billion dollars of FDI, which is the highest FDI across the world.  But a country cannot raise FDI rate simply by asking others to come and invest. Most of such investments come from the private sector. And private investment comes to those places where you have strong regulatory bodies.  They look into which regulatory set ups are there that can come to their aid when something goes wrong with business. Foreigners are ready to invest in India because we have strong and autonomous set ups in many of the fields such as banking, capital market, insurance, telecommunications etc. For each of these sectors, we have a separate regulatory body to boost the confidence of the investors.

Thus the more you build autonomous and independent regulatory institutions the more it will raise confidence of foreign investors. And the more you will be able to attract FDI. I think this applies to Nepal as much it does to India. 

The importance of FDI is obvious but how can Nepal reduce trade deficit with India?

One of the ways would be if the two countries maintain relations with industrialists with both sides, instead of focusing on only government-to-government relations.  It’s better for Nepal and India to organize bilateral economic conclaves at a reasonable frequency so that they can discuss issues and find solutions.  Private sector bodies of Nepal can have direct contact with Indian investors through Indian business organizations.  If they talk with each other directly, many things can be settled. The government of Nepal can also communicate their policies directly with the Indian industrialists. If Nepal establishes direct contact with Indian industrialists, it would know their concerns and also find out the factors that have hindered investment in Nepal.  The government will also come to know directly what their concerns are and how those concerns can be addressed. Equally important is to incentivize the investment.  Creating Special Economic Zones, cluster development models, integrated supply chain models with global suppliers etc are some incentivizing factors.  They have done a lot for India. Such ideas might be as useful for Nepal.

Many Indian investors are willing to invest in Nepal. Nepal has a lot of hydro potentials. After the success of Arun III more companies are interested to come to Nepal and invest.  Indian companies are also interested to invest in tourism, education and many other sectors. Private education industrialists can set up their institutions in Nepal.   If two countries have good business relations it will directly contribute to minimizing tensions, if any, on diplomatic and political fronts.  Economic diplomacy can become a key tool in further enhancing Nepal-India relations.  This is what is happening globally. Leaders across the globe are now more focused on economic issues. Through economic cooperation and considerations it is easier to build better diplomatic relations.

The demonetization drive was criticized by some sections at one time. How has it helped Indian economy? 

You cannot look into any initiative in isolation.  When our party took over, there was a problem with regard to tax compliance and large part of business transaction was not being channeled through financial institution mechanism.  There was a need to push transaction through digital banking. We had to establish the audit trail of business transactions. And there was a need for identifying the concerns of liquidity and the issue of shifting the informal sector into formal sector. Several other steps together with demonetization helped into creating an ecosystem whereby we are moving informal sector into formal sector.  The GST could not have been as successful if we had not made concerted efforts to moving towards digital economy and digital banking.

Cumulatively, demonetization has created an ecosystem that has greatly helped minimize corruption. We have been able to establish audit trail of all transactions.  The government has deregistered around four hundred thousand companies found in money laundering. Because of these steps, we now have more transparent and corruption-free eco system and it’s easier to do business in India. Most of all, tax compliance has increased, thanks to audit trail.  

Demonetization has affected a lot of Nepalis. The government of India has refused to exchange Indian currency possessed by many Nepalis.
I think this is for Reserve Bank of India to decide. Central banks of Nepal and India should work to resolve issues related to Indian currency in Nepal.  

One of economic issues in India at the moment is depreciation of Indian rupees against US dollars. This might have direct bearing on Nepali economy for our currency is pegged with Indian currency.
Rise of petroleum price and depreciation of Indian rupees against dollars are two issues facing us at the moment. There are global factors behind it. This could have been addressed by direct intervention by the central bank but the government has decided it is not yet time for intervention for domestically we are in better situation. Our GDP grew by more than 8.2 percent.  Inflation is well under control. It is 3.6 percent at the moment. Our foreign exchange reserve is more than 24 billion dollars, which is very healthy. Our current account deficit is well within the limit.  And we are getting a lot of FDI. Depreciation is largely driven by external factors. Our domestic factors do not require us to act for immediate strong measures. 

Exporting ginger to India from Nepal has rarely been a hassle-free undertaking. Now and then Nepal-bound containers are held up in Kolkata port. 

