Former finance minister P Chidambaram today said the "ghost" of demonetisation has come back to haunt the government and alleged that the Rs 2,000 notes were printed only to help hoarders.

In the wake of a cash crunch in some parts of the country, he also said there was a possibility that people have lost confidence in the banking system due to the "bank scams" and they were not putting their surplus money into the banks.

"The ghost of demonetisation has come back to haunt the Govt/RBI. Why are ATMs still being re-calibrated even 17 months after demonetisation?

"After demonetising 500 and 1000 rupee notes, Govt printed Rs 2000 notes! Now, Govt is complaining that Rs 2000 notes are being hoarded!! We always knew that Rs 2000 notes were printed only to help hoarders," he said in a series of tweets.

Dismissing the statement of the Reserve Bank of India that there was no shortage of currency in the system as "unsatisfactory", the senior Congress leader said if the RBI has printed and supplied sufficient cash, it must explain why there is a cash shortage.

"I also suspect that RBI seriously miscalculated demand for cash in the post-harvest season. Is it correct that currency in circulation has increased by only 2.75 percent since demonetisation? If so, I maintain that Govt/RBI are not allowing money supply to grow at the same rate as the nominal GDP," he said.

Chidambaram said he suspected ordinary people were withdrawing cash but not putting back into the banks their surplus cash.

"It is possible that there is some loss of confidence in the banking system, thanks to the bank scams," he said.

He said he supported the digitisation, but the government cannot force the pace of digitisation or arbitrarily reduce the supply of cash.

According to officials, cash position across the country is improving fast with over 80 percent of 2.2 lakh ATMs operating normally today.

Unusual spurt in demand for currency had led to many ATMs and banks running out of cash in Uttar Pradesh, Madhya Pradesh, Andhra Pradesh, Telengana and poll-bound Karnataka and some other states yesterday even as the government and the RBI assured the public that there was no currency shortage.

In the wake of cash crunch in some parts of the country, he also said there was a possibility that people have lost confidence in the banking system due to the "bank scams" and they were not putting their surplus money into the banks.

Former finance minister P Chidambaram today said the "ghost" of demonetisation has come back to haunt the government and alleged that the Rs 2,000 notes were printed only to help hoarders. In the wake of a cash crunch in some parts of the country, he also said there was a possibility that people have lost confidence in the banking system due to the "bank scams" and they were not putting their surplus money into the banks. "The ghost of demonetisation has come back to haunt the Govt/RBI. Why are ATMs still being re-calibrated even 17 months after demonetisation? "After demonetising 500 and 1000 rupee notes, Govt printed Rs 2000 notes! Now, Govt is complaining that Rs 2000 notes are being hoarded!! We always knew that Rs 2000 notes were printed only to help hoarders," he said in a series of tweets. Dismissing the statement of the Reserve Bank of India that there was no shortage of currency in the system as "unsatisfactory", the senior Congress leader said if the RBI has printed and supplied sufficient cash, it must explain why there is a cash shortage. "I also suspect that RBI seriously miscalculated demand for cash in the post-harvest season. Is it correct that currency in circulation has increased by only 2.75 percent since demonetisation? If so, I maintain that Govt/RBI are not allowing money supply to grow at the same rate as the nominal GDP," he said. Chidambaram said he suspected ordinary people were withdrawing cash but not putting back into the banks their surplus cash. "It is possible that there is some loss of confidence in the banking system, thanks to the bank scams," he said. He said he supported the digitisation, but the government cannot force the pace of digitisation or arbitrarily reduce the supply of cash. According to officials, cash position across the country is improving fast with over 80 percent of 2.2 lakh ATMs operating normally today. Unusual spurt in demand for currency had led to many ATMs and banks running out of cash in Uttar Pradesh, Madhya Pradesh, Andhra Pradesh, Telengana and poll-bound Karnataka and some other states yesterday even as the government and the RBI assured the public that there was no currency shortage.

'Ghost' of demonetisation has returned to haunt government: P Chidambaram

The World Bank on Monday noted that the Indian economy has recovered from the effects of demonetisation and the Goods and Services Tax (GST) and predicted a growth rate of 7.3 per cent for the country in 2018.

Further, the apex international financial institution forecast a rate of growth of 7.5 per cent for 2019 and 2020.

The World Bank in its twice-a-year South Asia Economic Focus report said that the growth is expected to accelerate from 6.7 per cent in 2017 to 7.3 per cent in 2018, and will subsequently stabilise, supported by a sustained recovery in private investment and private consumption.

The report also noted that India should strive to accelerate investments and exports to take advantage of the recovery in global growth.

Meanwhile, the bank also acknowledged that disruptions from demonetisation and the implementation of GST led to a setback in the economic activity, and a potentially larger negative effect on the poor and vulnerable.&nbsp;

The bank added that India would grow at 7.5% in 2019 and 2020

The World Bank on Monday noted that the Indian economy has recovered from the effects of demonetisation and the Goods and Services Tax (GST) and predicted a growth rate of 7.3 per cent for the country in 2018. Further, the apex international financial institution forecast a rate of growth of 7.5 per cent for 2019 and 2020. The World Bank in its twice-a-year South Asia Economic Focus report said that the growth is expected to accelerate from 6.7 per cent in 2017 to 7.3 per cent in 2018, and will subsequently stabilise, supported by a sustained recovery in private investment and private consumption. The report also noted that India should strive to accelerate investments and exports to take advantage of the recovery in global growth. Meanwhile, the bank also acknowledged that disruptions from demonetisation and the implementation of GST led to a setback in the economic activity, and a potentially larger negative effect on the poor and vulnerable.

Indian economy has recovered from demonetisation, GST: World Bank

Proper implementation of the Goods and Services Tax (GST) in India can be worked upon and is not an "unfixable problem", former RBI governor Raghuram Rajan has said, reiterating that demonetisation was "not a well-planned, well thought-out" move.

With the Modi government bringing in ambitious reforms like GST and demonetisation, Rajan said it would be good if such measures were better implemented.

"On the Goods and Services Tax, we will figure it out eventually. It will be nice if we could implement much better than we do. But it's (GST) not an unfixable problem. We can work on it. I wouldn't give up hope at this point on that," Rajan told an audience at the Harvard Kennedy School in Cambridge yesterday.

Rajan, who is currently the Katherine Dusak Miller Distinguished Service Professor of Finance at The University of Chicago's Booth School of Business, gave the 2018 Albert H Gordon Lecture on the topic 'Leverage, Financial Crises, and Policies to Raise Economic Growth'. He was asked about the "shoddy implementation" of big-ticket reforms like GST and demonetisation in India.

On demonetisation, Rajan rejected the claim that the Reserve Bank of India had not been consulted by the government before it went on to declare 1,000 and 500-rupee currency notes as illegal tender in November 2016. He however reiterated that the move to cancel 87.5 per cent of the currency value was "not a good idea".

"I didn't ever say that I wasn't consulted (on demonetisation). In fact, I have made it quite clear that we were consulted and we didn't think it was a good idea," Rajan said.

He said demonetisation "was not a well-planned, well thought-out, useful exercise and I told the government that when the idea was first mooted," he said adding that any macro-economist would say that if 87.5 per cent of the currency is being demonetised, then it better be made sure that a similar amount of currency is printed and ready to be put back in circulation.

"India went into it without having done that. It had a negative economic impact but also the idea was that somehow people who had money stored in their basements without having paid taxes on it would overnight see religion and come to the government and say 'sorry we were hiding this stuff, let me pay taxes on it'," Rajan said, calling it a "naive view".

"Anybody who knows India, knows that very quickly we find ways around the system," he said adding that with "essentially" all the money that was demonetised coming back into the system, the exercise did not have the direct effect that was sought.

While the longer term impact of demonetisation is yet to be seen, its negative economic impact included people not having currency, not being able to pay and economic activity plummeting especially in the informal sector. 
 
"There may be some longer term impact that people think that if this sort of thing happens then the government is serious about collecting taxes. There may be greater tax payments but we still have to see strong evidence that that is true," he said.

Rajan also expressed concern that a lot of people probably lost their jobs due to demonetisation but that has not been counted well as it would be mostly in the informal sector.

"The positive impacts (of demonetisation) are out there in the future. We have no idea whether they will be important. To my mind it was not a policy that was useful at that time," he said.

To a suggestion that demonetisation could have positively impacted growth, Rajan said "you would have to find a new economic theory to explain how it helped the economy".

He said most estimates of the cost of demonetisation vary between 1.5-2 per cent of the GDP.

"It would be a really die-hard government advocate who would say that the growth benefits of demonetisation were immediate," he said.

"Most of the supporters of the move would say that the benefits of the move are coming by changing the incentive to pay taxes. I would say yes, we will have to wait and see whether that in fact is true," he said.

On the problem of non-performing assets and making a reference to the Nirav Modi-PNB scandal, Rajan said it is worrisome that some Indian banks have antiquated systems.

A part of the Punjab National Bank scam was cyber-related and there is a need to go into the details of how the fraud came to be, he said.

"It turns out that we don't need to be really clever in the Indian system to make away with a billion dollars. Some of these banks have antiquated systems also....Your worry is that the systems are not adequate to prevent rogue dealers, rogue employees colluding and making off with stuff. That is the fraud part," he said.

He added that bad loans do not necessarily come from fraud, they come from "irrational exuberance".

 
&nbsp

Proper implementation of the Goods and Services Tax (GST) in India can be worked upon and is not an 'unfixable problem', former RBI governor Raghuram Rajan has said, reiterating that demonetisation was 'not a well-planned, well thought-out' move

Proper implementation of the Goods and Services Tax (GST) in India can be worked upon and is not an "unfixable problem", former RBI governor Raghuram Rajan has said, reiterating that demonetisation was "not a well-planned, well thought-out" move. With the Modi government bringing in ambitious reforms like GST and demonetisation, Rajan said it would be good if such measures were better implemented. "On the Goods and Services Tax, we will figure it out eventually. It will be nice if we could implement much better than we do. But it's (GST) not an unfixable problem. We can work on it. I wouldn't give up hope at this point on that," Rajan told an audience at the Harvard Kennedy School in Cambridge yesterday. Rajan, who is currently the Katherine Dusak Miller Distinguished Service Professor of Finance at The University of Chicago's Booth School of Business, gave the 2018 Albert H Gordon Lecture on the topic 'Leverage, Financial Crises, and Policies to Raise Economic Growth'. He was asked about the "shoddy implementation" of big-ticket reforms like GST and demonetisation in India. On demonetisation, Rajan rejected the claim that the Reserve Bank of India had not been consulted by the government before it went on to declare 1,000 and 500-rupee currency notes as illegal tender in November 2016. He however reiterated that the move to cancel 87.5 per cent of the currency value was "not a good idea". "I didn't ever say that I wasn't consulted (on demonetisation). In fact, I have made it quite clear that we were consulted and we didn't think it was a good idea," Rajan said. He said demonetisation "was not a well-planned, well thought-out, useful exercise and I told the government that when the idea was first mooted," he said adding that any macro-economist would say that if 87.5 per cent of the currency is being demonetised, then it better be made sure that a similar amount of currency is printed and ready to be put back in circulation. "India went into it without having done that. It had a negative economic impact but also the idea was that somehow people who had money stored in their basements without having paid taxes on it would overnight see religion and come to the government and say 'sorry we were hiding this stuff, let me pay taxes on it'," Rajan said, calling it a "naive view". "Anybody who knows India, knows that very quickly we find ways around the system," he said adding that with "essentially" all the money that was demonetised coming back into the system, the exercise did not have the direct effect that was sought. While the longer term impact of demonetisation is yet to be seen, its negative economic impact included people not having currency, not being able to pay and economic activity plummeting especially in the informal sector. "There may be some longer term impact that people think that if this sort of thing happens then the government is serious about collecting taxes. There may be greater tax payments but we still have to see strong evidence that that is true," he said. Rajan also expressed concern that a lot of people probably lost their jobs due to demonetisation but that has not been counted well as it would be mostly in the informal sector. "The positive impacts (of demonetisation) are out there in the future. We have no idea whether they will be important. To my mind it was not a policy that was useful at that time," he said. To a suggestion that demonetisation could have positively impacted growth, Rajan said "you would have to find a new economic theory to explain how it helped the economy". He said most estimates of the cost of demonetisation vary between 1.5-2 per cent of the GDP. "It would be a really die-hard government advocate who would say that the growth benefits of demonetisation were immediate," he said. "Most of the supporters of the move would say that the benefits of the move are coming by changing the incentive to pay taxes. I would say yes, we will have to wait and see whether that in fact is true," he said. On the problem of non-performing assets and making a reference to the Nirav Modi-PNB scandal, Rajan said it is worrisome that some Indian banks have antiquated systems. A part of the Punjab National Bank scam was cyber-related and there is a need to go into the details of how the fraud came to be, he said. "It turns out that we don't need to be really clever in the Indian system to make away with a billion dollars. Some of these banks have antiquated systems also....Your worry is that the systems are not adequate to prevent rogue dealers, rogue employees colluding and making off with stuff. That is the fraud part," he said. He added that bad loans do not necessarily come from fraud, they come from "irrational exuberance".

Implementation of GST not 'unfixable' problem: Ex RBI governor Raghuram Rajan

Nepali Prime Minister KP Sharma Oli will press India to exchange millions of dollars held in Nepal in banned high-value Indian bank notes during a visit this week to improve ties with its large southern neighbour.

Nepal and India have yet to agree on how to exchange old Indian bank notes estimated to be worth $146 million held by individuals and informal sectors after India’s shock announcement in 2016 to ban 500 and 1,000 rupee bills.

India said the move was aimed at flushing out unaccounted wealth and hit the finances of militants suspected of using fake currency to fund operations. But it also caught countries such as Nepal and Bhutan, where the Indian currency is widely used, off-guard.

“The Indian demonetisation has hurt Nepali nationals. I will raise this in my meetings with Indian leaders and request them to resolve the issue,” Oli told Nepali parliament late on Tuesday.

India is Nepal's largest trade partner and the supplier of the bulk of consumer goods. Indian currency is widely used by businesses and individuals who keep their savings at homes in Indian bank notes.

Oli will meet Indian Prime Minister Narendra Modi and President Ram Nath Kovind and other officials during the visit starting on Friday.

Central Nepal Rastra Bank (NRB) officials say the Reserve Bank of India (RBI) verbally agreed to allow every Nepali national to exchange up to 4,500 rupees worth of scrapped Indian bank notes in a meeting in March last year.

"But nothing has been communicated to us formally so far," NRB Deputy Governor Chinta Mani Shivakoti told Reuters.

A senior Indian government official, with direct knowledge of the RBI's views, said the central bank was unable to exchange the old currency notes in Nepal or any other country because there was no such provision made in the rules that the government issued at the time of demonetisation.

"Only the federal government can take a decision in this regard now," the official said.

Indian citizens were given nearly two months to exchange their old notes for new ones.

Nepali Prime Minister KP Sharma Oli will be visiting India this week

Nepali Prime Minister KP Sharma Oli will press India to exchange millions of dollars held in Nepal in banned high-value Indian bank notes during a visit this week to improve ties with its large southern neighbour. Nepal and India have yet to agree on how to exchange old Indian bank notes estimated to be worth $146 million held by individuals and informal sectors after India’s shock announcement in 2016 to ban 500 and 1,000 rupee bills. India said the move was aimed at flushing out unaccounted wealth and hit the finances of militants suspected of using fake currency to fund operations. But it also caught countries such as Nepal and Bhutan, where the Indian currency is widely used, off-guard. “The Indian demonetisation has hurt Nepali nationals. I will raise this in my meetings with Indian leaders and request them to resolve the issue,” Oli told Nepali parliament late on Tuesday. India is Nepal's largest trade partner and the supplier of the bulk of consumer goods. Indian currency is widely used by businesses and individuals who keep their savings at homes in Indian bank notes. Oli will meet Indian Prime Minister Narendra Modi and President Ram Nath Kovind and other officials during the visit starting on Friday. Central Nepal Rastra Bank (NRB) officials say the Reserve Bank of India (RBI) verbally agreed to allow every Nepali national to exchange up to 4,500 rupees worth of scrapped Indian bank notes in a meeting in March last year. "But nothing has been communicated to us formally so far," NRB Deputy Governor Chinta Mani Shivakoti told Reuters. A senior Indian government official, with direct knowledge of the RBI's views, said the central bank was unable to exchange the old currency notes in Nepal or any other country because there was no such provision made in the rules that the government issued at the time of demonetisation. "Only the federal government can take a decision in this regard now," the official said. Indian citizens were given nearly two months to exchange their old notes for new ones.

