“Come to India if you want wealth and wellness. Come to India if you want health and wholeness. Come to India if you want prosperity with peace…You will always be welcome,” Prime Minister Modi spread a lot of hope and sunshine in snow-blanketed Davos while addressing the World Economic Forum Annual Summit last month. Being the first Indian PM going to Davos in 20 years, Mr. Modi was determined to make a strong impact by hard-selling the “New India”. In his stirring speech, interspersed with shlokas and quotes by Mahatma Gandhi and Rabindranath Tagore; PM Modi made a convincing case for investors to touch base with India. Citing recent data and surveys, he explained that India was open for business, emphasising that his government had streamlined the way with revamped policies and fast-tracked clearances and “Red tape is out, red carpet is in.” He rightly asserted that “New India” will be a $5 trillion economy by 2025, where Indian innovators will become ‘job givers’ and just not remain ‘job seekers’.
The PM also pitched hard against protectionism that has become increasingly visible in recent years. He slammed this trend saying, “Countries are becoming inward focused, globalisation is shrinking…this is no less a risk than terrorism and climate change”. He even chided the international community for only talking about lower carbon emissions, but not providing any resources or technology to deal with the challenge. Similarly, he also vented his disappointment with countries who are openly supporting terrorists…and splitting hair by talking of good and bad terrorism. PM Modi has delivered – both in India and now in Davos, now only time will tell if it’s working.
The Annual Economic Survey presented by the finance ministry’s economists, projects that the Indian economy will expand between 7% to 7.5% in 2018-19, a number not very different from that estimated by the World Bank and the IMF. History will likely recognise the implementation of the GST and the introduction of a Bankruptcy Code as fundamental structural reforms, and the survey acknowledges both. Apart from this the effort to recapitalise banks, addresses what is popularly called the ‘twin balance sheet’ problem (bad loans on the books of banks, and debt on the books of borrowers). The survey also points out that there is an increase in the number of enterprises that pay indirect taxes. The big picture presented by the survey is of an economy that is becoming increasingly tax compliant, and is poised for growth, although, as the document admits, there are still challenges when it comes to both consumption-driven growth and increasing private investment.
The major issues faced by the Modi Government are employment and the ongoing crisis in agriculture. The survey picks both as issues that need to be addressed immediately. Worryingly, it points out that “climate change might reduce farm incomes by 20-25% in medium term”. The solution will involve more science, but it should also involve more markets. For employment, the survey is right in listing “private investment and exports” as the only two “truly sustainable engines”. India would do well to focus its efforts on creating an environment conducive to private investment and on increasing its export competitiveness. That might well hold the key to creating jobs, although doing so against the countervailing forces of increasing automation and rapid strides in all will be difficult to achieve.
The World Economic Outlook Update from the IMF estimates that the Indian economy would perform well and will be the fastest growing economy in 2018 and 2019. China on the other hand notched 6.8% last year but is expected to decelerate to 6.6% in 2018 and slip further to 6.4% in 2019. Adding to the good news is the PwC Global CEOs survey which has seen India rising one place to become the fifth best investment destination in the world, overtaking Japan. This has been the result of concerted and committed implementation of structural reforms. The government has demonstrated strong dedication for upgrading infrastructure and upskilling the people, in addition to opening up several key sectors.
There’s a lot looking good for India but there are also some issues that need to be tackled on a war footing for India to truly be an outstanding and model country. One of them is the horrific fact from an Oxfam survey which declares that 1% of India has 73% of its wealth. This inequitable distribution of wealth could pave the way for many problems in the near future. The government is already looking at an ‘Ease of Living’ index and should actively explore some initiative to make India’s prosperity more inclusive.
It was something of a coup to get all the ten heads of state and government of the Association of South East Asian Nations (ASEAN) to congregate in Delhi. They were all invited as Chief Guests of the Republic Day parade and to attend the Indo-ASEAN Commemorative Summit that marks 25 years of their dialogue partnership. With America looking inward and withdrawing from the world, China has been flexing its economic and military might. Currently most of the ASEAN countries are heavily dependent on China to keep their economies going. But they are alarmed with the high-handed attitude of China in handling territorial disputes.
The ASEAN countries are now eagerly looking at India in being the counterweight in the region. Many of the countries are keen on boosting investments and economic ties with India. This is significant as India and the ASEAN countries have a combined population of 1.8 billion which is a quarter of the world population. The combined GDP is around $4.5 trillion and Indo-ASEAN trade has climbed to over $58 billion in 2016. There is much scope for developing tourism cooperation and more importantly maritime security among the member countries. With a lot in common like young populations, growing internet user bases and surging middle-class households there are tremendous opportunities for all countries. In fact, the next big idea could even be about Indian membership in ASEAN!
Students’ activities are core to BCAS and the Society takes several initiatives to promote them. The results of Final CA and IPCC examinations held in November 2017 were announced recently. On behalf of the Society, I take this opportunity to congratulate the new entrants to the profession and to those taking first steps in their quest to become CAs.
In order to encourage the young students passing CA to become members of BCAS, even this year the Society will be felicitating them with various benefits which has already been announced. If your articled clerk has secured a rank or you know about a rank holder in CA Finals, BCAS offers one-year membership free. Till date, I am happy that 22 rank holders have already become members of BCAS. I request all the members to encourage their students who have successfully qualified to become members of the BCAS and those serving articleship to become student members of BCAS.
At the Society, the flagship program – the 51st RRC at Mahabaleshwar held in January 2018 was a grand success. As a boost to the “Yuva Shakti”, 3 paper writers at the RRC were youth members and the participants applauded their presentations. The other highlight was the 3 hours Panel Discussion where the 4 panellists drawn from diverse backgrounds expressed their thoughts on variety of subjects on the profession. The participants immensely benefitted from the panel discussion. The Society has lined up a number of programs in the months of February and March. I request members to take benefit of the same.
Wishing you a Happy Budget, Happy Maha Shivaratri & a Colourful Holi ahead!
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With kind regards
CA. Narayan Pasari