Reflections

I opened the morning news site, The Indian Express, my daily first site – to a rather shocking, though unsurprising bit of news. This news, based on a survey of 34,700 organisations is deeply disquieting, and was regarding rampant job losses in some sectors of our economy. Before I continue – the article in question covers primarily the Job Scenario; but also raises points on earnings & profitability – which in my opinion needs a focused and detailed look. And this article was just the latest in a series of articles I have run across that raise the question of the impact of Demonetisation & GST on the MSME and unorganized sectors of our economy. We will look at those aspects in other articles – including a book review on the concerned topic of a latest book – The Big Reverse: How Demonetisation Knocked India Out . { This review will be uploaded sometime next month }. My point – there is plenty of other evidence from a variety of sources, people etc all of which poi...

In the first part of the budget analysis, I looked at Health, Education and the Rural Economy ; in this, let me move onto the remaining aspects and points raised in the budget, leaving the Fiscal and Number aspects for the closing article to be taken up later. The first part dealt with the basics of a nation – these parameters are what establish Human Development, which is fundamental to any nation. Now, let me start the analysis with the MSME sector, which is, alongwith the unorganized sector, the largest contributor to employment as well as GDP. MEDIUM, SMALL AND MICRO ENTERPRISES {MSME} AND EMPLOYMENT {Pt 71-82} The budget, in points 71 & 72 on page 14, starts off with highlighting the credit aspects to MSMEs. This is where the disillusionment starts in my mind; having just perused the credit offtake scenario to the MSME segment {given in the Bibliography link nos 1 & 2}, which categorically makes a set of hard hitting points : a low proportion of manufactu...

The enclosed article {Biblio. 1} by Mihir S Sharma, one of the few straight talking Economists on Indian Media, does raise some excellent questions. It is a superb analysis of the shoddy economic management – and also raises the fact that something is indeed broken. The economy requires deep seated reforms at core levels-  not vacant sloganeering grandiose plans. Quite correctly, the need of the hour is attending to the real issues that confront on the Business, Trade and Economic Front; as well as a straightforward analysis of what is wrong, devoid of Jumlaas and vacuous statements.     MACROECONOMIC BACKGROUND - OVERALL All Macro-Economic Parameters are in the doldrums, as should be evident to all but the most devoted Bhakt; the time is now ripe for us to rise above narrow parochial statements, and try and get to the root of what ails our nation on an economic front. High NPAs, Low Credit Offtake, Slowing growth for 6 straight quarters, slow export growth a...

So far, I have looked at what could have been in terms of the budget; and the overall Macro-Economic Scenario and the Budget assumptions, and asked myself three questions : namely, in short. Will the budget give a boost to investment, demand and boost agriculture? But, before we move to looking at answering these questions, let me first of all appreciate and point out the most significant changes made from this year onwards : 1.     Merging Railway and Union Budgets 2.     Plan and Non Plan heads done away with, replaced by Capital and Revenue heads 3.     Moving forward of the date of budget presentation and unveiling 4.     This has gone unnoticed : rationalization of schemes, and focus on the key schemes I would also like to point out that, at least in those articles I read, there was not a sufficient presentation of the viewpoints of both sides, that is, for and against these changes given above. A detailed ...

This is the 2 nd part of my ongoing conversation into the Budget and The Indian Economy with Mr Amitabh D Sinha, carried on from : Comprehensive Vs Bottom Up We had closed the previous article with a comment on the MSME Sector, and the problems it faces, particularly Credit and its attendant problems. Moving on : Me : The difficulty of extending credit to the rural sector and the MSME sector is rooted in two problems we face as a people : corruption, and lack of identity papers and formal banking access. These two problems together are creating a scenario of trouble. We are a cash economy, not a banking economy. I recall one of my Sales Officers did not have a bank account, neither any identity papers of any kind, nor any address proof in his own name - and this was in Mumbai. That is the hard reality of our economy. The aspect of cash in our economy is a well studied and known one. Our industry functions on cash and word {not nescecarily illegal - cash can be used...