Nepal has $146 million in demonetised notes, wants India to change them

Responding to a question in Malaysia&nbsp;on how the <a href="http://www.wionews.com/india-news/rahul-gandhi-discusses-jobs-economy-in-singapore-35059" target="_blank">Congress </a>would have rolled out demonetisation, Rahul Gandhi said he would have thrown the proposal for demonetisation in a dustbin.

Also read: <a href="http://www.wionews.com/india-news/rahul-gandhi-discusses-jobs-economy-in-singapore-35059" target="_blank">Rahul Gandhi discusses jobs, </a><a href="http://www.wionews.com/india-news/rahul-gandhi-discusses-jobs-economy-in-singapore-35059" target="_blank">economy</a><a href="http://www.wionews.com/india-news/rahul-gandhi-discusses-jobs-economy-in-singapore-35059" target="_blank"> in Singapore</a>

He said that demonetisation was &quot;not a good&quot; initiative and if he were the prime minister he would have thrown the proposal in a dustbin.

Gandhi was speaking in Malaysia with an &quot;enthusiastic gathering&quot; of the Indian diaspora in Kuala Lumpur.

Asked how he would have rolled out demonetisation differently, Gandhi said: &quot;if I was the Prime Minister and somebody would have given me a file with demonetisation written on it, I would thrown it in the dustbin, out of the door and into the junkyard.&quot;

&quot;That is how I would have rolled it out because that is what I think should have been done with the demonetisation which was not good at all,&quot; he said.

Congress has been very critical of Demonetisation since its roll-out.&nbsp;

Earlier at the University of California, Gandhi had called the move as &quot; reckless and dangerous&quot; decision taken by Prime Minister Modi.

Rahul Gandhi is on a <a href="http://www.wionews.com/india-news/singapore-author-questions-rahul-gandhi-on-family-rule-twitter-on-fire-35211" target="_blank">five-day trip to the Southeast Asian countries</a>.

(With inputs from PTI)

Responding to a question in Malaysia, on how the Congress would have rolled out demonetisation, Rahul Gandhi said he would have thrown the proposal for demonetisation in a dustbin

Responding to a question in Malaysia on how the Congress would have rolled out demonetisation, Rahul Gandhi said he would have thrown the proposal for demonetisation in a dustbin. Also read: Rahul Gandhi discusses jobs, economy in Singapore He said that demonetisation was "not a good" initiative and if he were the prime minister he would have thrown the proposal in a dustbin. Gandhi was speaking in Malaysia with an "enthusiastic gathering" of the Indian diaspora in Kuala Lumpur. Asked how he would have rolled out demonetisation differently, Gandhi said: "if I was the Prime Minister and somebody would have given me a file with demonetisation written on it, I would thrown it in the dustbin, out of the door and into the junkyard." "That is how I would have rolled it out because that is what I think should have been done with the demonetisation which was not good at all," he said. Congress has been very critical of Demonetisation since its roll-out. Earlier at the University of California, Gandhi had called the move as " reckless and dangerous" decision taken by Prime Minister Modi. Rahul Gandhi is on a five-day trip to the Southeast Asian countries. (With inputs from PTI)

If I were PM, would have thrown demonetisation proposal in dustbin: Rahul Gandhi

Moody&#39;s Investors Service today estimated that India will grow 7.6 per cent in calendar year 2018 and 7.5 per cent in 2019, amid signs of economic recovery from impact of demonetisation and GST.

&quot;There are some signs that the Indian economy is starting to recover from the soft growth patch attributed to the negative impact of the demonetisation undertaken in 2016 and disruption related to last year?s rollout of the Goods and Service Tax,&quot; it said.

The Budget for 2018-19 includes some measures that could stabilise the rural economy that was disproportionately hit by the demonetization policy and is yet to recover, it said.

&quot;As we have said before, the bank recapitalisation plan should also help credit growth over time, thereby supporting growth,&quot; Moody&#39;s said.&nbsp;

'There are some signs that the Indian economy is starting to recover from the soft growth patch attributed to the negative impact of the demonetisation undertaken in 2016 and disruption related to last year?s rollout of the Goods and Service Tax,' said Moody's

Moody's Investors Service today estimated that India will grow 7.6 per cent in calendar year 2018 and 7.5 per cent in 2019, amid signs of economic recovery from impact of demonetisation and GST. "There are some signs that the Indian economy is starting to recover from the soft growth patch attributed to the negative impact of the demonetisation undertaken in 2016 and disruption related to last year?s rollout of the Goods and Service Tax," it said. The Budget for 2018-19 includes some measures that could stabilise the rural economy that was disproportionately hit by the demonetization policy and is yet to recover, it said. "As we have said before, the bank recapitalisation plan should also help credit growth over time, thereby supporting growth," Moody's said.

India to grow at 7.6% in 2018: Moody's

India&#39;s economy grew at its fastest pace in a year in the October-December quarter as consumers, businesses and the government stepped up spending, a Reuters poll predicted.

This suggests that disruptions from a shock ban on high-value currency notes in November 2016 and the chaotic launch of a goods and services tax (GST) in July are fading.

Gross domestic product grew 6.9 percent in the October-December quarter from a year earlier, according to the poll of more than 35 economists, taken over the past week.

If the data, due at 1200 GMT on Feb. 28, matches the consensus, the quarter will have the best growth rate in 2017.

In July-September, the economy grew 6.3 percent annually, a return to a faster growth trajectory after five consecutive quarters of slowdown.

In the latest quarter, &quot;government spending was stronger and private consumption demand was robust as well, as seen in strong growth in auto sales,&quot; said Abhishek Upadhyay, economist at ICICI Securities PD.

&quot;Recent buoyancy in indicators such as cement output also points to recovery in segments such as construction, and real estate that were hit most from demonetization.&quot;

Still, growth in the world&#39;s seventh largest economy is far from the near-double digits pace recorded during the years before the financial crisis.

What has also weighed on the economy is exports, which took a hit last year from an appreciating rupee, which strengthened 6.5 percent against the dollar in 2017.

While down around 1 percent this year, the rupee is not expected to weaken significantly, according to a separate Reuters poll of foreign exchange strategists.

CONCERN ON BANKING

Economists in the latest poll were also concerned about the increase in non-performing assets of state-run banks, and said if they are not handled effectively it would hurt economic activity.

Adding to those worries, the second biggest state lender, Punjab National Bank this month revealed a loan fraud that&#39;s the biggest in India&#39;s banking history.

The fraud has cast a shadow over the workings of state-run lenders, already reeling from accumulated bad loans accumulated that are higher than those of banks in most major economies.

While stress on bank balance sheets is a drag and the clean-up exercise &quot;may still take time&quot;, it&#39;s likely that economic growth should get better, Upadhyay said.

The poll also predicted India&#39;s gross value-added (GVA) - the growth measure that the government prefers - increased 6.6 percent from a year earlier in October-December from a year earlier, compared to 6.1 percent in the prior three months.

That should provide some relief to the Reserve Bank of India which is performing a delicate balancing act of monitoring inflation and nurturing growth.

Retail inflation eased in January after a 17-month spike in December, but was still above the 4 percent medium-term target of the central bank.

While the RBI kept rates on hold at its Feb. 7 meeting, the minutes showed monetary committee members concerned about the rising inflation rate.

The Reuters poll suggests disruptions from demonetisation and GST are are fading

India's economy grew at its fastest pace in a year in the October-December quarter as consumers, businesses and the government stepped up spending, a Reuters poll predicted. This suggests that disruptions from a shock ban on high-value currency notes in November 2016 and the chaotic launch of a goods and services tax (GST) in July are fading. Gross domestic product grew 6.9 percent in the October-December quarter from a year earlier, according to the poll of more than 35 economists, taken over the past week. If the data, due at 1200 GMT on Feb. 28, matches the consensus, the quarter will have the best growth rate in 2017. In July-September, the economy grew 6.3 percent annually, a return to a faster growth trajectory after five consecutive quarters of slowdown. In the latest quarter, "government spending was stronger and private consumption demand was robust as well, as seen in strong growth in auto sales," said Abhishek Upadhyay, economist at ICICI Securities PD. "Recent buoyancy in indicators such as cement output also points to recovery in segments such as construction, and real estate that were hit most from demonetization." Still, growth in the world's seventh largest economy is far from the near-double digits pace recorded during the years before the financial crisis. What has also weighed on the economy is exports, which took a hit last year from an appreciating rupee, which strengthened 6.5 percent against the dollar in 2017. While down around 1 percent this year, the rupee is not expected to weaken significantly, according to a separate Reuters poll of foreign exchange strategists. CONCERN ON BANKING Economists in the latest poll were also concerned about the increase in non-performing assets of state-run banks, and said if they are not handled effectively it would hurt economic activity. Adding to those worries, the second biggest state lender, Punjab National Bank this month revealed a loan fraud that's the biggest in India's banking history. The fraud has cast a shadow over the workings of state-run lenders, already reeling from accumulated bad loans accumulated that are higher than those of banks in most major economies. While stress on bank balance sheets is a drag and the clean-up exercise "may still take time", it's likely that economic growth should get better, Upadhyay said. The poll also predicted India's gross value-added (GVA) - the growth measure that the government prefers - increased 6.6 percent from a year earlier in October-December from a year earlier, compared to 6.1 percent in the prior three months. That should provide some relief to the Reserve Bank of India which is performing a delicate balancing act of monitoring inflation and nurturing growth. Retail inflation eased in January after a 17-month spike in December, but was still above the 4 percent medium-term target of the central bank. While the RBI kept rates on hold at its Feb. 7 meeting, the minutes showed monetary committee members concerned about the rising inflation rate.

GDP growth in October-December likely to be 6.9%, best in 2017: Poll

America&#39;s bilateral trade deficit with four major countries, including India, narrowed in the first three quarters of 2017 as compared to the previous year, the US administration said in a report according to which India&#39;s growth has slowed due to the effects of its structural economic reforms.

The Economic Report of the President (ERP) that shows a path for continued growth and paints a rosy picture for the American economy, alleges that countries, including India and Brazil - both GATT signatories since 1948 - have been far less open, preserving high bound rates and avoiding universal binding coverage.

&quot;Growth in India has slowed due to the effects of its structural economic reforms. India&#39;s demonetisation of large-denomination notes in November 2016 invalidated 86 per cent of the cash in circulation in an economy where more than 90 per cent of transactions were cash-based,&quot; it said.

&quot;The introduction in July 2017 of a single, country-wide sales tax replaced a vast number of different state and local tax rates, and has created short-term uncertainty,&quot; the report noted. 
The report expressed concern over increasing share of non-performing loans (NPLs) in India&#39;s banking sector, which it said poses further risks.

According to country-sourced statistics provided to the IMF, NPLs as a share of all loans in India stood at 9.7 per cent in the third quarter of 2017, compared with 1.7 per cent in China (IMF 2017).

&quot;NPLs have increased at an alarming rate in recent years, with the current NPL slippage ratio in India almost double that in FY 2014/15 (IMF 2017b). Public sector banks, with the State Bank of India as a leading example, account for the lion&#39;s share of NPLs in the banking sector,&quot; it said.

The Reserve Bank of India predicts that gross NPLs as a proportion of all loans will increase to 10.8 per cent in the first quarter of 2018, and to 11. 1 per cent by September 2018.

&quot;However, the stress of India&#39;s banking sector may be ameliorated in the future, given that the government recently announced a $ 32.4 billion package to recapitalise publicly- owned banks,&quot; the report said.

Noting that India has been the most frequent user of anti-dumping measures, the White House said delays in the approval of agricultural products derived from biotechnology in China, the EU, India, and other countries result in increased market uncertainty among technology providers, farmers, and traders of US corn, soy, cotton, and alfalfa&mdash;leading to reduced exports of these products.

The Trump administration also blamed India for not implementing the WTO ruling on poultry.

&quot;India has failed to revise its requirements for poultry in a manner that would allow for US imports, and the case continues to be litigated in the WTO,&quot; it said.

&quot;Since 2007, India has restricted various US agricultural products, including poultry meat, eggs, and live pigs, supposedly to prevent the entry of avian influenza into India,&quot; the report said.

The US has maintained that no scientific basis supports the ban.

In March 2012, the US initiated a WTO dispute by requesting consultations with India.

In emerging and developing economies, such as Brazil, China, India, Russia, and certain other countries in Africa, Asia, and Latin America, strengthening the external environment continues to help output growth recover.

&quot;There are, however, certain risks to future growth. As monetary policy normalises with higher interest rates in advanced economies, emerging and developing economies could face an outflow of capital,&quot; it said.

&quot;Financial stability risks are also increasing due to the increase in nonperforming loans on the private sector balance sheets of two of the biggest and fastest-growing emerging market economies - China and India.

Credit growth in China has arguably also become excessive, as it continues to shift from growth led by exports and investment to an economy led by internal demand,&quot; it said.&nbsp;

'Growth in India has slowed due to the effects of its structural economic reforms. India's demonetisation of large-denomination notes in November 2016 invalidated 86 per cent of the cash in circulation in an economy where more than 90 per cent of transactions were cash-based, Economic Report said

America's bilateral trade deficit with four major countries, including India, narrowed in the first three quarters of 2017 as compared to the previous year, the US administration said in a report according to which India's growth has slowed due to the effects of its structural economic reforms. The Economic Report of the President (ERP) that shows a path for continued growth and paints a rosy picture for the American economy, alleges that countries, including India and Brazil - both GATT signatories since 1948 - have been far less open, preserving high bound rates and avoiding universal binding coverage. "Growth in India has slowed due to the effects of its structural economic reforms. India's demonetisation of large-denomination notes in November 2016 invalidated 86 per cent of the cash in circulation in an economy where more than 90 per cent of transactions were cash-based," it said. "The introduction in July 2017 of a single, country-wide sales tax replaced a vast number of different state and local tax rates, and has created short-term uncertainty," the report noted. The report expressed concern over increasing share of non-performing loans (NPLs) in India's banking sector, which it said poses further risks. According to country-sourced statistics provided to the IMF, NPLs as a share of all loans in India stood at 9.7 per cent in the third quarter of 2017, compared with 1.7 per cent in China (IMF 2017). "NPLs have increased at an alarming rate in recent years, with the current NPL slippage ratio in India almost double that in FY 2014/15 (IMF 2017b). Public sector banks, with the State Bank of India as a leading example, account for the lion's share of NPLs in the banking sector," it said. The Reserve Bank of India predicts that gross NPLs as a proportion of all loans will increase to 10.8 per cent in the first quarter of 2018, and to 11. 1 per cent by September 2018. "However, the stress of India's banking sector may be ameliorated in the future, given that the government recently announced a $ 32.4 billion package to recapitalise publicly- owned banks," the report said. Noting that India has been the most frequent user of anti-dumping measures, the White House said delays in the approval of agricultural products derived from biotechnology in China, the EU, India, and other countries result in increased market uncertainty among technology providers, farmers, and traders of US corn, soy, cotton, and alfalfa—leading to reduced exports of these products. The Trump administration also blamed India for not implementing the WTO ruling on poultry. "India has failed to revise its requirements for poultry in a manner that would allow for US imports, and the case continues to be litigated in the WTO," it said. "Since 2007, India has restricted various US agricultural products, including poultry meat, eggs, and live pigs, supposedly to prevent the entry of avian influenza into India," the report said. The US has maintained that no scientific basis supports the ban. In March 2012, the US initiated a WTO dispute by requesting consultations with India. In emerging and developing economies, such as Brazil, China, India, Russia, and certain other countries in Africa, Asia, and Latin America, strengthening the external environment continues to help output growth recover. "There are, however, certain risks to future growth. As monetary policy normalises with higher interest rates in advanced economies, emerging and developing economies could face an outflow of capital," it said. "Financial stability risks are also increasing due to the increase in nonperforming loans on the private sector balance sheets of two of the biggest and fastest-growing emerging market economies - China and India. Credit growth in China has arguably also become excessive, as it continues to shift from growth led by exports and investment to an economy led by internal demand," it said.

