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Modinomics rings hollow: Look beneath government hype, and signs of deep economic distress are evident

Three years of drought, that is the state of the nation. The monsoon of hope is a long way away. Yet the dream has not soured; a reflection perhaps on the nature of our Republic….

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Three years of drought, that is the state of the nation. The monsoon of hope is a long way away. Yet the dream has not soured; a reflection perhaps on the nature of our Republic.

This government is in denial. It believes that black economy has been given a fatal blow. At 7.1% India continues to be the fastest growing economy in the world. Spurt in public investment has created jobs. FDI flows are evidence of investors’ confidence in the growth story of India. Reforms have led to ease of doing business.

Consensus on GST that eluded the previous government has been reached. This historic legislation will now be implemented from July 1. The Sensex has reached record levels. All this because Modi, as predicted by Nostradamus, will transform India.

Let us critically examine each of these claims. On November 8, when the prime minister announced demonetisation of all 500 and 1,000 rupee notes freezing 86% of India’s economy, it was indeed a surgical strike at unaccounted cash in the economy. If this ill-thought decision was an attempt at eradicating unaccounted wealth then it failed miserably. Most cash is either invested in real estate, gold or is stashed abroad. Undisclosed cash in circulation represented only around 5% of unaccounted wealth.

Now that real estate is outside the GST net, cash will continue to be a factor in real estate transactions. What is alarming is that unaccounted cash entered the banking system and is slowly being withdrawn and reconverted into undisclosed cash.

Demonetisation was a godsend for dalals who earned a fat commission for depositing such cash in banks and then ensuring their withdrawal. Black money is back albeit at a slow pace. Its full flow will take time. The problem of black money remains. It’s the poor however who suffered. Claims that demonetisation will eliminate both fake notes and deal a fatal blow to terrorism have turned out to be hollow.

The claim of 7.1% growth is also suspect. The latest Q4 GDP results show a growth of 6.1%. This also reflects the adverse impact of demonetisation on the economy. Private investment, the engine of growth, has dried up. Rate of savings is below 30% of GDP, whereas during UPA regime it was over 35%.

Exports were in constant decline for 19 consecutive months till June 2016 and have now plateaued. The IT sector has to reinvent itself to remain competitive. Recent layoffs by four major IT companies are evidence of its health.

Bank NPAs at 11% of gross advances are a roadblock to lending. Low credit off-take, in the absence of demand, is worrisome. There are hardly any jobs for the 12 million who enter the workforce annually. Underemployment is rampant. Jobs created in 2015 and 2016 stood at a dismal 1.35 lakh and 2.31 lakh, respectively.

Yes, public sector investment has created some jobs but unless private sector investment is robust, the economy’s capacity to absorb the workforce will be suboptimal. FDI flows mainly in IT, electronics and defence – niche sectors of the economy – don’t cater to jobs in either agriculture, small and medium scale sector, or for that matter in manufacturing. The National Investment and Infrastructure Fund (NIIF) set up in December 2015 to catalyse core sector growth has so far not made a single investment in any project. So much for the confidence of foreign investors in our economy.

Modi believes in seducing foreign investors in digitising the economy, little realising that most of India earns less than Rs 10,000 a month and seldom accesses digital platforms for bank transactions.

Record levels of Sensex, we all know, do not reflect the true state of the economy. With real estate giving no returns and interest rates down, the only option for investors is in equities. This is risky because once the bubble bursts investors will be badly hurt.

As for ease of doing business, we are ranked 130 out of 190 countries evaluated by the World Bank. Is that the transformation Prime Minister Narendra Modi had promised in 2014? Unless the economy is rid of bureaucratic juggernauts and antiquated rules and regulations, the promised transformation will elude us.

In a regime which terrorises business and entrepreneurs, where the taxman is allowed to become an extortionist, where investigation agencies are hand in glove with government, business cannot hope to flourish. Business is already moving out of India. Big business now prefers to make investments abroad. This is the reality. Ease of doing business is a chimera. Reforms have been slow and incremental. Radical reforms were promised only to be forgotten.

GST is a ghost of what was originally conceived. Any consensus which compromises the core of the reform is not a cause for celebration. To exclude electricity and real estate from GST was a mistake. We were sold the dream ‘One Nation One Tax’ which is now ‘One Nation Eight Taxes’. Multiple rates will make for bureaucratic squabbles. Multiple registrations will break the back of the small and medium sector.

The trader is already complaining at the haste with which the finance minister is moving. They want GST implementation postponed. Some states also hold the same view. GST could have been a historic legislation. Its shortsighted compromises have taken away its sheen.

The economy is in distress. Maybe, the cheerleaders of Modi do not quite know what Nostradamus meant.

(The writer, a senior Congress leader, is former Union Law Minister and a lawyer)

DISCLAIMER : Views expressed above are the author’s own.