You should not take one or two sporadic incidents and make a judgment. The intention of the Indian government is very clear.  Our focus is on smooth trade between the two countries and establishing even better connectivity for this.  We are developing connectivity infrastructures including with Nepal to enhance trade relations.  India has put BBIN in priority for the same purpose.   The government is open to resolving all kinds of issues. Media reports sometimes create completely different perceptions. We need to read them critically. We have good trade relations even with countries with which India does not have so special relations.  We have special relations with Nepal.  There is no reason why we cannot have smooth trade with the neighbor with which we have a special relations. 

One of the persistent concerns of your party has been regarding Hinduism in Nepal. One of the former Nepali prime ministers recently said India imposed blockade on Nepal in 2015 because Nepali leaders failed to address India’s concern related to Hindu state. 

I think it is unwise to link what you call blockade with Hindu concern. Indian government has consistently denied blockade. Yes, India showed some concern for people of Tarai but at the same time India has always maintained that it’s up to Nepal to do whatever is best for Nepal.  The opinions of general people should not be equated with opinions of the government.  As for Hindu state, we had always appreciated Nepal as a Hindu state because over 85 percent of Nepalis are Hindus.  India is also a Hindu dominated country. So there have always been positive sentiments among Indians regarding Hindu state status of Nepal.  But that too, like I said, is the public opinion.  India is a secular country. We cannot say what should be the status of Hindu religion in Nepal. It’s for Nepal to decide.  The government does not have any position on this.  What individual leaders say are individual opinions. They should be understood as such.

Economic Implication Of PM Modi’s Foreign Policy

By Gopal Krishna Agarwal,

There is no doubt that Prime Minister Narendra Modi has been able to leverage India’s economic advantages to improve international relations and vice versa. His government has recognized that the country’s leverage is dependent primarily on the size of Indian economy, its growth trajectory and the ability of the strong government at the center to address challenges.

India’s ambition to become $10 trillion economy and to create 175 million jobs by 2032 will depend on the internal reforms initiatives. Linking India’s Foreign policy to domestic transformation, his policy seeks to attract foreign capital. The policies are geared towards regional stability, peace and prosperity. Some important issues such as climate change, conservations of water resources, renewable energy, robust economy defense procurement and manufacturing, which have simultaneous risk and opportunities, are Modi ji ’s vision for a modern India.

Along with this the personal rapport established by PM Narendra Modi with international readers have significantly enhance India’s profile and given it a confidence never seen before ; even to the extent of balancing superpower to our own advantages , as can be seen from the recent G20 Summit. There was visible tension between the US & China, but both were at ease and supportive of India’s concerns. India Cushions itself from not becoming marginalized in the larger US-China context. Beijing has committed S20 billion investments in India in many Industries. The US is also supportive of all over initiatives.  

Modi ji has been successful in overcoming doubts in the minds of the international community that India will realize its true potential of economy power. He has removed apprehensions with regard to corruption, transparency, ease of doing business and commitment to reform in tax laws, corporate law, resource allocation, government clearances, removal of bureaucratic hurdles and retrospective taxation. Two major apprehensions under UPA regime. Policy paralysis and large scale corruption have been effectively checkmated.  Government has embarked on economic growth with initiatives such as Make in India; Digital India; Smart Cities: Clean India; Clean Ganga;  Ease of Doing Business, Tax reforms such as GST; Bankruptcy law; and project clearances & revival of stalled projects. India has become one of the most open economics with regard to FDI policy.

In International Business arena; over the years, bilateral trade relations and agreements have gained enormous significance than multilateral pact such as WTO, GATT, etc. It is becoming more and more difficult to bring developing countries to common agreeable points at multilateral platforms and therefore small trade blocs such as ASEAN, SAARC, BRICS AFRICAN Nations and bilateral free trade agreements (FTAs) have gained prominence.

Modi ji has very well leveraged this to India’s economic and strategic advantage. Over the span of two years, He has visited more than 42 countries and held bilateral talks, focused and nurtured  new developmental and economic blocs. His initiatives for Act East Policy, connecting Bhutan Bangladesh India Nepal (BBIN) through GPS and common licensing policy building a road corridor from North East to Myanmar etc., are commendable.