India's growth slowed due to demonetisation, GST: USA

Congress president Rahul Gandhi on Saturday launched a blistering attack on Prime Minister Narendra Modi, pinning the Punjab National Bank scam on him and said he is answerable to the nation as 90 per cent of the fraudulent transactions had taken place during his tenure.&nbsp;

&ldquo;This is a 22,000 crore scam,&rdquo; he said, nearly doubling the fraud amount of Rs 11,400 crore that was revealed by the PNB to the Security Exchange Board of India on Wednesday. The bank has since then accepted that the fraud amount could be higher but has not disclosed the exact figure.&nbsp;

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This Rs 22,000 Crore scam cannot have been done without a high level protection. It must have been known by the people in government beforehand otherwise it is not possible. PM will have to come forward and answer questions: Rahul Gandhi <a href="https://twitter.com/hashtag/PNBFraudCase?src=hash&amp;ref_src=twsrc%5Etfw">#PNBFraudCase</a> <a href="https://t.co/tPDTpxBa7D">pic.twitter.com/tPDTpxBa7D</a>
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/964837482796810240?ref_src=twsrc%5Etfw">February 17, 2018</a></blockquote>
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Nirav Modi managed&nbsp;to take away Rs 22000 crore but&nbsp;PM is not able to tell us how he managed this scam, he added.

The scam of this magnitude cannot have been done without a high-level protection, Gandhi said and added that it must have been known by the people in government beforehand otherwise it is not possible.&nbsp;

PM will have to come forward and answer these questions, he added.&nbsp;

Linking the scam to PM Modi&rsquo;s decision to demonetise Rs 500 and Rs 1,000 currency notes, he said that the scam had started on November 8, 2016.

&ldquo;On that day, PM&nbsp;took the entire nation&rsquo;s money and put this into banks. Now, his friends and cronies have stolen that money from the banks,&rdquo; the Congress president said.

On allegations against the UPA government, he said that this is done to divert the attention from the real issue.

This Rs 22,000 Crore scam cannot have been done without a high-level protection, Gandhi said

Congress president Rahul Gandhi on Saturday launched a blistering attack on Prime Minister Narendra Modi, pinning the Punjab National Bank scam on him and said he is answerable to the nation as 90 per cent of the fraudulent transactions had taken place during his tenure. “This is a 22,000 crore scam,” he said, nearly doubling the fraud amount of Rs 11,400 crore that was revealed by the PNB to the Security Exchange Board of India on Wednesday. The bank has since then accepted that the fraud amount could be higher but has not disclosed the exact figure. This Rs 22,000 Crore scam cannot have been done without a high level protection. It must have been known by the people in government beforehand otherwise it is not possible. PM will have to come forward and answer questions: Rahul Gandhi #PNBFraudCase pic.twitter.com/tPDTpxBa7D — ANI (@ANI) February 17, 2018 × Nirav Modi managed to take away Rs 22000 crore but PM is not able to tell us how he managed this scam, he added. The scam of this magnitude cannot have been done without a high-level protection, Gandhi said and added that it must have been known by the people in government beforehand otherwise it is not possible. PM will have to come forward and answer these questions, he added. Linking the scam to PM Modi’s decision to demonetise Rs 500 and Rs 1,000 currency notes, he said that the scam had started on November 8, 2016. “On that day, PM took the entire nation’s money and put this into banks. Now, his friends and cronies have stolen that money from the banks,” the Congress president said. On allegations against the UPA government, he said that this is done to divert the attention from the real issue.

Demonetisation a catalyst for Modi's friends and cronies to loot Indian banks: Rahul Gandhi

In a recent television interview, Former RBI governor Raghuram Rajan spoke about the long-term advantages of the two major economic moves of the Modi government -- the Goods and Service Tax and demonetisation.&nbsp;

He attributed a slowdown in growth to the after-effects of 2016 demonetisation move.&nbsp;

According to Rajan, the advantages of demonetisation should emerge in the future. He also noted that the move promoted digital payments in the country.&nbsp;

Rajan noted GST to have &quot;very positive&quot; long-term effects.&nbsp;

Vice President Venkaiah Naidu also <a href="http://www.wionews.com/india-news/gst-is-in-place-to-strengthen-the-economy-says-vice-president-venkaiah-naidu-30561">shared his views on GST recently</a>.&nbsp;

The vice president noted that the tax &quot;reveals the cost to the manufacturer and benefits the consumer by reduced prices.&quot;&nbsp;

Not only the producers but the retailers also reap benefits as no sales without a bill eliminates corruption.&nbsp;

&quot;5.9 million people have registered to file GST and 20.2 million people pay taxes. Microfinance, cashless payments are increasing and strengthening the economy. Everybody is responsible for making the change and we should take everyone&#39;s opinion,&quot; he added.

(With inputs from agencies)

Vice President Venkaiah Naidu also shared his views on GST recently.

In a recent television interview, Former RBI governor Raghuram Rajan spoke about the long-term advantages of the two major economic moves of the Modi government -- the Goods and Service Tax and demonetisation. He attributed a slowdown in growth to the after-effects of 2016 demonetisation move. According to Rajan, the advantages of demonetisation should emerge in the future. He also noted that the move promoted digital payments in the country. Rajan noted GST to have "very positive" long-term effects. Vice President Venkaiah Naidu also shared his views on GST recently. The vice president noted that the tax "reveals the cost to the manufacturer and benefits the consumer by reduced prices." Not only the producers but the retailers also reap benefits as no sales without a bill eliminates corruption. "5.9 million people have registered to file GST and 20.2 million people pay taxes. Microfinance, cashless payments are increasing and strengthening the economy. Everybody is responsible for making the change and we should take everyone's opinion," he added. (With inputs from agencies)

GST will have 'very positive' long-term effects: Raghuram Rajan

Even ordinarily, every Union Budget is important. But the Budget for 2018-19 has an added significance for a number of reasons, which is why February 1 is being so keenly anticipated. External factors, as certainly as internal economic dynamics, have always influenced Budget proposals. This time will be no different, except that those external factors, given the way they have got arranged, should have a greater political import than would normally have been the case.

&nbsp;

Many people had hoped to get a teaser on the Budget in Prime Minister Narendra Modi&rsquo;s first interview of this year, given to Zee News recently. But he did not oblige, merely reiterating that the forthcoming Budget would proceed in the direction of reforms that his Government had initiated and carried forward since May 2014. In a subsequent interview to another television channel, the Prime Minister was no more forthcoming &mdash; he only said that people were not enamoured of sops; they preferred to be gainfully empowered.

&nbsp;

The Union Budget 2018-19 will be interesting for the following reasons. It will be the first national Budget since the implementation of the Goods and Services Tax (GST) regime and the disruption in the economy that resulted as a consequence. It will also be the last full Budget before the Lok Sabha election in mid-2019. It comes soon after the Gujarat Assembly election result, which offers many lessons to the ruling Bharatiya Janata Party at the Centre. And, it shall be presented months before a spate of Assembly elections that are scheduled in the major States, the outcome of which could depend, inter alia, on what the Budget offers.&nbsp;

&nbsp;

The Union Budget for 2018-19 will also, incidentally, be placed just days after Prime Minister Modi returns from the World Economic Forum meeting in Davos, where the Indian business story gets hard-sold to an international audience. This cocktail of circumstances makes the coming Budget special.

&nbsp;

There is speculation on what the Budget does to counter the disruption in economic growth consequent to GST &mdash; and, earlier, demonetisation. It is true that the BJP has through its recent electoral wins demonstrated that the people have by and large endorsed the twin measures. But economic management is a different kettle of fish.&nbsp;

&nbsp;

While international agencies, such as the World Bank have hailed GST and demonetisation, they have also pointed to the immediate after-effects that need fixing. GDP growth is expected to be about seven per cent, down from&nbsp; 8.6 per cent in 2015. The best case scenario projects growth to touch 7.3 per cent by this year-end. Sustained growth is essential to both the reduction of poverty and enhancement of employment opportunities. The contraction in manufacturing and to an extent the services sector is seen as a fallout of the GST.

&nbsp;

Given that the most affected have been businessmen and small traders &mdash; both being strong vote-banks of the BJP &mdash; the Budget is expected to address the concerns. How this would be done, remains in the speculative realm. There is also talk that the Government may bite the bullet by drastically overhauling the personal income tax system to provide a big relief to the salaried middle class, yet another important constituent of the ruling party.&nbsp;

&nbsp;

Post Davos, international investors will watch carefully the Budget proposals to see whether further concrete steps are taken to enhance the ease of doing business. Now that India has moved several places high to be among the 100 top nations in the &lsquo;ease of doing business&rsquo; ranking of the World Bank, expectations are higher.&nbsp;

&nbsp;

It&rsquo;s true that the Government has abolished dozens of archaic laws that impeded business growth, relaxed foreign direct investment (FDI) norms in various sectors, and established a rule-based transparent mechanism in dealings. But investors will would want to know if the Government is willing to put its own money where its mouth is &mdash; that is, show the way to the private sector through massive public investments without compromising on its fiscal deficit target.&nbsp;

&nbsp;

But the real challenge before the Modi Government is to fix the crisis in the rural sector (with the agricultural component being the most essential). The BJP may have won the Gujarat election but that came with a wake-up call from the rural voters. The India-Bharat divide was evident, with urban Gujarat voting solidly for the BJP and the rural regions shifting away &mdash; even if not very decisively for now &mdash; from the ruling party. The obvious cause was the perception that the BJP had failed to address rural distress. In the recent interview, Prime Minister Modi acknowledged the problem of rural distress and stressed on the need to tackle it.

&nbsp;

Three major States with an overwhelming rural population &mdash; Karnataka, Rajasthan and Madhya Pradesh &mdash; vote for new Assemblies later this year. The last two are ruled by the BJP and there has been unrest among the farmers over a variety of issues. The Congress has naturally been quick to cash in on the discontent and is busy burnishing its image as a farmer-friendly party. The last time the Congress had sought to pin down the Modi regime on the India-Bharat narrative was two years ago, when Rahul Gandhi had floated the &ldquo;suit boot ki sarkar&rdquo; jibe at the Government. In response, the Government presented its &lsquo;credentials&rsquo; of being pro-poor/pro-farmer in the Union Budget for 2016-17. The Prime Minister himself went to town, calling it &ldquo;pro-village, pro-poor, pro-farmer&rdquo;. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) schemes was rewarded with a higher outlay, and the Pradhan mantra Krishi Yojana was announced. Will we see the revival of a similar spirit in the coming Budget?

&nbsp;

Admittedly, the task of setting right the agrarian/rural crisis is enormous, and the Government has additionally raised the bar of performance. It promised to double farmer income in five years. That and other assurances are what it will have to keep, besides offering tangible solutions, for the rural voters in the States going to polls soon. The distress, in short, has arisen from two factors. The first is that the remuneration the farmers get for their produce from Government agencies does not even on occasions cover the input cost. The second, often related to the first, is that farmers have fallen in a cycle of debt from which they are finding it exceedingly difficult to extricate themselves. Farmer suicides have only worsened an already bad situation. Then there is the difficulty of selling their produce in the markets at acceptable prices. Placating the rural voter has never been an easy task.&nbsp;

&nbsp;

Today, according to provisional estimates of the Central Statistics Office, agriculture accounts for less than 20 per cent of the nation&rsquo;s economy &mdash; the services sector has 54 per cent while industry is close to 29 per cent. This despite the fact that 44 per cent of the country&rsquo;s workforce is employed in agriculture (according to the World Bank and International Labour Organisation).

&nbsp;

The 2018-19 Union Budget is the last big chance for the Government to tweak its priorities so as to be seen as being pro-rural. Chandrababu Naidu had once lost Andhra Pradesh despite being hailed the world over for his administrative skills; the rural voter was turned off by the glitz and glamour which seemed so alien to his living conditions. In 2004, the BJP&rsquo;s Indian Shining campaign failed to give the party a second consecutive chance to rule &mdash; again because rural India refused to endorse the optimism. Union Minister for Finance Arun Jaitley has a good memory. Let&rsquo;s see if the lessons of the recent months and of the past years get reflected in the coming Budget.

&nbsp;

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)&nbsp;&nbsp;

&nbsp;&nbsp; &nbsp;

The 2018-19 Union Budget is the last big chance for the Government to tweak its priorities so as to be seen as being pro-rural.

Even ordinarily, every Union Budget is important. But the Budget for 2018-19 has an added significance for a number of reasons, which is why February 1 is being so keenly anticipated. External factors, as certainly as internal economic dynamics, have always influenced Budget proposals. This time will be no different, except that those external factors, given the way they have got arranged, should have a greater political import than would normally have been the case. Many people had hoped to get a teaser on the Budget in Prime Minister Narendra Modi’s first interview of this year, given to Zee News recently. But he did not oblige, merely reiterating that the forthcoming Budget would proceed in the direction of reforms that his Government had initiated and carried forward since May 2014. In a subsequent interview to another television channel, the Prime Minister was no more forthcoming — he only said that people were not enamoured of sops; they preferred to be gainfully empowered. The Union Budget 2018-19 will be interesting for the following reasons. It will be the first national Budget since the implementation of the Goods and Services Tax (GST) regime and the disruption in the economy that resulted as a consequence. It will also be the last full Budget before the Lok Sabha election in mid-2019. It comes soon after the Gujarat Assembly election result, which offers many lessons to the ruling Bharatiya Janata Party at the Centre. And, it shall be presented months before a spate of Assembly elections that are scheduled in the major States, the outcome of which could depend, inter alia, on what the Budget offers. The Union Budget for 2018-19 will also, incidentally, be placed just days after Prime Minister Modi returns from the World Economic Forum meeting in Davos, where the Indian business story gets hard-sold to an international audience. This cocktail of circumstances makes the coming Budget special. There is speculation on what the Budget does to counter the disruption in economic growth consequent to GST — and, earlier, demonetisation. It is true that the BJP has through its recent electoral wins demonstrated that the people have by and large endorsed the twin measures. But economic management is a different kettle of fish. While international agencies, such as the World Bank have hailed GST and demonetisation, they have also pointed to the immediate after-effects that need fixing. GDP growth is expected to be about seven per cent, down from 8.6 per cent in 2015. The best case scenario projects growth to touch 7.3 per cent by this year-end. Sustained growth is essential to both the reduction of poverty and enhancement of employment opportunities. The contraction in manufacturing and to an extent the services sector is seen as a fallout of the GST. Given that the most affected have been businessmen and small traders — both being strong vote-banks of the BJP — the Budget is expected to address the concerns. How this would be done, remains in the speculative realm. There is also talk that the Government may bite the bullet by drastically overhauling the personal income tax system to provide a big relief to the salaried middle class, yet another important constituent of the ruling party. Post Davos, international investors will watch carefully the Budget proposals to see whether further concrete steps are taken to enhance the ease of doing business. Now that India has moved several places high to be among the 100 top nations in the ‘ease of doing business’ ranking of the World Bank, expectations are higher. It’s true that the Government has abolished dozens of archaic laws that impeded business growth, relaxed foreign direct investment (FDI) norms in various sectors, and established a rule-based transparent mechanism in dealings. But investors will would want to know if the Government is willing to put its own money where its mouth is — that is, show the way to the private sector through massive public investments without compromising on its fiscal deficit target. But the real challenge before the Modi Government is to fix the crisis in the rural sector (with the agricultural component being the most essential). The BJP may have won the Gujarat election but that came with a wake-up call from the rural voters. The India-Bharat divide was evident, with urban Gujarat voting solidly for the BJP and the rural regions shifting away — even if not very decisively for now — from the ruling party. The obvious cause was the perception that the BJP had failed to address rural distress. In the recent interview, Prime Minister Modi acknowledged the problem of rural distress and stressed on the need to tackle it. Three major States with an overwhelming rural population — Karnataka, Rajasthan and Madhya Pradesh — vote for new Assemblies later this year. The last two are ruled by the BJP and there has been unrest among the farmers over a variety of issues. The Congress has naturally been quick to cash in on the discontent and is busy burnishing its image as a farmer-friendly party. The last time the Congress had sought to pin down the Modi regime on the India-Bharat narrative was two years ago, when Rahul Gandhi had floated the “suit boot ki sarkar” jibe at the Government. In response, the Government presented its ‘credentials’ of being pro-poor/pro-farmer in the Union Budget for 2016-17. The Prime Minister himself went to town, calling it “pro-village, pro-poor, pro-farmer”. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) schemes was rewarded with a higher outlay, and the Pradhan mantra Krishi Yojana was announced. Will we see the revival of a similar spirit in the coming Budget? Admittedly, the task of setting right the agrarian/rural crisis is enormous, and the Government has additionally raised the bar of performance. It promised to double farmer income in five years. That and other assurances are what it will have to keep, besides offering tangible solutions, for the rural voters in the States going to polls soon. The distress, in short, has arisen from two factors. The first is that the remuneration the farmers get for their produce from Government agencies does not even on occasions cover the input cost. The second, often related to the first, is that farmers have fallen in a cycle of debt from which they are finding it exceedingly difficult to extricate themselves. Farmer suicides have only worsened an already bad situation. Then there is the difficulty of selling their produce in the markets at acceptable prices. Placating the rural voter has never been an easy task. Today, according to provisional estimates of the Central Statistics Office, agriculture accounts for less than 20 per cent of the nation’s economy — the services sector has 54 per cent while industry is close to 29 per cent. This despite the fact that 44 per cent of the country’s workforce is employed in agriculture (according to the World Bank and International Labour Organisation). The 2018-19 Union Budget is the last big chance for the Government to tweak its priorities so as to be seen as being pro-rural. Chandrababu Naidu had once lost Andhra Pradesh despite being hailed the world over for his administrative skills; the rural voter was turned off by the glitz and glamour which seemed so alien to his living conditions. In 2004, the BJP’s Indian Shining campaign failed to give the party a second consecutive chance to rule — again because rural India refused to endorse the optimism. Union Minister for Finance Arun Jaitley has a good memory. Let’s see if the lessons of the recent months and of the past years get reflected in the coming Budget. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Opinion: BJP should focus on winning rural India in Budget 2018

<a href="http://www.wionews.com/india-news/padmaavat-releases-today-but-faces-blackout-in-four-states-protests-continue-30690">Padmaavat</a><a href="http://www.wionews.com/india-news/padmaavat-releases-today-but-faces-blackout-in-four-states-protests-continue-30690"> releases today; protests continue, Lucknow man tries to immolate himself</a>

As Sanjay Leela Bhansali&#39;s Padmaavat finally gets a release, chaos hammers the country. Protestors took to the streets and caused a ruckus in various parts of the country.

