The idea that demonetisation would leave banks flush with household savings that they could lend to productive parts of the economy has been debunked.
The Indian central...
RSS chief Mohan Bhagwat has backtracked on his retirement rules. The ‘75-year rule’ was applied selectively to sideline some leaders, but it doesn’t apply to the top brass.
A public meeting, where the women voiced their protest, took place this month in Delhi, grounded on the findings of an AIDWA survey, covering 9,000 women borrowers.
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Putin sees this as a victory. Europeans have decided to deal with Trump on his terms for the sake of the larger Western alliance. We look at the lessons for us in India.
The rush to produce Demonetization a failure lacks data to back up its claims. The simply attribution of “Return of cash” to the RBI to claim Demonetization was a failure is absurd since the only real metric to decide the consequences of demonetization would be to notice the trend of tax compliance and fiscal inclusion in society. In that regard, the claim that demonetisation was a failure because the amount of cash returned to the RBI reached 99.3% is far from definitive. The Govt claims of destroying 3lakh crore of cash as black money have not come true – but that does not invalidate the rise in tax compliance , the growth of financial inclusion and the resurgence in rule of law.
I partly agree with the author. Mr. Rajiv Kumar’s comments are highly inappropriate. However, criticism of demonetization has to be factual and data-based. Blatant exaggerations such as demonetization having wiped out the entire MSME sector are totally unfounded. In India, the MSME sector ( Micro, Small & Medium enterprises) constitutes a vast network of over 63 million units and employs around 111 million people The share of MSMEs in total GDP is around 30 percent. About 97 percent MSMEs operate in informal sector and their share in gross output of MSME is about 34 percent As per National Accounts Statistics, 2012, the share of informal sector manufacturing MSMEs in total GDP is around 5 per cent. Now, had 30 per cent of the GDP been totally wiped out by demonetization, what could have been impact on the GDP? Even at its bottom pit, the GDP grew by 5.7 per cent in the quarter ended June 2017.
Another thing. Correlation between piling up of NPAs and demonetization is rather thin. Let us take the case of MSME sector, the most vulnerable sector according to critics of demonetization. MSMEforms just around 1.6 per cent of total credit by the banking sector. There was deceleration in MSME credit in the 2014-16 ( prior to demonetization ). This was due to slowdown in economic activity, rising NPAs and reclassification of food and agro-processing units from MSME segment to agriculture sector. Decline in bank credit to MSME sector due to demonetization was observed. However, as per Mint Street Memo no. 13, overall MSME credit cards and especially micro-credit to MSMEs shows a healthy rate of growth in recent quarters. In contrast, MSME exports were affected more adversely by issues related to GST implementation than demonetization due to delay in refund of upfront GST and input tax credit affecting cash driven working capital requirements. Thus the MSME sector is thriving again, though it received a set back due to demonetization. Its felt that the critics of demonetization are unduly inflating the cost of demonetization, may be due to political reasons.
Absolute illiterate view of the person who is incharge of NITI Ayog. If this is what a transformation institute is, only god can save the India.
Rajiv Kumar has to get back and learn his economics again.
The rush to produce Demonetization a failure lacks data to back up its claims. The simply attribution of “Return of cash” to the RBI to claim Demonetization was a failure is absurd since the only real metric to decide the consequences of demonetization would be to notice the trend of tax compliance and fiscal inclusion in society. In that regard, the claim that demonetisation was a failure because the amount of cash returned to the RBI reached 99.3% is far from definitive. The Govt claims of destroying 3lakh crore of cash as black money have not come true – but that does not invalidate the rise in tax compliance , the growth of financial inclusion and the resurgence in rule of law.
I partly agree with the author. Mr. Rajiv Kumar’s comments are highly inappropriate. However, criticism of demonetization has to be factual and data-based. Blatant exaggerations such as demonetization having wiped out the entire MSME sector are totally unfounded. In India, the MSME sector ( Micro, Small & Medium enterprises) constitutes a vast network of over 63 million units and employs around 111 million people The share of MSMEs in total GDP is around 30 percent. About 97 percent MSMEs operate in informal sector and their share in gross output of MSME is about 34 percent As per National Accounts Statistics, 2012, the share of informal sector manufacturing MSMEs in total GDP is around 5 per cent. Now, had 30 per cent of the GDP been totally wiped out by demonetization, what could have been impact on the GDP? Even at its bottom pit, the GDP grew by 5.7 per cent in the quarter ended June 2017.
Another thing. Correlation between piling up of NPAs and demonetization is rather thin. Let us take the case of MSME sector, the most vulnerable sector according to critics of demonetization. MSMEforms just around 1.6 per cent of total credit by the banking sector. There was deceleration in MSME credit in the 2014-16 ( prior to demonetization ). This was due to slowdown in economic activity, rising NPAs and reclassification of food and agro-processing units from MSME segment to agriculture sector. Decline in bank credit to MSME sector due to demonetization was observed. However, as per Mint Street Memo no. 13, overall MSME credit cards and especially micro-credit to MSMEs shows a healthy rate of growth in recent quarters. In contrast, MSME exports were affected more adversely by issues related to GST implementation than demonetization due to delay in refund of upfront GST and input tax credit affecting cash driven working capital requirements. Thus the MSME sector is thriving again, though it received a set back due to demonetization. Its felt that the critics of demonetization are unduly inflating the cost of demonetization, may be due to political reasons.
Absolute illiterate view of the person who is incharge of NITI Ayog. If this is what a transformation institute is, only god can save the India.
Rajiv Kumar has to get back and learn his economics again.