“It is now proposed to expand the scope of UPI by permitting operation of pre-sanctioned credit lines at banks through the UPI,” said the RBI Governor’s statement, towards the end, announcing the Monetary Policy Committee’s decision to pause policy rate changes. This proposal is fairly anodyne and anaemic, in comparison to, say, the Red Queen’s curt command, “Off with his head!” But make no mistake, it is no less effective a death sentence, directed, in this instance, at credit cards.
The real world has a way of confounding textbook economics. Macroeconomics, the branch that deals with the big things like growth, inflation and interest rates, seems broken when used to implement policy. In medicine, a drug is not approved for use if it has potentially serious side-effects. Or, if it's approved, it is administered with care, in the right doses. The collapse of Silicon Valley Bank (SVB) and the pressure on other US banks suggests that economists still don't quite appreciate the side-effects of their actions.
INDIA’S per capita income, representing the average income of an Indian citizen, has risen from INR 79,000 in 2013–14 to INR 1,71,000 in 2022–23 — an increase of 116 percent. Therefore, some claim that incomes have more than doubled in India since the present ruling dispensation took office. The catch is that: a) this includes the price increase during the period and hence does not represent the real increase in incomes, and b) the data for 2022–23 and two earlier years is provisional and subject to revision.
According to the most recent report by the United Nations, "Women and girls comprise half of the world's population and, as a result, also half of its potential." As a result, the development of any nation is directly proportional to the development of the women and girls living in that nation. Women were valued by society in ancient Indian culture, and society at the time considered women to be Janani, which means mother and worshipped women as Devi, which means goddess.
The progress of India’s Goods and Services Tax (GST), based on taxing value-addition, introduced as a dual tax levied by both the centre and the states, in a short period since 2017 when it was introduced, has been commendable. The GST has helped India progress towards the vision of ‘one nation, one sales tax’; and has helped reduce transaction costs of businesses at all levels, while facilitating lower logistics costs toward greater global competitiveness. To implement GST, a Constitutional amendment was needed as in the then-existing Constitution, there was no provision for levying sales tax on goods by the Union government, and the states could not levy sales tax on services.
If Indian companies are to go global, find global partners accountable to their shareholders and laws that call for clean operations that are at least noiseless, if not quite squeaky and receive inexpensive capital from abroad, Indian politics has to clean itself up. While we are all proud of India's democracy, few of us bother to fund any political party. We are content to let parties fund themselves by mobilising funds as they traditionally have from the time of the freedom struggle when industrialists like G D Birla used to fund the Congress. But most such funding was informal, with no structured, transparent disclosure of who funded which party and to what extent.
This year’s budget is a bag of misplaced government spending priorities and misses some crucial challenges facing urban development. The last full Union budget of the National Democratic Alliance (NDA) government continues to be plagued with the idea that “the private capital will ameliorate some of the basic problems of India and that large capital-intensive technologies will usher in development, including inclusive development.” How fallacious is this argument? We have seen this in the past three decades. The structural difference brought in by Manmohan Singh’s budget in 1991 was to “shift India’s economy away from the hands of the government to the hands of private enterprise, and embraced free trade.