<a href="http://www.wionews.com/india-news/gst-will-have-very-positive-long-term-effects-raghuram-rajan-30699">GST will have &#39;very positive&#39; long-term effects: Raghuram Rajan</a>

In a recent television interview, Former RBI governor Raghuram Rajan spoke about the long-term advantages of the two major economic moves of the Modi government -- the Goods and Service Tax and demonetisation.&nbsp;

<a href="http://www.wionews.com/india-news/no-cause-big-enough-to-justify-violence-against-children-says-rahul-after-attack-on-gurgaon-school-bus-30698">No &#39;cause big enough to justify violence against children&#39;, says Rahul after attack on Gurgaon school bus</a>

On the day miscreants protesting the release of &#39;Padmaavat&#39; targeted a school bus in Gurugram, Rahul Gandhi took to Twitter to express his anguish and blamed the Prime Minister Narendra Modi and the BJP for the ongoing violence. &nbsp;&nbsp;

<a href="http://www.wionews.com/india-news/padmaavat-row-after-attack-on-school-bus-big-gurgaon-schools-shut-till-sunday-30696">Padmaavat</a><a href="http://www.wionews.com/india-news/padmaavat-row-after-attack-on-school-bus-big-gurgaon-schools-shut-till-sunday-30696"> release: After attack on school bus, big Gurgaon schools shut till Sunday</a>

After the attack on a school bus by anti-&quot;Padmaavat&quot; protestors, some reputed schools in Gurgaon have decided to remain shut till Sunday in view of the violence over the controversial film&#39;s release.

<a href="http://www.wionews.com/world/ex-usa-gymnastics-doctor-gets-up-to-175-years-as-abuse-victims-applaud-30692">&#39;I&#39;ve signed your death warrant,&#39; judge tells ex-USA Gymnastics doctor</a>

As his victims wept in a Michigan courtroom on Wednesday, disgraced long-time USA Gymnastics team doctor Larry Nassar was sentenced to up to 175 years in prison for abusing young female gymnasts who were entrusted to his care.

As Sanjay Leela Bhansali's Padmaavat finally gets a release, chaos hammers the country. Protestors took to the streets and caused a ruckus in various parts of the country.

Padmaavat releases today; protests continue, Lucknow man tries to immolate himself As Sanjay Leela Bhansali's Padmaavat finally gets a release, chaos hammers the country. Protestors took to the streets and caused a ruckus in various parts of the country. GST will have 'very positive' long-term effects: Raghuram Rajan In a recent television interview, Former RBI governor Raghuram Rajan spoke about the long-term advantages of the two major economic moves of the Modi government -- the Goods and Service Tax and demonetisation. No 'cause big enough to justify violence against children', says Rahul after attack on Gurgaon school bus On the day miscreants protesting the release of 'Padmaavat' targeted a school bus in Gurugram, Rahul Gandhi took to Twitter to express his anguish and blamed the Prime Minister Narendra Modi and the BJP for the ongoing violence. Padmaavat release: After attack on school bus, big Gurgaon schools shut till Sunday After the attack on a school bus by anti-"Padmaavat" protestors, some reputed schools in Gurgaon have decided to remain shut till Sunday in view of the violence over the controversial film's release. 'I've signed your death warrant,' judge tells ex-USA Gymnastics doctor As his victims wept in a Michigan courtroom on Wednesday, disgraced long-time USA Gymnastics team doctor Larry Nassar was sentenced to up to 175 years in prison for abusing young female gymnasts who were entrusted to his care.

Wion Morning News Brief, January 25, 2018

Altogether Fake Indian Currency Notes (FICN) of face value 21.54 crore was seized by security agencies after demonetisation of Rs 1,000 and Rs 500 notes, the Lok Sabha was informed on Tuesday.

Union minister of state for home Hansraj Ahir said the seized FICN include new Rs 2,000, Rs 500, Rs 200 notes and Rs 100 notes.

Replying to a written question, Ahir said 39,604 fake notes of Rs 2,000 denomination and 74,155 fake notes of Rs 500 denomination were seized by security forces between November 9, 2016 and December 31, 2017.

He said the ministries of home and finance, Reserve Bank of India, security and intelligence agencies of the Centre and states are working in coordination to prevent the illegal activities related to FICN.

&quot;Information received from security and intelligence agencies indicates that Pakistan has been involved in manufacturing and smuggling of FICN into India.

&quot;However, as per the available information, no instance of seizure of Pakistan printed high quality fake Indian currency notes has come to notice post demonetisation,&quot; he said.

Prime Minister Narendra Modi had announced the demonetisation of Rs 1,000 and Rs 500 notes on November 8, 2016.

Union minister of state for home Hansraj Ahir said the seized FICN include new Rs 2,000, Rs 500, Rs 200 notes and Rs 100 notes

Altogether Fake Indian Currency Notes (FICN) of face value 21.54 crore was seized by security agencies after demonetisation of Rs 1,000 and Rs 500 notes, the Lok Sabha was informed on Tuesday. Union minister of state for home Hansraj Ahir said the seized FICN include new Rs 2,000, Rs 500, Rs 200 notes and Rs 100 notes. Replying to a written question, Ahir said 39,604 fake notes of Rs 2,000 denomination and 74,155 fake notes of Rs 500 denomination were seized by security forces between November 9, 2016 and December 31, 2017. He said the ministries of home and finance, Reserve Bank of India, security and intelligence agencies of the Centre and states are working in coordination to prevent the illegal activities related to FICN. "Information received from security and intelligence agencies indicates that Pakistan has been involved in manufacturing and smuggling of FICN into India. "However, as per the available information, no instance of seizure of Pakistan printed high quality fake Indian currency notes has come to notice post demonetisation," he said. Prime Minister Narendra Modi had announced the demonetisation of Rs 1,000 and Rs 500 notes on November 8, 2016.

Rs 21.54 cr in fake notes seized post demonetisation: Government

The Income Tax (IT) department has issued nearly two lakh notices to people who deposited unaccounted sum of Rs.15 lakh or more in their accounts during the demonetisation period in November 2016.

&quot;More than Rs. 15 lakh were deposited in accounts of certain individuals, for which no returns were filed. We have identified around 1.98 lakh such accounts and sent notices to the account holders in the months of December and January. However, we have not received any response on the same. It is to be noted that failing to reply to these notices can lead to penalising by the IT department,&quot; Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra told ANI.

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Notices sent to those who deposited more than Rs 15 lakh in banks during demonetisation but didn&#39;t file return.Sent around 1,98,000 notices during Dec- Jan.Pursuing that everybody should file return who deposited more than Rs 15 lakh during demonetisation: S Chandra Chairman CBDT <a href="https://t.co/w2WkA0UKTY">pic.twitter.com/w2WkA0UKTY</a>
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/959721793127927808?ref_src=twsrc%5Etfw">February 3, 2018</a></blockquote>
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Chandra further stated that around 3,000 prosecution cases were filed in the last three months across different areas, including tax evasion, delayed tax filing, abetment, and so on.

In a bid to encourage digitisation, the IT department, Chandra said, is focusing on e-assessment.

&quot;This year, we introduced e-assessment on a trial basis. Nearly 60,000 e-assessments were done in three months. We expect this number to increase in the coming months,&quot; he said.

On a related note, the e-assessment process, which was introduced recently, allows online tax filing and assessment, thereby reducing the need for taxpayers to visit the income tax office for the same.&nbsp;

The Income Tax (IT) department has issued nearly two lakh notices to people who deposited unaccounted sum of Rs.15 lakh or more in their accounts during the demonetisation period in November 2016

The Income Tax (IT) department has issued nearly two lakh notices to people who deposited unaccounted sum of Rs.15 lakh or more in their accounts during the demonetisation period in November 2016. "More than Rs. 15 lakh were deposited in accounts of certain individuals, for which no returns were filed. We have identified around 1.98 lakh such accounts and sent notices to the account holders in the months of December and January. However, we have not received any response on the same. It is to be noted that failing to reply to these notices can lead to penalising by the IT department," Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra told ANI. Notices sent to those who deposited more than Rs 15 lakh in banks during demonetisation but didn't file return.Sent around 1,98,000 notices during Dec- Jan.Pursuing that everybody should file return who deposited more than Rs 15 lakh during demonetisation: S Chandra Chairman CBDT pic.twitter.com/w2WkA0UKTY — ANI (@ANI) February 3, 2018 × Chandra further stated that around 3,000 prosecution cases were filed in the last three months across different areas, including tax evasion, delayed tax filing, abetment, and so on. In a bid to encourage digitisation, the IT department, Chandra said, is focusing on e-assessment. "This year, we introduced e-assessment on a trial basis. Nearly 60,000 e-assessments were done in three months. We expect this number to increase in the coming months," he said. On a related note, the e-assessment process, which was introduced recently, allows online tax filing and assessment, thereby reducing the need for taxpayers to visit the income tax office for the same.

Deposited Rs.15 lakh during demonetisation? You could be in trouble

As the day finally arrives for the Finance Minister to present the Union Budget, the Goods and Services Tax (GST) has emerged as the main concern among retailers, who expect a relaxation in the tax slabs across various product categories.

ANI asked the retailers of Hyderabad about their expectations from the budget, and the majority ascribed the dip in their business to GST and hoped the latest budget would provide some relief.

&quot;There is only one thing we want the government to change in budget revision, and that is to reduce the GST percentage on footwear which is 18 percent now,&quot; the footwear retailers said.

They also demanded that the filing of taxation be made easy.

The stationery owners said the 12 percent GST has tremendously affected business, and indicated that a further increase would incur them heavy losses.

The pan shop retailers have also faced a setback from GST and said the latest budget revision should remove the GST on pan and tobacco products.Textile retailers told ANI that the costs have increased despite the five percent GST on textile as an extra tax is charged on manufacturing as well which adds to the total cost and thereby the retail rates.&quot;We have to put that charges even for customers which results in more cost and the public will not be able to purchase, and ultimately it will affect our business.

So it would be better if there will be some changes in the percentage of GST on textile,&quot; told one seller.For toy products, the public is not ready to pay the GST, as VAT is already applicable on them, the toy shop retailer said.

&quot;For that we either have to increase the toys rates for profit or not charge GST as the customers will not buy if it is applicable,&quot; one of the retailers said.

The hardware retailers are also expecting a tax cut, as they said the business has been running low because of the GST.

Most of the gold jewellery retailers said they prefer old tax of one percent on ornaments instead of three percent, &quot;We are expecting this revision as well as a tax reduction on the transportation.

&quot;Handloom traders also expect no tax, saying it takes a lot of hard work.Meanwhile, business in sweet shops have been normal, with five percent GST on the sweet products, and the sellers hoped there is no increase in the upcoming budget revision.

The Goods and Services Tax has emerged as the main concern among small businessmen

As the day finally arrives for the Finance Minister to present the Union Budget, the Goods and Services Tax (GST) has emerged as the main concern among retailers, who expect a relaxation in the tax slabs across various product categories. ANI asked the retailers of Hyderabad about their expectations from the budget, and the majority ascribed the dip in their business to GST and hoped the latest budget would provide some relief. "There is only one thing we want the government to change in budget revision, and that is to reduce the GST percentage on footwear which is 18 percent now," the footwear retailers said. They also demanded that the filing of taxation be made easy. The stationery owners said the 12 percent GST has tremendously affected business, and indicated that a further increase would incur them heavy losses. The pan shop retailers have also faced a setback from GST and said the latest budget revision should remove the GST on pan and tobacco products.Textile retailers told ANI that the costs have increased despite the five percent GST on textile as an extra tax is charged on manufacturing as well which adds to the total cost and thereby the retail rates."We have to put that charges even for customers which results in more cost and the public will not be able to purchase, and ultimately it will affect our business. So it would be better if there will be some changes in the percentage of GST on textile," told one seller.For toy products, the public is not ready to pay the GST, as VAT is already applicable on them, the toy shop retailer said. "For that we either have to increase the toys rates for profit or not charge GST as the customers will not buy if it is applicable," one of the retailers said. The hardware retailers are also expecting a tax cut, as they said the business has been running low because of the GST. Most of the gold jewellery retailers said they prefer old tax of one percent on ornaments instead of three percent, "We are expecting this revision as well as a tax reduction on the transportation. "Handloom traders also expect no tax, saying it takes a lot of hard work.Meanwhile, business in sweet shops have been normal, with five percent GST on the sweet products, and the sellers hoped there is no increase in the upcoming budget revision.

Union Budget 2018: GST revision concerns retailers

The Union budget to be presented by the Finance Minister on 1st February is crucial for at least three reasons. Firstly, the budget comes at a time when the growth rate of the economy is projected to be at 6.5% for the current financial year, the lowest since the Modi government assumed office. Secondly, the budget comes in the backdrop of a major economic policy change of introducing Goods and Services Tax (GST) that the government initiated last year. Thirdly, this is perhaps the last full budget that the government will be placing before the Lok Sabha elections, due in 2019. Let us look at these issues seriatim.&nbsp;

&nbsp;

The growth rate of Gross Value Added (GVA) is projected to be 6.1% in 2017-18, as against 6.6% in 2016-17 and 7.9% in 2015-16. This growth slowdown is a manifestation of the fact that investment is simply not picking up in the economy. As a share of GDP, the investment declined from 31.3% in 2013-14 to 29% in 2017-18 (projected). The Centre for Monitoring the Indian Economy (CMIE) has reported that new project announcements by the Indian corporate sector reached a 13 year low in December 2017.&nbsp;

&nbsp;

The investment and growth slowdown in the country is a result of a complex set of factors. Firstly, it is now clear, even to die-hard supporters of the government, that the policy of demonetisation had a very serious adverse impact on the economy, particularly the informal sector, while unearthing precious little worth of black money. The uncertainty created because of this hard-headed measure and the concomitant contraction of economic activity has resulted in an economic slowdown in the country.

&nbsp;

Secondly, the problem of corporate debt overhang in the economy and the resulting bad loans in the banking sector are primarily responsible for the investment slowdown. The Reserve Bank of India reports that gross non-performing advances ratio increased from 9.6% to 10.2% between March and September 2017. Burdened with these NPAs, the credit growth rate of the banks is much below what it was a few years back. The government has not been able to solve the problem of NPAs in the Indian banking sector.&nbsp;

&nbsp;

In fact, when Mr. Jaitley became the Finance Minister, the gross non-performing assets of the scheduled commercial banks was around Rs. 2.6 trillion. This had reached around Rs. 8 trillion by March 2017, even after the government writing off a significant amount of the NPAs. Rather than take stringent action against the defaulters and recover the money, the government has brought a new Financial Resolution and Deposit Insurance (FRDI) bill, with the clause of bail-in which can jeopardise the stability of the public banking sector in India. This twin problem of NPAs and investment slowdown has to be tackled by the government.&nbsp;

&nbsp;

One of the ways in which the government can deal with the problem of the investment slowdown is to step up public investment. However, as a result of its adherence to the FRBM Act, the government is committed to maintaining a fiscal deficit which is 3.2% of GDP for the current fiscal. But as per the Controller General of Accounts data, the fiscal deficit has overshot the target (112% of the target set last year) by the end of November 2017. During the same period, last year, the fiscal deficit was 85% of the target in November 2016.&nbsp; Additionally, if the GDP projection does not meet target (which is possible given a downward revision of GDP growth projection), then clearly the fiscal deficit ratio is going to increase. The government, therefore, will have to cut back on expenditures in the remaining months of the fiscal to try and remain within the fiscal deficit target.