Bilateral initiatives

Quickly ratified the long pending Land Border Dispute Agreement (LBA) and the Maritime Boundary dispute with Bangladesh. Government has been wise to fast track India’s developmental projects in Afghanistan. India’s participation in the development of the chabahar port a trilateral pact to build a land transit and trade corridor through Afghanistan are stepping stones for bigger future involvement. His visit to Iran shows the understanding of the changing context of Iran, which is now a stable and resourceful country and important for our energy security. India- Japan relation are at an all time high in the joint statement of India and Japan 2025- India side expressed hope to attract $5.5 billion of investments and support in our infrastructure development. Building Good rapport with German Chancellor Internationally, Germany is the key provider of high end technology and has surplus capital investment. Even for National Mission for Clean Ganga (NMCG) we can learn a lot from the river Rhine experiment; In Partnership with France, India has established the International Solar Alliance with head office in Gurugram (Haryana). This alliance has the membership of 120 countries for better harnessing of the solar power potential. Modi ji reconnect to Central Asia is crucial; Uzbekistan has strong cultural ties. Turkmenistan is rich in energy there is huge hydro potential in Kazakhstan and Tajikistan has historical significance.

Arica offers India a massive opportunity to expand our global economic footprint. The continent is an important market for Indian economy. The 54 African states have a combined GDP which is slightly larger than that of India. The third India Africa Summit in New Delhi in November 2015 had a focus on this engagement. Another important visionary step was leveraging powerful Indian diaspora across the world, in the process empowering them in their own countries, as well as coordinating with them for advocacy and influence for better diplomatic and economic relations with India PM Narendra Modi’s visit to United Arab Emirates (UAE), Seychelles, Mongolia and Fiji has given fillip to Indian exports, Direct connect with  NRIs was very innovative, the first such gathering of 15000 NRIs was at New York’s  iconic Madison Square Garden in Beijing he attracted a crowd of about 5000 people at Wembley Stadium over 60000 people gathered, Similar was the case in Australia, Inward remittance flows to India, according to the World Bank, totaled S72 billion in 2015, Making India the largest remittance receiving country which is about half of  our current account deficit.

Some positive results of foreign Policy initiatives India is the world’s top destination for FDI flows in 2015, helping overcome many of its key growth constraints particularly technology , energy and infrastructure attracting investment commitments of close to S20 billion from foreign investors. In 2014 India’s total exports were 20.7 percent and imports were 25.2 percent of GDP. Total trade was 46 percent of GDP, suggesting a moderate degree of integration with the rest of the world. India plans to double its aggregate global trade over the next decade. Our target for 2019 to become the top start up destination in the world, achieve a top 50 ranking in the global ease of doing business, achieve 60 percent digital penetration and increase the share of manufacturing from 16 to 25 percent of GDP by 2022.

Currently, complex project financing services are undertaken abroad. We have to develop capacity to perform international financial services domestically by introducing some innovative Structured Financial Product. Recently The Reserve Bank of India (RBI) has introduced ‘Masala bonds’. We have been strengthening the institutional structure for both commercial and strategic engagement with the rest of the world. India has been advocating governance reforms in International Monetary Fund (IMF), The World Bank, Asian Development Bank, African Development Bank and the inter American Development bank An ongoing negotiation for the Regional Comprehensive Economic Partnership (RCEP) is a case in point. The minister of Commerce has merged two bodies that handle anti dumping and import safeguard actions in the Director General of Trade Remedies (DGTR) for improved and coordinate negotiations. India’s vigorous quest for Nuclear Suppliers Group (NSG) membership and becoming the member of Missile Technology Control Regime (MTCR) are also very significant. Modi ji has been leading the international debate on many issues- tax information exchange, transparency, corruption we were mostly defensive earlier at G20 summit, He said , G20’s efforts should be for zero tolerance for corruption and black money. Zero barriers and full commitment to action.

Fitting corruption black money and tax evasion were keys to effective financial governance. We need to eliminate safe havens for economic offenders, track down and unconditionally extradite money launderers and break down the web of complex international regulations and excessive banking secrecy that hide the corrupt and their deeds, “PM Modi said. This is the position of strength that we have gained at international forums. 