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World gearing up for a third world war : UK warns of Russian threat

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There is a growing unease in United States and Britain about Russia  progressing in achieving “Eurasian Union” of former Soviet republics along the lines of the European Union under Vladimir Putin. Britain has warned that Russia is the biggest threat to UK’s security since the end of the Cold War. Drawing similarities with the 1914 First World war, UK defence secretary Gavin Williamson has equated Moscow to North Korea after Russia has threatened to unleash nuclear war.

Due to the Russians’ presence in the Mediterranean region and the Kremlin’s “increased assertiveness,” it is time Britain gets stronger, he said. This comes just a week after Britain ordered ships to pass the disputed South China Sea, much closer to the Chinese coast than the white cliffs of Dover.

General Nicholas Carter has also warned that Britain will be unable to preempt or respond to Russian aggression unless its military capabilities are overhauled to match Moscow’s military capabilities. Since 2000, Putin has been Russia’s most powerful man after the resignation of Boris Yeltsin, holding positions of both prime minister and president and had been consistently working to achieve superpower status for Moscow and global hegemony equivalent to US.

The West became cautious of Puin moves after the Russian seizure of Crimea in March 2014, followed by its annexation. UK former defence secretary, Sir Michael Fallon issued calls for increased defence spending, citing growing threats from Russia and cyber-attacks.

Fallon admitted that Britain has all the evidence of Putin’s intent to subvert western democracies, from the Netherlands to Montenegro, from Germany to even the United States.” “Through cyber, our enemies can target us anywhere on the planet: not only stealing our information, but exploiting us, coercing us, disrupting our energy supplies, our armaments, even our governments. Almost anybody can become a cyber-warrior: a laptop and some smart software can inflict enormous financial and physical damage on individuals and entire countries.”

To establish foothold in Middle East, Russia has significantly increased its military operations to Syria. Taking forward the geopolitical and ideological idea, Putin called for the Eurasian Movement of the Russian Federation, and said that there is a unique “Eurasian” civilization in Russia and its neighbors, distinct from both East and the West.

To pursue his goal, Putin clinched free trade pacts with countries to form Eurasian Union. The Russian leader is aggressively trying to achieve Eurasian integration process due to many common factors binding Russia and the European countries together : common history, geographical proximity, massive amounts of trade, etc. But confrontation is most likely between Russia and Europe.

The tensions between Russia and the West escalated after Russia air force purchased 10 of the strategic TU-160M nuclear bombers, code named Blackjacks by NATO. The TU-160M worth 15 billion rubles ($269 million) is capable of carrying 12 cruise missiles or 12 short-range nuclear missiles and can fly 7,500 miles non-stop without refuelling. US, UK and Europe are worried over Putin standing for re-election on March 18 – a poll showing he is likely to win.

Russia has deployed over 330,000 soldiers on its western border while NATO has stationed biggest military build-up on Moscow’s borders since the cold war. Moreover, Russia carried out simulated attack exercises across northern Europe, from Kaliningrad to Lithuania, as part of a new tactic in exploiting the gray areas between peace and war.

Talking about the military hardware, Britain fighter jets are stationed in Romania, US tanks, troops, artillery has been deployed in Poland to counter the Russian warships armed with cruise missiles in Baltic Sea.

An armada of Russian ships from the Baltic Fleet have been dispatched from Baltiysk naval base, in Kaliningrad Oblast, for large scale military exercises. Sweden, whose eastern coast borders the Baltic Sea, is issuing the advise for the first time since 1961 – the height of the Cold War.

U.S. National Security Strategy released by Trump’s national security adviser, Lt. Gen. H.R. McMaster states Russia and China are “revisionist” powers, genuine geopolitical rivals to the United States that “challenge American power, influence and interests,” while “attempting to erode American security and prosperity.”

Russia military has been deeply engaged in the Donbas region of eastern Ukraine since April 2014, where fighting has claimed 10,000 lives. The United States, European Union and other Western countries are continuing to put political and economic pressure on the Kremlin. Putin’s Russia is active today. “Azerbaijan, Armenia, Georgia, Moldova, Belarus, and Ukraine—he is either trying to get those countries back into his realm .

Washington approved for the first time lethal weapons sales to Ukraine in its fight against Russian-backed militias and the announcement of a new U.S. sanctions list that targets Russians such as the Kremlin-appointed strongman in Chechnya.

Russia denounced the American strategy document as an “imperialist” relic of a delusional superpower that persisted in acting unilaterally on the world stage.

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By: Arti Bali

Senior Journalist

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Royal Orchid announces the opening of group’s newest hotel in Nashik

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 Royal Orchid Hotels, the fastest growing hospitality chain in India today announced the opening of its new hotel in Nashik named ‘Regenta Resort Soma Vine Village’. Nashik popularly known as the wine capital of the country has gained immense popularity among the tourist in India.

Regenta Resort Soma Vine Village, with 32 rooms offers boutique accommodation with varied dining and banquet facilities. The glorious property will give travelers a mesmerizing experience and contemporary luxury.