&nbsp;

This problem is basically a result of the inability of the government to meet revenue targets. It has been reported that tax collections under GST have been declining since its inception. In July, Rs 92283 crore was collected which declined to Rs 80808 crore in November 2017. Moreover, data shows that non-tax revenue has suffered a hit this fiscal. This is because the dividend from RBI has decreased by Rs 30000 crore and spectrum sales target have not been met. The shortfall in the RBI dividend, by the way, is a direct result of the policy of demonetisation. With the huge deposits in the banks, the interest paid to customers as well as banks to hold the deposit, plus the costs of new note printing drastically reduced the profitability of RBI, which resulted in a decline in its dividend paid to the government.

&nbsp;

This stressed fiscal situation is further aggravated by another crucial development. When Modi assumed office in 2014, the price of a barrel of crude oil in the international market was more than $100 which subsequently halved its value. Taking advantage of this low oil price, the government increased the excise duty on petroleum products, such that while crude oil prices declined, retail prices did not. Through this imposition of excise duties, the government collected 1.8% of GDP as revenue. The total excise duty collection from the oil sector doubled. Now, however, crude oil prices are rising up. As a result, retail prices of petrol and diesel are also increasing. For example, within 6 months, the price of petrol in Kolkata increased by more than Rs 6/litre. Rising oil prices have cascading effects on inflation, and they are politically sensitive. Therefore, the government is faced with a situation where they may have to reduce excise duty on oil, like they did in October last year. This will only aggravate government&rsquo;s revenue mobilisation problem.

&nbsp;

There has been a lot of discussion in the media regarding the rural and agriculture sector with speculation that the government would be announcing some relief for this sector. It is true that agriculture sector is in crisis. The political manifestations of this have been in terms of farmers&rsquo; agitations in Maharastra, Madhya Pradesh, Rajasthan and other states. Even in Gujarat, the BJP&rsquo;s support base was dented in the rural areas. The root cause of this crisis is non-remunerative prices for agricultural products, the problem of agricultural loans and government&rsquo;s refusal to write off farmers&rsquo; debts.&nbsp;

&nbsp;

The government also had promised to double the income of the farmers. Far from doubling, what has happened is that the agricultural growth rate has slowed down in the country. In such a situation and given the election year, the buzz around rural sector spending increasing is natural. However, the macroeconomics of the budget with shortfalls in revenue generation will tie up the government&rsquo;s hands. Either the government has to impose a new set of taxes to generate resources to be spent in the rural areas. Or else, the expenditure will be nominally increased in rural areas, at the cost of expenditures in other sectors.&nbsp;

&nbsp;

The other major challenge of the government is job creation. While the PM has now turned around from digital economy towards designating pakoda making as gainful employment, the fact of the matter is that there is a slowdown in the job-generating capacity of the economy. The annual survey of Labour Bureau shows the real picture where there has been a decline in employment between 2013-14 and 2015-16. What the government will do in terms of providing jobs to the youth remain to be seen.

&nbsp;

What is, however, binding the government to raise resources in a progressive manner and go for large-scale fiscal stimulus is not economics but its own politics and a warped notion of economic policy. In a situation where there are growth and investment slow down, agrarian crisis, growing joblessness, undergraduate economics teaches us that a fiscal stimulus will surely help in improving the situation. This stimulus can be funded by simply taxing the rich and super-rich in the country.&nbsp;

&nbsp;

It has been reported by Oxfam that the top 1% of India&rsquo;s population amassed 73% of the total wealth created in the country last year. The super-rich in our country are truly having ache din. If these wealth earners are taxed, such expansionary policies can be undertaken. The tax-GDP ratio in India is one of the lowest in the world.&nbsp; This is so at a time when India is having a record number of dollar billionaires. It is however unlikely that a government which goes ecstatic with an improvement in ranking in the faulty &lsquo;ease of doing business&rsquo; will try to impose burdens on the rich for spending on aam admi.

&nbsp;

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)&nbsp;&nbsp;

It has been reported by Oxfam that the top 1% of India’s population amassed 73% of the total wealth created in the country last year.

The Union budget to be presented by the Finance Minister on 1st February is crucial for at least three reasons. Firstly, the budget comes at a time when the growth rate of the economy is projected to be at 6.5% for the current financial year, the lowest since the Modi government assumed office. Secondly, the budget comes in the backdrop of a major economic policy change of introducing Goods and Services Tax (GST) that the government initiated last year. Thirdly, this is perhaps the last full budget that the government will be placing before the Lok Sabha elections, due in 2019. Let us look at these issues seriatim. The growth rate of Gross Value Added (GVA) is projected to be 6.1% in 2017-18, as against 6.6% in 2016-17 and 7.9% in 2015-16. This growth slowdown is a manifestation of the fact that investment is simply not picking up in the economy. As a share of GDP, the investment declined from 31.3% in 2013-14 to 29% in 2017-18 (projected). The Centre for Monitoring the Indian Economy (CMIE) has reported that new project announcements by the Indian corporate sector reached a 13 year low in December 2017. The investment and growth slowdown in the country is a result of a complex set of factors. Firstly, it is now clear, even to die-hard supporters of the government, that the policy of demonetisation had a very serious adverse impact on the economy, particularly the informal sector, while unearthing precious little worth of black money. The uncertainty created because of this hard-headed measure and the concomitant contraction of economic activity has resulted in an economic slowdown in the country. Secondly, the problem of corporate debt overhang in the economy and the resulting bad loans in the banking sector are primarily responsible for the investment slowdown. The Reserve Bank of India reports that gross non-performing advances ratio increased from 9.6% to 10.2% between March and September 2017. Burdened with these NPAs, the credit growth rate of the banks is much below what it was a few years back. The government has not been able to solve the problem of NPAs in the Indian banking sector. In fact, when Mr. Jaitley became the Finance Minister, the gross non-performing assets of the scheduled commercial banks was around Rs. 2.6 trillion. This had reached around Rs. 8 trillion by March 2017, even after the government writing off a significant amount of the NPAs. Rather than take stringent action against the defaulters and recover the money, the government has brought a new Financial Resolution and Deposit Insurance (FRDI) bill, with the clause of bail-in which can jeopardise the stability of the public banking sector in India. This twin problem of NPAs and investment slowdown has to be tackled by the government. One of the ways in which the government can deal with the problem of the investment slowdown is to step up public investment. However, as a result of its adherence to the FRBM Act, the government is committed to maintaining a fiscal deficit which is 3.2% of GDP for the current fiscal. But as per the Controller General of Accounts data, the fiscal deficit has overshot the target (112% of the target set last year) by the end of November 2017. During the same period, last year, the fiscal deficit was 85% of the target in November 2016. Additionally, if the GDP projection does not meet target (which is possible given a downward revision of GDP growth projection), then clearly the fiscal deficit ratio is going to increase. The government, therefore, will have to cut back on expenditures in the remaining months of the fiscal to try and remain within the fiscal deficit target. This problem is basically a result of the inability of the government to meet revenue targets. It has been reported that tax collections under GST have been declining since its inception. In July, Rs 92283 crore was collected which declined to Rs 80808 crore in November 2017. Moreover, data shows that non-tax revenue has suffered a hit this fiscal. This is because the dividend from RBI has decreased by Rs 30000 crore and spectrum sales target have not been met. The shortfall in the RBI dividend, by the way, is a direct result of the policy of demonetisation. With the huge deposits in the banks, the interest paid to customers as well as banks to hold the deposit, plus the costs of new note printing drastically reduced the profitability of RBI, which resulted in a decline in its dividend paid to the government. This stressed fiscal situation is further aggravated by another crucial development. When Modi assumed office in 2014, the price of a barrel of crude oil in the international market was more than $100 which subsequently halved its value. Taking advantage of this low oil price, the government increased the excise duty on petroleum products, such that while crude oil prices declined, retail prices did not. Through this imposition of excise duties, the government collected 1.8% of GDP as revenue. The total excise duty collection from the oil sector doubled. Now, however, crude oil prices are rising up. As a result, retail prices of petrol and diesel are also increasing. For example, within 6 months, the price of petrol in Kolkata increased by more than Rs 6/litre. Rising oil prices have cascading effects on inflation, and they are politically sensitive. Therefore, the government is faced with a situation where they may have to reduce excise duty on oil, like they did in October last year. This will only aggravate government’s revenue mobilisation problem. There has been a lot of discussion in the media regarding the rural and agriculture sector with speculation that the government would be announcing some relief for this sector. It is true that agriculture sector is in crisis. The political manifestations of this have been in terms of farmers’ agitations in Maharastra, Madhya Pradesh, Rajasthan and other states. Even in Gujarat, the BJP’s support base was dented in the rural areas. The root cause of this crisis is non-remunerative prices for agricultural products, the problem of agricultural loans and government’s refusal to write off farmers’ debts. The government also had promised to double the income of the farmers. Far from doubling, what has happened is that the agricultural growth rate has slowed down in the country. In such a situation and given the election year, the buzz around rural sector spending increasing is natural. However, the macroeconomics of the budget with shortfalls in revenue generation will tie up the government’s hands. Either the government has to impose a new set of taxes to generate resources to be spent in the rural areas. Or else, the expenditure will be nominally increased in rural areas, at the cost of expenditures in other sectors. The other major challenge of the government is job creation. While the PM has now turned around from digital economy towards designating pakoda making as gainful employment, the fact of the matter is that there is a slowdown in the job-generating capacity of the economy. The annual survey of Labour Bureau shows the real picture where there has been a decline in employment between 2013-14 and 2015-16. What the government will do in terms of providing jobs to the youth remain to be seen. What is, however, binding the government to raise resources in a progressive manner and go for large-scale fiscal stimulus is not economics but its own politics and a warped notion of economic policy. In a situation where there are growth and investment slow down, agrarian crisis, growing joblessness, undergraduate economics teaches us that a fiscal stimulus will surely help in improving the situation. This stimulus can be funded by simply taxing the rich and super-rich in the country. It has been reported by Oxfam that the top 1% of India’s population amassed 73% of the total wealth created in the country last year. The super-rich in our country are truly having ache din. If these wealth earners are taxed, such expansionary policies can be undertaken. The tax-GDP ratio in India is one of the lowest in the world. This is so at a time when India is having a record number of dollar billionaires. It is however unlikely that a government which goes ecstatic with an improvement in ranking in the faulty ‘ease of doing business’ will try to impose burdens on the rich for spending on aam admi. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Opinion: Taxing the super rich is how we can revive Indian economy

The demonetisation of high-value currency notes in November 2016 resulted in a widening of taxpayers&#39; base and rise in household savings, said the Economic Survey 2017-18 tabled in Parliament today.

The pre-budget survey further said policy priorities over the short term focused on reviving investments by mobilising savings and encouraging the conversion of gold into financial savings.

&quot;The share of financial saving is already rising in aggregate household saving - with a clear shift visible towards market instruments&nbsp;a phenomenon that has been helped by demonetisation,&quot; said the document authored by a team led by Chief Economic Advisor Arvind Subramanian.

Taking into account the pre-existing trend growth in new tax filers through regression analysis, the survey carried out a rigorous assessment of the impact of demonetisation.

&quot;Taking seasonality into account it is found that there is a 0.8 per cent monthly trend increase in new tax filers (annual growth of nearly 10 per cent). The level of tax filers by November 2017 was 31 per cent greater than what this trend would suggest, a statistically significant difference,&quot; said the Economic Survey 2017-18 released by the government today.

&quot;This translates roughly into about 18 lakh (1.8 million) additional taxpayers due to demonetisation-cum-GST, representing 3 per cent of existing taxpayers,&quot; it said.

Prime Minister Narendra Modi through a television address to the nation on November 8, 2016 had announced scrapping of the high value Rs 500 and Rs 1,000 banknotes to counter the menace of black money and terror funding.

As per the Economic Survey analysis, new filers reported an average income, in many cases, close to the income tax threshold of Rs 2.5 lakh, limiting the early revenue impact.

&quot;As income growth over time pushes many of the new tax filers over the threshold, the revenue dividends should increase robustly,&quot; it added.

Besides, the survey said one of the main aims of demonetisation and the Goods and Services Tax (GST) was to increase the formalisation of the economy and bring more Indians into the income tax net, which includes only about 5.93 crore individual taxpayers (filers and those whose tax is deducted at source in 2015-16).

It is equivalent to 24.7 per cent of the estimated non- agricultural workforce who pays tax.

After November 2016, 1.01 crore (10.1 million) filers were added compared to an average of 62 lakh (6.2 million) in the preceding six years.

After demonetisation, the Reserve Bank had scaled up its liquidity absorption operations using a mix of both conventional and unconventional instruments.

The pre-budget survey further said policy priorities over the short term focused on reviving investments by mobilising savings and encouraging the conversion of gold into financial savings

The demonetisation of high-value currency notes in November 2016 resulted in a widening of taxpayers' base and rise in household savings, said the Economic Survey 2017-18 tabled in Parliament today. The pre-budget survey further said policy priorities over the short term focused on reviving investments by mobilising savings and encouraging the conversion of gold into financial savings. "The share of financial saving is already rising in aggregate household saving - with a clear shift visible towards market instruments a phenomenon that has been helped by demonetisation," said the document authored by a team led by Chief Economic Advisor Arvind Subramanian. Taking into account the pre-existing trend growth in new tax filers through regression analysis, the survey carried out a rigorous assessment of the impact of demonetisation. "Taking seasonality into account it is found that there is a 0.8 per cent monthly trend increase in new tax filers (annual growth of nearly 10 per cent). The level of tax filers by November 2017 was 31 per cent greater than what this trend would suggest, a statistically significant difference," said the Economic Survey 2017-18 released by the government today. "This translates roughly into about 18 lakh (1.8 million) additional taxpayers due to demonetisation-cum-GST, representing 3 per cent of existing taxpayers," it said. Prime Minister Narendra Modi through a television address to the nation on November 8, 2016 had announced scrapping of the high value Rs 500 and Rs 1,000 banknotes to counter the menace of black money and terror funding. As per the Economic Survey analysis, new filers reported an average income, in many cases, close to the income tax threshold of Rs 2.5 lakh, limiting the early revenue impact. "As income growth over time pushes many of the new tax filers over the threshold, the revenue dividends should increase robustly," it added. Besides, the survey said one of the main aims of demonetisation and the Goods and Services Tax (GST) was to increase the formalisation of the economy and bring more Indians into the income tax net, which includes only about 5.93 crore individual taxpayers (filers and those whose tax is deducted at source in 2015-16). It is equivalent to 24.7 per cent of the estimated non- agricultural workforce who pays tax. After November 2016, 1.01 crore (10.1 million) filers were added compared to an average of 62 lakh (6.2 million) in the preceding six years. After demonetisation, the Reserve Bank had scaled up its liquidity absorption operations using a mix of both conventional and unconventional instruments.

'Note ban led to wider taxpayers' base,more household savings'

Shortly after Union Finance Minister <a href="http://www.wionews.com/india-news/economic-survey-sees-accelerating-gdp-growth-upswing-in-real-estate-sector-31065">Arun Jaitley tabled the Economy Survey</a> in the Parliament today, Chief Financial Adviser Arvind Subramanian took to Twitter sharing key points of the survey.