Petroleum Prices, Why They Are So Important For Our Economy

By Gopal Krishna Agarwal,

For understanding petroleum pricing in India: We have to break it into following aspects:

1.     Petroleum prices component

2.     Issues of under recovery and oil bonds during UPA

3.     Revenue to Central and State governments from the petroleum section.

4.  Alternative Sources of energy and future planning for reduced dependence on oil

Petroleum products pricing is always a contentious issue. It has a large impact on inflation and also a major source of revenue for the Central and State governments, we import about 80% of our consumption needs. An increase of one dollar in the international price of crude oil increases the cost of our petrol and diesel by Rs. 0.50/ litre and one rupee fall in exchange rate against US dollar increase the cost by Rs 0.65/litre of petrol and diesel. We can conclude that the prices of petroleum products are determined in India by external factors. India imported 256.32 million metric tones of crude oil and petroleum products in 2017-18 and paid Rs. 6,52,896 lakh crore.

Earlier under Administered Price Mechanism (APM) followed by UPA, petrol and diesel prices were not market determined.  Steep increase in international prices of oil used to put severe pressure on the oil marketing companies (OMC). Still their retail prices were kept below the cost, resulting in under-recoveries for OMCs. Between the year 2004 to 2014, the total under-recoveries was to the tune of Rs. 8,53,628 crores.

When the international crude prices were increasing, during the period of 2004-08 the subsidy by the government on petroleum products became insufficient. Since the fiscal position of the Government was very bad, there was no scope for increasing the subsidy. The government started issuing ‘oil bonds’ to the OMCs instead of giving cash subsidy. These interests bearing Oil bonds were not even reflected in the Budget provision by the UPA Government, resulting in distortion of fiscal deficit figures. During 2005 to 2010, oil bonds for Rs. 1,42,202 crore were issued,

with rate of interest on them ranging from 7.33 to 8.4 % per annum repayable up to 2024-25 by successive governments in the future. This was a case of postponing current liabilities on the future generation.

Bad fiscal prudence under UPA government resulted in increasing of the interest rates affecting borrowing and investment in the economy and higher inflation for the common men. While the petrol and diesel prices were artificially kept low, people were paying higher prices for almost every other thing. The burden sharing mechanism devised by the UPA government had also led to a depletion of cash reserves of oil companies like ONGC, GAIL and OIL and destruction of their intrinsic market value.

The argument that high taxed on petroleum product in India needs to be brought down to control the spiraling prices has to be closely looked into.

Firstly, this revenue is required for catalyzing India’s economic growth, for building infrastructure for better quality of life and providing social security to the poor classes and in the backward areas. Secondly, large component of Central government duties on petroleum products i.e. 42% of the Basic Excise Duty is given to State governments and 60% of the balance 58% of the Basic Duty is spent on Centrally Sponsored welfare schemes in the States i.e. total amount transferred to the States by the Centre is (42+34.8)= 76.8 % of the Basic Excise Duty. It is also estimated that a one rupee reduction in the excise duty at the Centre would reduce revenue collection by Rs 14,000 crores.

Increase in the petroleum prices has different effect on the tax collected by the Centre and the States, which also has to be analyzed properly.

In a decontrolled regime now being followed in India, any change in international crude price is passed on to the consumer. Higher prices are likely to reduce consumption. The taxes imposed by the Centre are specific tax, i.e., fixed in terms of Rs per unit. So, if the consumption falls, the tax collected by the Centre goes down. The States, however, levy ad valorem taxes i.e. percentage based on prices and therefore with the increase in petroleum prices, its tax collection does not fall even with fall in consumption. Therefore, if the taxes on petroleum products have to be reduced in wake of the rising international prices, it should be done by the States first than by the Centre.

The solution to this teething problem on the long-term basis, is to change the share of petroleum products in energy consumption mix (34.48%, year 2015-16) We need to generate more energy from coal and lignite (46.28%), which and also focus on electricity generation from hydro, nuclear and other renewable sources like wind and solar (12.75%).

Shri Narendra Modi government is working on this line. In the coming years we will definitely see a fall in the contribution of petroleum products in the overall energy share in our consumption.

GST Is Not Just a Tax Reform But Is a Social Transformation

By Gopal Krishna Agarwal,

Nitial anxiety apprehension with regard to GST rollout is largely owing to lack of awareness and information about the new tax regime. The Apprehension is with regard to its implementation. People are worried about how they will be registered, how they will be registered, how they will avail benefits of input tax credits, the anti profiteering clause and how the reduce taxes shall be passed on to the consumers. These are concern that are being addressed through processes of instructions and consultations. I myself am travelling to many places for awareness programmed. They will be many regional meetings with trade bodies and professionals to create awareness about GST.