On-site amenities at the hotel include a completely refreshed restaurant, a winery, a state-of-the-art fitness center and outdoor pool, as well as a business centre, and spa services. The hotel has a wide range of facilities that let the guests choose from various room categories designed in keeping the touch of the city with elegance and relaxing atmosphere.

Located in the northern part of the state of Maharashtra, Nashik is developing as a lively city with a blend of the ancient and modern touches attracting tourists from across the country. The city has numerous forts, temples, historic sites as well as a home to industries. The city offers green pastures, mountains and tours of the wine yard.

The most important attraction of the city includes Vineyards and Hindu temples situated in and around Nashik. May it be an important corporate event or a business meet or a simple getaway to explore nature and feel the essence of spirituality, Regenta Resort Soma Vine Village allows enormous options to its guests. The guests can experience the beauty and culture of Nasik just by availing one of the several facilities that the hotel provides to its patrons.

Chander K. Baljee, Managing Director, Royal Orchid Hotels said, “The hotel is the perfect complement to our recently refreshed Regenta portfolio of hotels across India. We are taking continuous steps towards expanding our presence all over India. The new hotel in Nasik is one such move towards achieving our aim. The government push toward tourism sector is giving us the much needed enthusiasm to go aggressive in adding new properties to our bouquet. Going forward we will continue to add more properties to both-explored and unexplored tourist destinations”

By now we have added eight properties – Mysore, Ahmedabad, Dehradun, Kanpur, Dwarka, Indore, Pushkar and now Nasik in the current fiscal year taking the number to 49 hotels. We will continue our efforts in expanding our presence all over India”.

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Nationalism of Narendra Modi is under question

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The economic bungling by Jeweller Nirav Modi, Business tycoon Vijay Mallya  and Lalit Modi has put a serious  question mark on the nationalism of Prime Minister Narendra Modi. His conspicuous silence on  India’s largest banking fraud to the tune of Rs 11,400-crore and still counting is shocking as he repeatedly claimed to have won the huge mandate on the basis of giving achhe din to the people of India but crony capitalists have escaped India with taxpayers’ money and there is no clarification from Narendra Modi who has taken the voter for a ride.

Congress president Rahul Gandhi advised Prime Minister Narendra Modi  to speak on  the Nirav Modi and Rafale scams rather than seeking suggestions for his Mann Ki Baat programme from the general public.

The intentions of Modi government are also conspicuous when the central government  opposed a plea seeking an independent Special Investigation team ( SIT )probe and deportation of billionaire diamond merchant Nirav Modi in the Supreme Court,citing an FIR has already been filed and that a probe was on.

The Supreme Court has already admitted the PIL, filed by lawyer Vineet Dhanda in the Rs 11,400 crore PNB fraud and has now been listed for further hearing on March 16.The PIL has made Punjab National Bank, Reserve Bank of India and the ministries of finance and law and justice as parties.

Modi has been touring the world citing that his government is enhancing the status of India as an investor friendly country and where there is an ease of doing business. On the contrary, his reforms of demonetisation and GST has benefitted selected Business people having links with the ruling party and crony capitalists and general public has been made to bear the burnt. The economic frauds have dented the image of India globally and these types of  incidents would amplify questions about distress in the country’s financial sector reeling under bad loans.

What type of image is being projected when the  picture in which billionaire jeweller Nirav Modi is seen with Prime Minister Narendra Modi in Davos where the 48th Annual Meeting of the World Economic Forum took place  from 23 to 26 January 2018. The summit was attended by world’s leading figures .

On January 31, PNB filed a case of “criminal conspiracy and cheating” against the gem trader, members of his family and others two weeks ago alleging a 2.8 billion indian rupee ($44m) fraud.

The Modi government is busy creating eyewash by deploying agencies to probe the scandal  and the Central Bureau of Investigation  on Tuesday arrested five senior executives in connection with the multi-crore PNB fraud including Vipul Ambani (President, Finance, Firestar International/Diamonds group), Kavita Mankikar (executive assistant and authorised signatory of 3 accused firms), Arjun Patil (senior executive, Firestar group), Kapil Khandelwal (CFO, Nakshatra and Gitanjali group) and Niten Shahi (Manager, Gitanjali).

Modi asked people of India in 2014 to vote out corrupt UPA regime then how he and his government is defending the scandals that have occurred under his tenure of just four years . Modi is even trying to bring back the culprits to India .

The question should be asked to the ministers of Modi government what type of nationalism they carry with them when they do not value the life of Indian citizens ,when Dalits are being thrashed ,security personnel get killed on the border when our ruling political class provokes the enemy country just to showoff the Indian voter (woo voters) that they are superior than other political parties. Modi should have strengthened  the country militarily, economically and cohesively as an answer to the huge mandate given by the voters on trust.

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By: Arti Bali

Senior Journalist

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