This year&#39;s survey was expected to analyze the GST implementation and the demonetisation move in detail.&nbsp;

&quot;GST shows cooperative federalism; &#39;technology&#39;&nbsp;is powerful, must be used for other reforms involving states: agriculture, power, DBT. India went from &#39;crony socialism to stigmatised capitalism&#39;&nbsp;hence recent actions on twin balance sheet noteworthy,&quot; tweeted Subramanian.&nbsp;

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Broader Lessons 
GST shows coopertve federalsm &ldquo;technology&rdquo; is powerful, mst be used fr othr refrms invlvng states: agri, power, DBT 
India went frm &ldquo;crony socialsm to stigmatizd capitalsm&rdquo; hence recnt actns on twin balance sheet noteworthy <a href="https://twitter.com/hashtag/economicsurvey18?src=hash&amp;ref_src=twsrc%5Etfw">#economicsurvey18</a> <a href="https://t.co/VAfz77JvGp">https://t.co/VAfz77JvGp</a>
&mdash; arvind subramanian (@arvindsubraman) <a href="https://twitter.com/arvindsubraman/status/957875615046164480?ref_src=twsrc%5Etfw">January 29, 2018</a></blockquote>
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Subramanian noted capital raising (public and private) to have &quot;increased substantially&quot;.

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GST revenues doing well: 12 percent growth, better buoyancy than previous taxes (Box 7, Ch. 1., Vol. 1) <a href="https://twitter.com/hashtag/economicsurvey18?src=hash&amp;ref_src=twsrc%5Etfw">#economicsurvey18</a> <a href="https://t.co/VAfz77JvGp">https://t.co/VAfz77JvGp</a> <a href="https://t.co/wgROVrWmab">pic.twitter.com/wgROVrWmab</a>
&mdash; arvind subramanian (@arvindsubraman) <a href="https://twitter.com/arvindsubraman/status/957873578476683264?ref_src=twsrc%5Etfw">January 29, 2018</a></blockquote>
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According to Subramanian, some of the key areas and policy agenda for the upcoming fiscal year would include supporting agriculture, GST stabilisation, recapitalisation, privatisation of Air-India and combatting macroeconomic pressures.&nbsp;

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Outlook 
2017-18: Real GDP growth of 6.75%, nominal growth of 10.5% 
2018-19: Real growth of 7%-7.5% <a href="https://twitter.com/hashtag/economicsurvey18?src=hash&amp;ref_src=twsrc%5Etfw">#economicsurvey18</a> <a href="https://t.co/VAfz77JvGp">https://t.co/VAfz77JvGp</a> <a href="https://t.co/wDBgVfFqds">pic.twitter.com/wDBgVfFqds</a>
&mdash; arvind subramanian (@arvindsubraman) <a href="https://twitter.com/arvindsubraman/status/957873340512837632?ref_src=twsrc%5Etfw">January 29, 2018</a></blockquote>
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&quot;GST revenues are doing well: 12 per cent growth, better buoyancy than previous taxes,&quot; noted Subramanian.&nbsp;

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Major achvmnts of past year 1) Implmntng GST, respnding quickly to transitional challnges 2) Tacklng longfestering Twin Balance Sheet challnge by sendng stressd debtors to IBC &amp; bank recap 
Validation: first sovereign upgrade in 14 years<a href="https://twitter.com/hashtag/economicsurvey18?src=hash&amp;ref_src=twsrc%5Etfw">#economicsurvey18</a> <a href="https://t.co/VAfz77JvGp">https://t.co/VAfz77JvGp</a>
&mdash; arvind subramanian (@arvindsubraman) <a href="https://twitter.com/arvindsubraman/status/957872560250564608?ref_src=twsrc%5Etfw">January 29, 2018</a></blockquote>
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&nbsp;

Subramanian also highlighted some of the major achievements of the past year; implementing GST, responding quickly to transitional challenges, tackling long-festering twin balance sheet challenge featured on top of the list.&nbsp;

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I will be presenting highlights of the <a href="https://twitter.com/hashtag/economicsurvey18?src=hash&amp;ref_src=twsrc%5Etfw">#economicsurvey18</a> at a press conference at the National Media Center at 130 pm today. <a href="https://t.co/lvVcCTQdLi">https://t.co/lvVcCTQdLi</a>
&mdash; arvind subramanian (@arvindsubraman) <a href="https://twitter.com/arvindsubraman/status/957805989897560065?ref_src=twsrc%5Etfw">January 29, 2018</a></blockquote>
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Arvind Subramanian held a press conference a short while ago to share more details about the Economic Survey.&nbsp;

This year's survey was expected to analyse the GST implementation and the demonetisation move in detail.

Shortly after Union Finance Minister Arun Jaitley tabled the Economy Survey in the Parliament today, Chief Financial Adviser Arvind Subramanian took to Twitter sharing key points of the survey. This year's survey was expected to analyze the GST implementation and the demonetisation move in detail. "GST shows cooperative federalism; 'technology' is powerful, must be used for other reforms involving states: agriculture, power, DBT. India went from 'crony socialism to stigmatised capitalism' hence recent actions on twin balance sheet noteworthy," tweeted Subramanian. Broader Lessons GST shows coopertve federalsm “technology” is powerful, mst be used fr othr refrms invlvng states: agri, power, DBT India went frm “crony socialsm to stigmatizd capitalsm” hence recnt actns on twin balance sheet noteworthy #economicsurvey18 https://t.co/VAfz77JvGp — arvind subramanian (@arvindsubraman) January 29, 2018 × Subramanian noted capital raising (public and private) to have "increased substantially". GST revenues doing well: 12 percent growth, better buoyancy than previous taxes (Box 7, Ch. 1., Vol. 1) #economicsurvey18 https://t.co/VAfz77JvGp pic.twitter.com/wgROVrWmab — arvind subramanian (@arvindsubraman) January 29, 2018 × According to Subramanian, some of the key areas and policy agenda for the upcoming fiscal year would include supporting agriculture, GST stabilisation, recapitalisation, privatisation of Air-India and combatting macroeconomic pressures. Outlook 2017-18: Real GDP growth of 6.75%, nominal growth of 10.5% 2018-19: Real growth of 7%-7.5% #economicsurvey18 https://t.co/VAfz77JvGp pic.twitter.com/wDBgVfFqds — arvind subramanian (@arvindsubraman) January 29, 2018 × "GST revenues are doing well: 12 per cent growth, better buoyancy than previous taxes," noted Subramanian. Major achvmnts of past year 1) Implmntng GST, respnding quickly to transitional challnges 2) Tacklng longfestering Twin Balance Sheet challnge by sendng stressd debtors to IBC & bank recap Validation: first sovereign upgrade in 14 years#economicsurvey18 https://t.co/VAfz77JvGp — arvind subramanian (@arvindsubraman) January 29, 2018 × Subramanian also highlighted some of the major achievements of the past year; implementing GST, responding quickly to transitional challenges, tackling long-festering twin balance sheet challenge featured on top of the list. I will be presenting highlights of the #economicsurvey18 at a press conference at the National Media Center at 130 pm today. https://t.co/lvVcCTQdLi — arvind subramanian (@arvindsubraman) January 29, 2018 × Arvind Subramanian held a press conference a short while ago to share more details about the Economic Survey.

Economic Survey 2018: 'GST revenues doing well with 12 per cent growth,' tweets Chief Finance Adviser

The Reserve Bank of India reiterated Wednesday that the Rs 10 coins it has issued of various designs are legal tender.&nbsp;

The RBI has so far issued Rs 10 coins in 14 designs.&nbsp;

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<a href="https://twitter.com/hashtag/FLASH?src=hash&amp;ref_src=twsrc%5Etfw">#FLASH</a> Reserve Bank of India (RBI) reiterates legal tender status of Rupees 10 coins of different designs
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/953551839798030337?ref_src=twsrc%5Etfw">January 17, 2018</a></blockquote>
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&quot;So far, the Reserve Bank has issued Rs 10 coins in 14 designs and public has been informed of their distinctive features. All these coins are legal tender and can be accepted for transactions,&quot; the RBI said.&nbsp;

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So far, the Reserve Bank has issued Rs 10 coins in 14 designs &amp; public has been informed of their distinctive features. All these coins are legal tender and can be accepted for transactions: Reserve Bank of India (RBI)
&mdash; ANI (@ANI) <a href="https://twitter.com/ANI/status/953552659675463680?ref_src=twsrc%5Etfw">January 17, 2018</a></blockquote>
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There had been reports earlier of people refusing to accept the new coins, because of rumours that they were not legal tender.&nbsp;

Shopkeepers, vendors,&nbsp;bus conductors, and even railway counters have reportedly rejected some of the 10-rupee coins saying that only the coins with the rupee symbol on them are legal tender. (As have panhandlers.)&nbsp;

There had also been reports of people going to their banks&nbsp;to exchange the coins in return for notes.&nbsp;

The issue reportedly started with Prime Minister Narendra Modi announcing his demonetisation in November 2016.

The Reserve Bank of India has so far issued 10-rupee coins in 14 different designs

The Reserve Bank of India reiterated Wednesday that the Rs 10 coins it has issued of various designs are legal tender. The RBI has so far issued Rs 10 coins in 14 designs. #FLASH Reserve Bank of India (RBI) reiterates legal tender status of Rupees 10 coins of different designs — ANI (@ANI) January 17, 2018 × "So far, the Reserve Bank has issued Rs 10 coins in 14 designs and public has been informed of their distinctive features. All these coins are legal tender and can be accepted for transactions," the RBI said. So far, the Reserve Bank has issued Rs 10 coins in 14 designs & public has been informed of their distinctive features. All these coins are legal tender and can be accepted for transactions: Reserve Bank of India (RBI) — ANI (@ANI) January 17, 2018 × There had been reports earlier of people refusing to accept the new coins, because of rumours that they were not legal tender. Shopkeepers, vendors, bus conductors, and even railway counters have reportedly rejected some of the 10-rupee coins saying that only the coins with the rupee symbol on them are legal tender. (As have panhandlers.) There had also been reports of people going to their banks to exchange the coins in return for notes. The issue reportedly started with Prime Minister Narendra Modi announcing his demonetisation in November 2016.

All designs of Rs 10 coin are legal tender, RBI reiterates

In&nbsp;a joint raid, the National Investigation Agency (NIA) and Uttar Pradesh police recovered demonetised currency notes worth nearly Rs 100 crore from an under-construction house in Kanpur, late Tuesday.&nbsp;

Old notes of Rs 1000 and Rs 500 were banned in November 2016 to curb corruption and black money.

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<a href="https://twitter.com/hashtag/WATCH?src=hash&amp;ref_src=twsrc%5Etfw">#WATCH</a> Police seized demonetized currency worth crores from a residential premises in Kanpur. <a href="https://t.co/Hh7sLrWwoG">pic.twitter.com/Hh7sLrWwoG</a>
&mdash; ANI UP (@ANINewsUP) <a href="https://twitter.com/ANINewsUP/status/953498273557311489?ref_src=twsrc%5Etfw">January 17, 2018</a></blockquote>
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At least 17 people also have been arrested in&nbsp;connection with the case.

The notes were found stacked under a bed in three rooms of the under-construction house of builder Anand Khatri in Swarup Nagar.&nbsp;

The police also raided&nbsp;seventeen other places including two hotels in Gumti, Jarnailganj to seize the old currency which amounted to Rs 100 crores.

As per media reports, the money was kept for exchange through hawala and NRI transactions in Dubai and other countries.

Since the demonetisation was implemented, a large part of the money has been illegally channelled into the banking system.

Earlier NIA recovered 36 crores of the scrapped notes in November 2017.

In August&nbsp;last year, the Reserve Bank of India informed that 99% of the old currency returned after demonetisation.

17 people have been arrested in this regard

In a joint raid, the National Investigation Agency (NIA) and Uttar Pradesh police recovered demonetised currency notes worth nearly Rs 100 crore from an under-construction house in Kanpur, late Tuesday. Old notes of Rs 1000 and Rs 500 were banned in November 2016 to curb corruption and black money. #WATCH Police seized demonetized currency worth crores from a residential premises in Kanpur. pic.twitter.com/Hh7sLrWwoG — ANI UP (@ANINewsUP) January 17, 2018 × At least 17 people also have been arrested in connection with the case. The notes were found stacked under a bed in three rooms of the under-construction house of builder Anand Khatri in Swarup Nagar. The police also raided seventeen other places including two hotels in Gumti, Jarnailganj to seize the old currency which amounted to Rs 100 crores. As per media reports, the money was kept for exchange through hawala and NRI transactions in Dubai and other countries. Since the demonetisation was implemented, a large part of the money has been illegally channelled into the banking system. Earlier NIA recovered 36 crores of the scrapped notes in November 2017. In August last year, the Reserve Bank of India informed that 99% of the old currency returned after demonetisation.

Rs 100 crore found stacked under a bed in Kanpur home

A Haldwani-based transporter tried to kill himself -- he&#39;d reportedly consumed poison -- at Uttarakhand Agriculture Minister Subodh Uniyal&#39;s janta darbar&nbsp;at the BJP office in Dehradun.

Unhappy with the losses he had incurred due to GST and demonetisation, the 44-year-old man, Prakash Pandey, collapsed in front of the minister after telling him about his debts.&nbsp;

The man said he was unable to repay loans taken from finance companies and had already written to the prime minister, the finance minister, and BJP president Amit Shah, asking that the interest on his loans be waived.&nbsp;

After failing to pay the EMIs on three vehicles he&#39;d taken on loan, Pandey had come to Dehradun to meet Uniyal.

During his outburst, news reports quoted Pandey as saying the Congress was a better party since he had been &quot;financially ruined&quot; because of the BJP.

&quot;While he was still recounting his story, he collapsed. The party workers rushed him to the ICU of Doon hospital in my car,&quot; PTI reported Uniyal as saying.

The incident took place on Saturday afternoon. Pandey had come to the BJP with a bunch of documents including his letters to the Prime Minister&#39;s&nbsp;Office and the finance minister.&nbsp;

Pandey was rushed to the Doon Hospital where he was admitted to the ICU. He was later&nbsp;transferred to a private hospital.

Doctors said Pandey was in critical condition and was being kept under observation.

 
&nbsp;

Prakash Pandey, 44, said he'd written to the prime minister and the finance minister asking that the interest on the loans he'd taken be waived

A Haldwani-based transporter tried to kill himself -- he'd reportedly consumed poison -- at Uttarakhand Agriculture Minister Subodh Uniyal's janta darbar at the BJP office in Dehradun. Unhappy with the losses he had incurred due to GST and demonetisation, the 44-year-old man, Prakash Pandey, collapsed in front of the minister after telling him about his debts. The man said he was unable to repay loans taken from finance companies and had already written to the prime minister, the finance minister, and BJP president Amit Shah, asking that the interest on his loans be waived. After failing to pay the EMIs on three vehicles he'd taken on loan, Pandey had come to Dehradun to meet Uniyal. During his outburst, news reports quoted Pandey as saying the Congress was a better party since he had been "financially ruined" because of the BJP. "While he was still recounting his story, he collapsed. The party workers rushed him to the ICU of Doon hospital in my car," PTI reported Uniyal as saying. The incident took place on Saturday afternoon. Pandey had come to the BJP with a bunch of documents including his letters to the Prime Minister's Office and the finance minister. Pandey was rushed to the Doon Hospital where he was admitted to the ICU. He was later transferred to a private hospital. Doctors said Pandey was in critical condition and was being kept under observation.

Dehradun: Burdened by GST, demonetisation debt, man tries to kill himself at BJP office; critical

The Congress has accused Prime Minister Narendra Modi and Finance Minister Arun Jaitley of ignoring economic wisdom and dealing a &quot;catastrophic&quot; blow to India&#39;s growth story.

Party communication in-charge Randeep Surjewala claimed that the double whammy of &quot;Modi Made Disaster of Demonetisation&quot; and the implementation of a flawed GST were responsible for the economy&#39;s downturn.

&quot;An arrogant Prime Minister Narendra Modi and a failed Finance Minister Arun Jaitley, hell-bent upon ignoring economic wisdom, have dealt a catastrophic blow to India&#39;s growth story as proved by the latest GDP estimates slumping from 7.3 per cent to 6.5 per cent,&quot; he said yesterday.

He claimed the truth was that investment had stagnated, job creation was abysmal, exports were in dire straits, stalled projects were burgeoning, inflation remained unchecked and rural distress was at an all-time high.

&quot;Hype, hyperbole and headline management cannot be a substitute to the grim reality on the ground,&quot; he said.

He alleged that 6.5 per cent GDP growth &quot;detailed the failed promise of the prime minister and explained the abject failure of Modinomics&quot;.

He claimed that job creation was the biggest failure of the BJP government and said the labour bureau data showed that job creation was the lowest in 8 years.

&quot;As the government completes four years of its term, the people are seeing through the long distance between rhetoric and reality,&quot; he said, adding the people were watching and would give a befitting political reply when the time arrived.&nbsp;

Randeep Surjewala alleged that 6.5 per cent GDP growth "detailed the failed promise of the prime minister and explained the abject failure of Modinomics".