This is not just an economic measure. It means a social reform by ushering in a more transparent, tax complaint society. For the consumer, It would reduce prices of manufactured goods, for the government it would  mean increase tax collection and fiscal consolidation and creation of a much simpler system to administer through GST network (GSTN).

The experience of demonetization shows that popular sentiment in India is for a transparent corruption free economy where opposition to a tax complaint regime is waning with the time.

Conceptually, no one has a problem with the GST. It does away with the multiplicity of tax structures subsuming 18 central, state and local taxes. It results in a reduction of indirect taxes for the consumer; it creates ease of doing business by online registration, filling of returns and assessments. It is the only mechanism through which we can create one tax one market. We are looking at an objective, online transparent and complaint tax system.

For the businessmen who are already registered under excise or VAT, the migration is simple and online. Once registered they have to only capture transaction carefully at the point of supply with full details. Rest; returns, input tax credit etc. will be automatically extrapolated by the GSTN.

Traders etc., whose turnover is below 20 lakh, are exempt under GST. Those traders and manufactured etc.

Facts on Demonetisation And Road Map Ahead

By Gopal Krishna Agarwal,

The recent announcements on demonetization have a created a new dimension in the economic ecosystem of the country. There is a debate in the country, whether it will have us in curbing corruption and eliminating black money in circulation. What will be its impact on the economy in the short medium and long term; particularly in the important segments like rural and agriculture sector, micro small and medium enterprises and unorganized sector like small traders shop owners & daily wagers etc. But Bing Bang reforms require this we are moving towards new revolution of Digital Economy. Demonetization has to be seen in a larger prospective.

Bringing economic growth to the country and curbing corruption and elimination of black money were the two important mandates on which our government came to power.  Some of the important aspects that have to be kept in mind are.

According to the World Bank report 20% of wealth is stashed across all assets     class i.e.  Real estate gold and currency etc. Global Wealth report 2016 shows that 1 % of population has more than 58% of the wealth of the country. In the concentration of wealth India ranks 2nd after Russia across globe.  

97% of our population is having wealth of less than $ 10000 i.e. approximately Rs 700000. Cash currency ratio to GDP of 12% in India is very high compared to international standards. Budgetary resources of the government are very limited planned  expenditure of approximately  Rs 5.5 lakh crore is not enough for the government to undertake infrastructure developments and meet social security requirements. 

Every citizen of the country is paying taxes in the form of indirect taxes but if it is properly accounted for it is not reaching government revenue coffers proper recording of transaction in system is necessary.

Demonetization cannot be analyzed in isolation. It is a part of the series of measures under taken by Shri Narendra Modi’s government since it inception keeping in mind the above ecosystem. The very next day Shri Modi came to power a special investigation team (SIT) was set up to suggest steps to curb corruption from the country. Starting that day several steps have been taken by the government to achieve these objectives.

1.  Foreign illegal assets declaration scheme.

2.  Renegotiation of bi lateral treaties with Mauritius, Cyprus and Singapore where most of the hawala transaction were taking place.

3. Treaty with America for sharing of financial information under FATCA.

4.  Initiatives with OECD and G20 countries for information exchange.

5.  Income disclosure Scheme (IDS).

6.  Passing of Benami Properties Act.

7.  Amendment to prevention of corruption Act and Placing of Whistle blower protection Act in the current session of parliament.

8.  Now Pradhan Mantri Garib Kalyan yojana has been announced for penalizing those who deposit black money in the Banking channels.      

9.  In last two and a half years about 92 senior officials have been penalized for corruption which is        much more than such as action in the past.

Demonetization is part of the larger plan of eliminating black money and fight corruption. It is the part of the whole process to create an ecosystem of equal and transparent opportunities for economic growth to the common men in all segments of the society across all segments of the society across all geographical areas.

Demonetization is part of the larger plan of eliminating black money and fight corruption. It is the part of the whole process to create an ecosystem of equal and transparent opportunities for economic growth to the common men in all segments of the society across all segments of the society across all geographical areas. 

Benefits of Demonetization

  1. Due to huge currency in circulation economy was having inflationary pressure and value of housing etc. was getting out of common man’s hand. Demonetization will reduce prices in real estate and bring down inflation further.

2.   Bring resources to the government for social benefits schemes for the poor and low income groups and infrastructure development in particular in the rural sector.

3.  Helping us to move towards low interest rate economy with loans for housing sector poor and rural sector of society at lower rates.

  1. Create infrastructure for smooth implement of GST, which in turn will help us reducing indirect taxes.

2.  Curbing terrorist activities and other criminal activities like Maoist insurgency and extortions in north eastern area etc.

3.  Removal of fake currencies in circulation.

4.  Lower cost of transaction (cost of online payments and mobile banking are much cheaper).

5.  Many awareness programs and incentives by the government on online payments.

6.  Higher tax compliance. Third quarter tax collection reports shows. 26% increase in indirect tax collection 15% increase in direct tax collections.

26% increase in indirect tax collection, 15% increase in direct tax collection.

The government is well aware of the liquidity crunch, but this will be sorted out by 30th December. We are asking people to move toward less cash economy through online payments and mobile banking but we will do this through creating awareness and not make it compulsory. Government will bring liquidity back into the system, but with reduction to about 8 to 9% of GDP.

The Government is well aware that, there is a chance that these squeezes in liquidity can affect the economic activities in the country.

The government has a roadmap to revitalize the Growth of GDP.

1.  The current account and savings accounts deposits (CASA) of banks will increase. This will reduce their cost of funds and will also result in increased availability of funds.

2.  Focus on credit off take through startup, standup mudra loans to medium and small sector and rural sectors of economy at reduced rate of interest.

3.  Real estate price to fall further and with fall in rate of EMI, Housing will come with in the reach of the common man and will boast construction industry.

4.  With more tax compliance Government can move towards lower of rates of taxation, and create premium on honesty.

5.  With the black money in circulation not coming to the banking channels, can bring several benefits to the economy. But all this will be achieved only when black money is not recycled.

6.  Through increased tax collection and enhanced resources Government will go for huge capital investments and social sectors spending to improve quality of life of the common men and catalyze growth.

7.  Implementation of GST (which will lead to low indirect taxation) requires right ecosystem, the government is creating an atmosphere so that transactions are recorded properly and transparently.

8.  With supply of black money being checked, Government will go for electoral reforms for curbing use of black money.

By Third Quarter Of Current Fiscal, Job Market Set To Revive

By Gopal Krishna Agarwal,

The job market has not to be seen only in light of NSO employment data but also include self-employment opportunities created with entrepreneurship development. The job market has significantly undergone change with new set avenues being created with technological advancement and changed economic scenario. The data with regards to jobs have to be looked from a different perspective. With all the macroeconomic parameters being favorable the economy has bottomed up.

GDP growth figures will significantly improve in the coming quarter. Government investment over the period has increased many folds, basically in infrastructure development. PM’s concerted efforts; to revive stalled projects through the PRAGATI initiative has helped many held up projects. These are creating a lot of demand in the economy propelling private investment as well. Projects like bullet train, which catalyze growth, are seeing the light of the day.

Modi government focus on improving manufacturing sector and make India, a global manufacturing hub is important. Globally employment generation primarily emerge from this segment. A new form of employment is being generated with different skills. We have to see the results of developing self employment and entrepreneurship. Youth is waking up to the requirement of different skill sets where new opportunities are emerging exponentially like a wireless network, data scientist, data architect, artificial intelligence, automobile engineer, 3D technician, cyber security expert etc. Even aggregators like Uber and Ola and E-commerce business are giving new working opportunities. People are being trained in new skills. 

They are leaving traditional occupations behind. Government efforts on skilling and entrepreneurship development like 5 crore mudra loans and stand up, startup ecosystem is working well. We have reached the third rank in global start-up ecosystem. With corruption and black money under check, transparency and online system of doing business under the new GST and the digital economy regime, ease of doing business (EODB) has gained tremendous momentum.

World Bank has recognized twenty economic reforms of Modi government and are ready to be considered in next EODB ranking. We are expecting significant improvement in next the ranking. Nomura has also estimated that our GDP will grow at 7.1% YOY basis. All this is showing positive sentiments and by the third quarter of current fiscal, the job market is going to go up significantly and is already showing signs of improvement. Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house.