The Congress has accused Prime Minister Narendra Modi and Finance Minister Arun Jaitley of ignoring economic wisdom and dealing a "catastrophic" blow to India's growth story. Party communication in-charge Randeep Surjewala claimed that the double whammy of "Modi Made Disaster of Demonetisation" and the implementation of a flawed GST were responsible for the economy's downturn. "An arrogant Prime Minister Narendra Modi and a failed Finance Minister Arun Jaitley, hell-bent upon ignoring economic wisdom, have dealt a catastrophic blow to India's growth story as proved by the latest GDP estimates slumping from 7.3 per cent to 6.5 per cent," he said yesterday. He claimed the truth was that investment had stagnated, job creation was abysmal, exports were in dire straits, stalled projects were burgeoning, inflation remained unchecked and rural distress was at an all-time high. "Hype, hyperbole and headline management cannot be a substitute to the grim reality on the ground," he said. He alleged that 6.5 per cent GDP growth "detailed the failed promise of the prime minister and explained the abject failure of Modinomics". He claimed that job creation was the biggest failure of the BJP government and said the labour bureau data showed that job creation was the lowest in 8 years. "As the government completes four years of its term, the people are seeing through the long distance between rhetoric and reality," he said, adding the people were watching and would give a befitting political reply when the time arrived.

PM, Jaitley ignoring economic wisdom: Congress

It is safe to say that the issue of job creation was among the top economic issues of 2017, along with demonetisation and GST. And as a long-term issue, its importance definitely exceeds the other two, which though severe are likely to be short-term shocks. Further, riding on the youth vote in 2014, the Narendra Modi government has consistently made jobs its central plank, ensuring that the issue always remains in the news.

&nbsp;

The year began with the question of whether demonetisation had negatively affected job growth, especially in the informal sector. Unfortunately, like most questions about demonetisation and its impact on the informal economy, this one too suffers from lack of data to answer it. The government has doggedly refused to address the question directly by failing to conduct the necessary surveys at a national level. But anecdotal evidence, as well as survey evidence from a few sectors, does indicate that the severe contraction in economic activity caused by demonetisation did eliminate informal jobs on a large-scale.

&nbsp;

The long-run question is, however, what it has always been. Can the Indian economy generate employment in the required numbers to provide gainful, meaningful work to the millions of youth who enter the labour market each year?&nbsp;

&nbsp;

On this, 2017 will be known more as a year of confusion and backpedaling on promises mixed with some welcome developments on the data front.

&nbsp;

A principal source of confusion has been the term &ldquo;jobless growth.&rdquo; Only last week two ex-policymakers argued that &ldquo;India&rsquo;s jobless growth is a myth.&rdquo; Citing Labour Bureau survey data, the authors pointed out that India&rsquo;s problem is not lack of jobs, but rather lack of &ldquo;regular, productive, and well-paid jobs.&rdquo; But this has always been the understanding among all observers of the Indian economy.&nbsp;

&nbsp;

As I have also consistently pointed out in this column, jobless growth was never about the absence of jobs, it was about the failure of the formal sector to generate decent jobs, forcing the vast majority to work in the informal sector. The question is, why has growth mostly created &ldquo;bad&rdquo; jobs. And how can it create more &ldquo;good&rdquo; jobs? So it is rather late in the game to be resorting to such denial techniques and using clickbait headlines to boot.

&nbsp;

Another source of confusion has been the lack of data. The most frequently used NSSO data has been available only every five years. India did not have a large-scale, high-frequency employment data collection system till 2010. The Labour Bureau experimented with annual surveys from 2010 to 2015, but these were not used much by academics or policy-makers for quality as well as availability reasons, and have now been discontinued.&nbsp;

&nbsp;

Due to lack of reliable, high-frequency employment data, much poorly informed back and forth has been carried out in the op-ed pages. In mid-2017, a task-force was set up under then NITI Aayog Chairperson, Arvind Panagariya to prepare a report on how to improve the country&rsquo;s employment statistics system. Admitting that the debate &ldquo;has been taking place in the absence of accurate data or analysis&rdquo;, the report made recommendations to collect &ldquo;more reliable, timely and relevant labour market data&rdquo;.&nbsp;

&nbsp;

In this respect, a welcome development is that in 2017, the NSSO has started doing a Periodic Labour Force Survey (PLFS). This is an unprecedented (for India) continuous survey that will be conducted quarterly for urban areas and annually for rural and urban areas. So while 2017 passed with lack of adequate data to gauge what was happening to jobs, hopefully, 2018 will be different, creating the stage for an informed debate leading to the 2019 general election.

&nbsp;

The government&rsquo;s backpedalling on the jobs issue in 2017 has taken two forms. The first, after several weeks of bad press in mid-2017, BJP President Amit Shah issued a statement that it was not possible to provide formal sector jobs to everyone in a country of 125 crore people so self-employment was the answer. This was a clear admission of failure because it implied that the government did not think its policies were going to create formal jobs in the private sector in adequate numbers. Second, in order to make its performance in job creation seem better, the government proposed redefining what counts as a &ldquo;formal&rdquo; job. If we count all workers who are enrolled in some pension or provident fund scheme as &ldquo;formal&rdquo; then the picture looks better. While this may be understandable as a jobs accounting exercise, it hardly solves the actual problem of disguised unemployment plaguing millions.&nbsp;

&nbsp;

We need to get serious about three distinct issues with regard to the Indian labour market. First, the continued problem of bad, low-paying jobs and disguised unemployment, which is most of our labourforce. Second, the relatively new and fast-growing problem of open unemployment among the educated youth. As a proportion of the total labourforce,&nbsp; this is a small number, but it is a high visibility issue as seen in the large rallies taken out all across India for reservations in government jobs. Third, the question of a low and falling labour force participation rate. Compared to other developing countries, India has a much lower ratio of those employed or seeking work in the population aged 15 and above (53% compared to Indonesia&rsquo;s 66% or China&rsquo;s 69% and the world average of 62%). This is usually explained by withdrawal of women from the labour force due to prosperity or education. But it needs to be investigated further because &ldquo;discouraged workers&rdquo;, those who have given up looking for work, may be a part of the story as well.

&nbsp;

The final and potentially welcome development for this year is that the government is expected to announce a new National Employment Policy in the 2018 Union Budget. One hopes that such a policy will be adequately funded, and even more importantly will signal that the government places the interests of Indian workers before those of international investors or the global market.

&nbsp;

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL).

2017 will be known more as a year of confusion and backpedaling on promises of employment to the millions of youth who enter the labour market each year.

It is safe to say that the issue of job creation was among the top economic issues of 2017, along with demonetisation and GST. And as a long-term issue, its importance definitely exceeds the other two, which though severe are likely to be short-term shocks. Further, riding on the youth vote in 2014, the Narendra Modi government has consistently made jobs its central plank, ensuring that the issue always remains in the news. The year began with the question of whether demonetisation had negatively affected job growth, especially in the informal sector. Unfortunately, like most questions about demonetisation and its impact on the informal economy, this one too suffers from lack of data to answer it. The government has doggedly refused to address the question directly by failing to conduct the necessary surveys at a national level. But anecdotal evidence, as well as survey evidence from a few sectors, does indicate that the severe contraction in economic activity caused by demonetisation did eliminate informal jobs on a large-scale. The long-run question is, however, what it has always been. Can the Indian economy generate employment in the required numbers to provide gainful, meaningful work to the millions of youth who enter the labour market each year? On this, 2017 will be known more as a year of confusion and backpedaling on promises mixed with some welcome developments on the data front. A principal source of confusion has been the term “jobless growth.” Only last week two ex-policymakers argued that “India’s jobless growth is a myth.” Citing Labour Bureau survey data, the authors pointed out that India’s problem is not lack of jobs, but rather lack of “regular, productive, and well-paid jobs.” But this has always been the understanding among all observers of the Indian economy. As I have also consistently pointed out in this column, jobless growth was never about the absence of jobs, it was about the failure of the formal sector to generate decent jobs, forcing the vast majority to work in the informal sector. The question is, why has growth mostly created “bad” jobs. And how can it create more “good” jobs? So it is rather late in the game to be resorting to such denial techniques and using clickbait headlines to boot. Another source of confusion has been the lack of data. The most frequently used NSSO data has been available only every five years. India did not have a large-scale, high-frequency employment data collection system till 2010. The Labour Bureau experimented with annual surveys from 2010 to 2015, but these were not used much by academics or policy-makers for quality as well as availability reasons, and have now been discontinued. Due to lack of reliable, high-frequency employment data, much poorly informed back and forth has been carried out in the op-ed pages. In mid-2017, a task-force was set up under then NITI Aayog Chairperson, Arvind Panagariya to prepare a report on how to improve the country’s employment statistics system. Admitting that the debate “has been taking place in the absence of accurate data or analysis”, the report made recommendations to collect “more reliable, timely and relevant labour market data”. In this respect, a welcome development is that in 2017, the NSSO has started doing a Periodic Labour Force Survey (PLFS). This is an unprecedented (for India) continuous survey that will be conducted quarterly for urban areas and annually for rural and urban areas. So while 2017 passed with lack of adequate data to gauge what was happening to jobs, hopefully, 2018 will be different, creating the stage for an informed debate leading to the 2019 general election. The government’s backpedalling on the jobs issue in 2017 has taken two forms. The first, after several weeks of bad press in mid-2017, BJP President Amit Shah issued a statement that it was not possible to provide formal sector jobs to everyone in a country of 125 crore people so self-employment was the answer. This was a clear admission of failure because it implied that the government did not think its policies were going to create formal jobs in the private sector in adequate numbers. Second, in order to make its performance in job creation seem better, the government proposed redefining what counts as a “formal” job. If we count all workers who are enrolled in some pension or provident fund scheme as “formal” then the picture looks better. While this may be understandable as a jobs accounting exercise, it hardly solves the actual problem of disguised unemployment plaguing millions. We need to get serious about three distinct issues with regard to the Indian labour market. First, the continued problem of bad, low-paying jobs and disguised unemployment, which is most of our labourforce. Second, the relatively new and fast-growing problem of open unemployment among the educated youth. As a proportion of the total labourforce, this is a small number, but it is a high visibility issue as seen in the large rallies taken out all across India for reservations in government jobs. Third, the question of a low and falling labour force participation rate. Compared to other developing countries, India has a much lower ratio of those employed or seeking work in the population aged 15 and above (53% compared to Indonesia’s 66% or China’s 69% and the world average of 62%). This is usually explained by withdrawal of women from the labour force due to prosperity or education. But it needs to be investigated further because “discouraged workers”, those who have given up looking for work, may be a part of the story as well. The final and potentially welcome development for this year is that the government is expected to announce a new National Employment Policy in the 2018 Union Budget. One hopes that such a policy will be adequately funded, and even more importantly will signal that the government places the interests of Indian workers before those of international investors or the global market. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL).

Opinion: Did Demonetisation and GST create jobs in 2017?

The BJP is on course to take Gujarat, and most of Surat with it.&nbsp;

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Congratulations to all candidates in Surat for winning 12/12 seats! The people of Gujarat have rejected those who tried to divide us in the name of caste! The vision of Shri <a href="https://twitter.com/narendramodi?ref_src=twsrc%5Etfw">@narendramodi</a> ji &amp; Shri <a href="https://twitter.com/AmitShah?ref_src=twsrc%5Etfw">@amitshah</a> ji will march ahead! <a href="https://twitter.com/hashtag/BJPWinsGujarat?src=hash&amp;ref_src=twsrc%5Etfw">#BJPWinsGujarat</a> <a href="https://twitter.com/hashtag/GujaratVerdict?src=hash&amp;ref_src=twsrc%5Etfw">#GujaratVerdict</a> <a href="https://t.co/JOeQnkWEis">pic.twitter.com/JOeQnkWEis</a>
&mdash; Darshana Jardosh (@DarshanaJardosh) <a href="https://twitter.com/DarshanaJardosh/status/942671566835367936?ref_src=twsrc%5Etfw">December 18, 2017</a></blockquote>
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Surat was being closely watched because of the trader protests there against the GST.&nbsp;

They had not been happy with the Goods and Services Tax.&nbsp;

(It is important to note though that counting is still underway in Surat and the results of all 16 assembly seats in Surat have not yet been declared.)&nbsp;

But the Election Commission, which has declared leads, is at the moment giving the BJP the lead in at least 12 seats in Surat.&nbsp;

Surat is the hub of the baniya or trader community, which makes up 14% of Gujarat&#39;s population.&nbsp;

The protest that really got the BJP&#39;s attention was the one by Surat&#39;s textile traders. Surat is the country&#39;s largest man-made fabric hub.&nbsp;

The BJP was quick to act on the disenchantment.&nbsp;

It cut the GST rate on yarn from 18% to 12%, increased the customs duty on fabric by 25% to curb imports from China, and offered relief in the filing of GST returns.&nbsp;

It also cut the tax rate on khakhra, a popular Gujarati snack, and some namkeens.&nbsp;

And announced a number of relief measures for exporters.&nbsp;

&nbsp;

Surat was being closely watched because of the trader protests there against the GST

The BJP is on course to take Gujarat, and most of Surat with it. Congratulations to all candidates in Surat for winning 12/12 seats! The people of Gujarat have rejected those who tried to divide us in the name of caste! The vision of Shri @narendramodi ji & Shri @amitshah ji will march ahead! #BJPWinsGujarat #GujaratVerdict pic.twitter.com/JOeQnkWEis — Darshana Jardosh (@DarshanaJardosh) December 18, 2017 × Surat was being closely watched because of the trader protests there against the GST. They had not been happy with the Goods and Services Tax. (It is important to note though that counting is still underway in Surat and the results of all 16 assembly seats in Surat have not yet been declared.) But the Election Commission, which has declared leads, is at the moment giving the BJP the lead in at least 12 seats in Surat. Surat is the hub of the baniya or trader community, which makes up 14% of Gujarat's population. The protest that really got the BJP's attention was the one by Surat's textile traders. Surat is the country's largest man-made fabric hub. The BJP was quick to act on the disenchantment. It cut the GST rate on yarn from 18% to 12%, increased the customs duty on fabric by 25% to curb imports from China, and offered relief in the filing of GST returns. It also cut the tax rate on khakhra, a popular Gujarati snack, and some namkeens. And announced a number of relief measures for exporters.

Gujarat election results: Hub of trader protests, BJP on course to winning most seats in Surat

Widening its probe into bitcoin investments and trade, the Income Tax (IT) department is set to issue notices to 4 to 5 lakh high networth individuals (HNI) across the country who were trading on the exchanges of this unregulated virtual currency.

The taxman had conducted surveys at nine such exchanges last week to check instances of tax evasion.

The department, official sources said,&nbsp;that out of the estimated 20 lakh entities registered on these exchanges, about 4 to 5 lakh were &quot;operational&quot; and indulging in transactions and investments.

Also read:&nbsp;<a href="http://www.wionews.com/business-economy/i-t-dept-conducts-surveys-at-bitcoin-exchanges-country-wide-26625">I-T dept conducts surveys at Bitcoin exchanges country-wide</a>

Sources said that the Bengaluru investigation wing of the tax department, which supervised last week&#39;s operations, has now dispatched the information of the individuals and entities found on these databases to eight other such wings across the country for a detailed probe.

&quot;Those individuals and entities whose records were recovered by the department are now being probed under tax evasion charges. Notices are being issued and they will have to pay capital gains tax on the bitcoin investments and trade,&quot; a senior official privy to the operation said.

About 4-5 lakh HNIs and their businesses are being issued notices which will first seek their relevant financial details and subsequently establish the tax demand, if any, he said.

As the bitcoins or the virtual currencies (VCs) are illegal and unregulated in the country as of now, the IT department has taken action as per the existing provisions, they said.

The survey operations conducted last week, under section 133 A of the Income Tax Act, were undertaken for &quot;gathering evidence for establishing the identity of investors and traders, the transaction undertaken by them, identity of counter-parties, related bank accounts used, among others,&quot; they said.

A survey action under the IT law pertains to the tax officials making a surprise visit to the business premises of the party under action but not their residential ones.

The trigger for the action is understood to be the huge spike being registered in the value of bitcoins and other virtual currencies in the recent past.

Suspected black money being converted into white, post demonetisation, through the use of bitcoins was also under the department&#39;s scanner, officials said.

Earlier this month, there was a spurt in the value of a bitcoin. It rose from under USD 10,000 at the start of the year to close to USD 20,000, before a sharp 20 per cent plunge within hours.