Smoking Can Cause Infertility Among Women, Premature Birth Say Doctors

By Gopal Krishna Agarwal,

Smoking in women can cause infertility and premature baby birth, warn doctors as they called for stricter tobacco control policy to save over 1.3 million lives which meet untimely death due to consumption of the deadly product every year in India.

Dr. Uma Kumar, Professor and Head of the Department of Rheumatology, AIIMS New Delhi said that smoking habits among women are on the increase which is a matter of concern. It may result in infertility, cases of which are also rising these days. Also, smoking may lead to premature birth, she warned.

In fact, the doctor said, contrary to the general notion, tobacco consumption affects not only the lungs but many major parts of the body like teeth and bones are seriously damaged. Dr Kumar said that first-hand smoke and secondhand smoke both are equally harmful to health. Kumar was sharing her views at a webinar on the “Prevention of deaths caused by tobacco” organized by Tobacco Free India on the occasion of World Health Day observed recently.

Economist and BJP’s national spokesperson Gopal Krishna Agarwal while participating in the discussion too called for a stricter tobacco-control policy such as increasing the tax on such harmful products which, he said, would not only generate more revenue for the Government’s welfare schemes but also prove beneficial to those who use them by reducing the consumption of these products.

Along with this, the additional revenue earned therefrom could be utilized for the welfare and alternative employment of the poor and tribal who are engaged in tobacco-related business and are victims of exploitation. With this fund, tobacco-cessation centers could also be set up.

He further said that in the case of addictive products like tobacco, awareness among people is not enough, but in such cases, the pricing factor has a big impact. According to the principle of economics, if their price is increased through tax, then it will help in reducing consumption, which will also benefit those who use them. The existing taxes on tobacco products are not enough, he argued.

Agarwal also said that Prime Minister Narendra Modi has taken the resolution to make a healthy India, and in order to fulfill it, along with treatment, preventive measures are also very important. Twenty-eight percent of the adult population of the country is using tobacco products. As various tactics are being adopted by the producers of sin goods to lure students of the age group of 13 to 15 years, the Government has decided to make the tobacco-control laws more stringent.

Not Just Lungs, Smoking Affects Every Cell Of Human Body

By Gopal Krishna Agarwal,

Not just lungs but also every cells of human body and the hard organs like bones and teeth get adversely affected by smoking, said Professor Uma Kumar, Head of Rheumatology at All India Institute of Medical Sciences (AIIMS), New Delhi.

Kumar said that the first hand smoke and second hand smoke both are equally harmful for health. 

Expressing concerns on rising smoking habits among women, she said that it may result into infertility, cases of which is also rising these days. Also, smoking may lead to premature birth. 

People generally think that smoking affects lungs only, but the case is different, it affects every parts and is one of the important risk factors for growing numbers cases related to autoimmune diseases, Kumar said while speaking on the prevention of deaths caused by tobacco on the occasion of World Health Day. 

The event was organized by Tobacco Free India. 

Dr Vishal Rao of HCG, Bangalore said that the reason for the rapidly increasing cases of oral cancer in India is tobacco products. 

To save the lives of 13 lakh Indians annually, it is need of the hour that the strictness on tobacco products should be increased, said eminent economist and BJP’s national spokesperson Gopal Krishna Agarwal. 

Strong Regulatory Frame Work Needed for Efficient Water Management

By Gopal Krishan Agarwal,

A strong regulatory framework is needed to ensure efficient water management in India, Bhartiya Janata Party (BJP) National Spokesperson Gopal Krishna Agarwal has said. Addressing a virtual event organized by Consumer Unity and Trust Society (CUTS), Agarwal called for the implementation of National Water Framework regulations.

Agarwal, who has co-authored the book, ‘Water an Element of Life: Price Sensitivity and Consumption by the Marginalized’ said water should be provided as a public good to all sections of the society.

Pradeep S Mehta, Secretary General, CUTS, called for putting in place an integrated approach to deal with the issues related to water management.

“Local governments play an essential role in water management. But they are not properly empowered. There is a need to empower local institutions,” said Mehta.

As a consumer, we have the right to water but we need to exercise this right while simultaneously ensuring our responsibility to manage and conserve water,” said Vipul Chatterjee, Executive Director, CUTS.

Mathew Cherian, Chair, CARE India, said traditional knowledge is essential to recharge water. “There is great pressure on groundwater across the country and states like Rajasthan may face severe stress in coming years.