Bitcoin, a virtual currency, is not regulated in the country and its circulation has been a cause for concern among central bankers the world over for quite a while now.

The Reserve Bank of India (RBI) has also cautioned users, holders and traders of virtual currencies. The government has also said that it does not recognise &#39;crypto-currency&#39; as legal tender in India.

In March, the Union finance ministry constituted an Inter-Disciplinary Committee to take stock of the present status of virtual currencies both in India and globally and suggest measures for dealing with them.

The committee has submitted its report which is being examined.

The notices will first seek the relevant financial details and then establish tax demand, if any

Widening its probe into bitcoin investments and trade, the Income Tax (IT) department is set to issue notices to 4 to 5 lakh high networth individuals (HNI) across the country who were trading on the exchanges of this unregulated virtual currency. The taxman had conducted surveys at nine such exchanges last week to check instances of tax evasion. The department, official sources said, that out of the estimated 20 lakh entities registered on these exchanges, about 4 to 5 lakh were "operational" and indulging in transactions and investments. Also read: I-T dept conducts surveys at Bitcoin exchanges country-wide Sources said that the Bengaluru investigation wing of the tax department, which supervised last week's operations, has now dispatched the information of the individuals and entities found on these databases to eight other such wings across the country for a detailed probe. "Those individuals and entities whose records were recovered by the department are now being probed under tax evasion charges. Notices are being issued and they will have to pay capital gains tax on the bitcoin investments and trade," a senior official privy to the operation said. About 4-5 lakh HNIs and their businesses are being issued notices which will first seek their relevant financial details and subsequently establish the tax demand, if any, he said. As the bitcoins or the virtual currencies (VCs) are illegal and unregulated in the country as of now, the IT department has taken action as per the existing provisions, they said. The survey operations conducted last week, under section 133 A of the Income Tax Act, were undertaken for "gathering evidence for establishing the identity of investors and traders, the transaction undertaken by them, identity of counter-parties, related bank accounts used, among others," they said. A survey action under the IT law pertains to the tax officials making a surprise visit to the business premises of the party under action but not their residential ones. The trigger for the action is understood to be the huge spike being registered in the value of bitcoins and other virtual currencies in the recent past. Suspected black money being converted into white, post demonetisation, through the use of bitcoins was also under the department's scanner, officials said. Earlier this month, there was a spurt in the value of a bitcoin. It rose from under USD 10,000 at the start of the year to close to USD 20,000, before a sharp 20 per cent plunge within hours. Bitcoin, a virtual currency, is not regulated in the country and its circulation has been a cause for concern among central bankers the world over for quite a while now. The Reserve Bank of India (RBI) has also cautioned users, holders and traders of virtual currencies. The government has also said that it does not recognise 'crypto-currency' as legal tender in India. In March, the Union finance ministry constituted an Inter-Disciplinary Committee to take stock of the present status of virtual currencies both in India and globally and suggest measures for dealing with them. The committee has submitted its report which is being examined.

Income Tax to send notices to 4-5 lakh people trading in bitcoin

An alleged diary has surfaced from notorious sand mining baron Sekar Reddy with incriminating details about &quot;payoffs&quot;&nbsp;given to then PWD minister and former chief minister of Tamil Nadu O. Panneerselvam(OPS). 
&nbsp; 
Panneerselvam who is the current deputy chief minister of Tamil Nadu and &quot;his associates&quot; feature multiple times in the alleged diary entries of mining baron Shekhar Reddy. 
&nbsp; 
The income tax sleuths allegedly got hold of the diary after a raid on Sekhar Reddy&#39;s house. The I-T department reportedly unearthed several thousand demonetised currency and gold from Reddy&#39;s residence.

The diary copy dated February 24th, 2016, allegedly names OPS as &#39;Periyavar&#39; (Elder one), Mannargudi Mahadevan of Mannargudi family and an advocate being &quot;paid in crores&quot;. 
&nbsp; 
Names of Manargudi Mahadevan also figure in the diary entry details. Mannargudi Mahadevan is a relative of Sasikala and part of Mannargudi clan. 
&nbsp; 
Periyavar(code name for OPS), Ramesh, who is the personal assistant of OPS&nbsp;and advocate Kasi, who is the son-in-law of OPS and former advocate for Tamil Nadu government housing board are the three prominent names who&nbsp;feature multiple times. 
&nbsp; 
The diary reportedly noted that Ramesh received Rs 1.5 crore on June 22nd, then again Rs 50 lakh on July 14th, Rs 25 lakh on July 20th, after that he received Rs 3.7 lakh on October 28th and Rs 20 lakh on October 31st.&nbsp;

It amounts to Rs 2.9 crore which he allegedly received&nbsp;over a four-month period. 
&nbsp; 
The son-in-law of OPS advocate Kasi reportedly received Rs 1 crore on August 31st.&nbsp;Periyavar or OPS was allegedly paid Rs 25 lakh on November 16th. 
&nbsp; 
OPS &amp; Ramesh were paid Rs 3.5 crore on August 31st and his advocate was paid Rs 3.7 lakh on October 28th.

Panneerselvam who is the current deputy chief minister of Tamil Nadu and "his associates" feature multiple times in the alleged diary entries of mining baron Shekhar Reddy.

An alleged diary has surfaced from notorious sand mining baron Sekar Reddy with incriminating details about "payoffs" given to then PWD minister and former chief minister of Tamil Nadu O. Panneerselvam(OPS). Panneerselvam who is the current deputy chief minister of Tamil Nadu and "his associates" feature multiple times in the alleged diary entries of mining baron Shekhar Reddy. The income tax sleuths allegedly got hold of the diary after a raid on Sekhar Reddy's house. The I-T department reportedly unearthed several thousand demonetised currency and gold from Reddy's residence. The diary copy dated February 24th, 2016, allegedly names OPS as 'Periyavar' (Elder one), Mannargudi Mahadevan of Mannargudi family and an advocate being "paid in crores". Names of Manargudi Mahadevan also figure in the diary entry details. Mannargudi Mahadevan is a relative of Sasikala and part of Mannargudi clan. Periyavar(code name for OPS), Ramesh, who is the personal assistant of OPS and advocate Kasi, who is the son-in-law of OPS and former advocate for Tamil Nadu government housing board are the three prominent names who feature multiple times. The diary reportedly noted that Ramesh received Rs 1.5 crore on June 22nd, then again Rs 50 lakh on July 14th, Rs 25 lakh on July 20th, after that he received Rs 3.7 lakh on October 28th and Rs 20 lakh on October 31st. It amounts to Rs 2.9 crore which he allegedly received over a four-month period. The son-in-law of OPS advocate Kasi reportedly received Rs 1 crore on August 31st. Periyavar or OPS was allegedly paid Rs 25 lakh on November 16th. OPS & Ramesh were paid Rs 3.5 crore on August 31st and his advocate was paid Rs 3.7 lakh on October 28th.

Sand mining baron Sekar Reddy's 'diary' names Panneerselvam in payoff scandal

Demonisation may have been adopted with an aim to banish black money, counter-terror financing and remove counterfeit currency, but it wasn&#39;t long before fake currency notes of Rs. 2,000 started circulating around the nation after just 53 days of its commencement.&nbsp;

According to data released by National Crime Records Bureau&rsquo;s (NCRB) on November 30, around 2,272 fake notes of Rs. 2,000 were seized in 2016, shortly after demonetization was implemented.&nbsp;

Around 1,300 notes were seized from Gujarat, 548 from Punjab, 254 from Karnataka, 114 from Telangana, 27 from Maharashtra, 8 from Madhya Pradesh, 6 from Rajasthan and 3 from Andhra Pradesh, Arunachal Pradesh and Haryana each.&nbsp;

Jammu and Kashmir and Kerala accounted for two fake notes each. One such note was seized in Manipur as well as in Odisha.

No fake note was recovered from Chhattisgarh, Sikkim, Andaman and Nicobar Islands, Dadra and Nagar Haveli, Daman and Diu as well as Lakshadweep, the NCRB data says.

The data said a total of 1,172 FIRs were registered and 1,107 people arrested for their involvement in the illegal trade.

The Rs 2,000 notes were part of the 281,839 fake notes of various denominations recovered from different locations across India

Demonisation may have been adopted with an aim to banish black money, counter-terror financing and remove counterfeit currency, but it wasn't long before fake currency notes of Rs. 2,000 started circulating around the nation after just 53 days of its commencement. According to data released by National Crime Records Bureau’s (NCRB) on November 30, around 2,272 fake notes of Rs. 2,000 were seized in 2016, shortly after demonetization was implemented. Around 1,300 notes were seized from Gujarat, 548 from Punjab, 254 from Karnataka, 114 from Telangana, 27 from Maharashtra, 8 from Madhya Pradesh, 6 from Rajasthan and 3 from Andhra Pradesh, Arunachal Pradesh and Haryana each. Jammu and Kashmir and Kerala accounted for two fake notes each. One such note was seized in Manipur as well as in Odisha. No fake note was recovered from Chhattisgarh, Sikkim, Andaman and Nicobar Islands, Dadra and Nagar Haveli, Daman and Diu as well as Lakshadweep, the NCRB data says. The data said a total of 1,172 FIRs were registered and 1,107 people arrested for their involvement in the illegal trade.

Fake Rs 2,000 currency notes surfaced 53 days after demonetisation: NCRB

Continuing his trail of attacks on PM Modi, Dr Manmohan Sigh on Thursday questioned his demonetization scheme once again, claiming that he has betrayed the trust of fellow &#39;Gujratis&#39;.

While talking to the crowd in Gujrat&#39;s Rajkot, the former PM said: &quot;The people of Rajkot and Gujarat trusted the Prime Minister and believed in the policy of demonetisation in the hope that their sacrifice would benefit India. Their faith and hopes have been shattered. Modiji has betrayed the trust that Gujaratis had reposed in him&quot; he said.&nbsp;

He has also urged people to ask officials to present documents related to demonetisation.

&quot;We must demand the government to release all the documents related to demonetisation in public domain for scrutiny&quot;, he said.

&quot;99% of the demonetised currency came back to the banks. It is clear that a lot of black money got converted to white and corruption continues to flourish. One immediate impact of demonetisation has been on job sector. Therefore, demonetisation was an uninformed attack and a disastrous decision for our economy,&quot; he further added.&nbsp;

He previously also commented on <a href="http://www.wionews.com/preview/article/26119">Modi&#39;s government&#39;s economic policies</a> saying that to equal the UPA&#39;s ten year average, the economy will have to grow at 10.6 per cent in the fifth year.&nbsp;

He previously also commented on Modi's government's economic policies saying that to equal the UPA's ten year average, the economy will have to grow at 10.6 per cent in the fifth year

Continuing his trail of attacks on PM Modi, Dr Manmohan Sigh on Thursday questioned his demonetization scheme once again, claiming that he has betrayed the trust of fellow 'Gujratis'. While talking to the crowd in Gujrat's Rajkot, the former PM said: "The people of Rajkot and Gujarat trusted the Prime Minister and believed in the policy of demonetisation in the hope that their sacrifice would benefit India. Their faith and hopes have been shattered. Modiji has betrayed the trust that Gujaratis had reposed in him" he said. He has also urged people to ask officials to present documents related to demonetisation. "We must demand the government to release all the documents related to demonetisation in public domain for scrutiny", he said. "99% of the demonetised currency came back to the banks. It is clear that a lot of black money got converted to white and corruption continues to flourish. One immediate impact of demonetisation has been on job sector. Therefore, demonetisation was an uninformed attack and a disastrous decision for our economy," he further added. He previously also commented on Modi's government's economic policies saying that to equal the UPA's ten year average, the economy will have to grow at 10.6 per cent in the fifth year.

PM Modi has betrayed Gujaratis: Manmohan Singh

In a scathing attack on Prime Minister Narendra Modi, his predecessor Manmohan Singh today said Modi failed to understand the &quot;pains&quot; of his note ban and GST decisions were going to unleash on the people of his own home state.

Calling demonetisation an &quot;uninformed, half-baked crusade&quot; and GST a &quot;badly designed and hastily implemented&quot; measure, Singh also lamented the &quot;low-level rhetoric&quot; used by the ruling party.

&quot;I wish the prime minister would find more dignified ways of impressing upon the crowds and seeking their votes...,&quot; he said.

&quot;Just as you were recovering from one blow (of demonetisation), came the GST. Nobody consulted you or tried to understand how your dhandha (business) works,&quot; he told a gathering of members of the local business community here.

&quot;The prime minister is from Gujarat, and he claims to understand Gujarat and the poor more than anyone else. How is it that he never understood the pains his decisions will unleash on you?&quot; Singh asked.

&quot;Your business works on trust and relationships. Without trust in each other, Surat will collapse. You extended this trust to the prime minister and his promise of &#39;acchhe din&#39; (good days). The hope symbolised in those dreams now lies shattered,&quot; he said.

In Surat alone, 89,000 powerlooms were sold as scrap and it led to a loss of 31,000 jobs, Singh said. &quot;There are countless such examples from industrial clusters and big mandis (markets) from across the country.&quot;

China benefited from this situation, he claimed.

&quot;In FY 2016-17, India&#39;s imports from China stood at Rs 1.96 lakh crore. During the same period in FY 2017-18, the imports from China increased to Rs 2.41 lakh crore. This unprecedented increase in imports by more than Rs 45,000 crore, a 23 per cent increase in a year, can be attributed largely to demonetisation and GST.

&quot;These twin blows damaged India&#39;s MSME sector and our businesses had to turn to Chinese imports at the cost of India jobs,&quot; the senior Congress leader said. 
On demonetisation, Singh said, &quot;This is an uninformed, half-baked crusade on black money where he (Modi) painted everyone as a thief, while real culprits have gotten away.&quot;

The Goods and Services Tax was &quot;badly designed and hastily implemented&quot;, the economist-turned-politician said.

Maintaining that demonetisation was not the solution to the problem of black money and tax evasion, Singh said the costs of demonetisation substantially exceeded its benefits, and the decision &quot;proved to be mere bluster to reap political dividends while the real offenders have escaped&quot;.

Demonetisation and GST have also &quot;sown a deep-rooted fear of tax terrorism among the business community&quot;, he said.

&quot;At a time when the economy has slowed down considerably, despite favourable global macro-economic conditions, the fear of tax terrorism has eroded the confidence of the businesses to invest,&quot; he said.

&quot;This attitude of suspecting everyone to be a thief or anti-national, the low-level rhetoric is damaging the democratic discourse and has real consequences for how we relate to one another as citizens. Political leaders must stick to the high road,&quot; he said.

Singh said on every social indicator, from infant and maternal mortality rates to female literacy, Gujarat has fallen behind the best performing states, including Himachal Pradesh, Karnataka, Kerala and Tamil Nadu.

He said the recent agitations by the youth cutting across different sections of the society was an indication of the deep dissatisfaction with the performance of successive BJP governments.

The former prime minister said a Congress government in the state will hear the voice of every Gujarati regardless of caste, creed, gender or class.

Later, talking to reporters, Singh strongly denied Modi&#39;s allegation that the Congress and Congress-led governments hated Gujaratis.

&quot;Nothing can be farther from the truth. I realise that many things are said in election times. But when they are gross distortions, they need to be rebutted,&quot; he said, adding that Jawaharlal Nehru, the country&#39;s first prime minister, and the &quot;most famous Gujarati&quot; Sardar Vallabhbhai Patel worked hand-in-hand, and &quot;nothing is gained, as is often attempted by Modi, by pitting the two great leaders apart.&quot;

Modi was &quot;denigrating the country&quot; when claiming that Congress party did nothing in 70 years, the former PM said.

&quot;I wish the prime minister would find more dignified ways of impressing upon the crowds and seeking their votes without resorting to statements which denigrate our country,&quot; he said.

&quot;...While denigrating the past, the prime minister also tends to exaggerate what he will do in future. He was recently quoted in the press as saying that India will become a developed country by 2022,&quot; Singh said, adding that to achieve that, India needed to grow at the rate of 35 per cent per year.

The government should get out of the &quot;culture of constant self-praise&quot;, Singh said.

&quot;In the ten years of UPA-I and II, when I was the prime minister, we produced 7.8 per cent GDP growth on average. This includes the slow-down in the last two years of our government. When the present government took over, they said they would take growth to 8 to 10 per cent. Modi so far has produced an average of only 7.3 per cent in the first three years,&quot; he said.&nbsp;

"The prime minister is from Gujarat, and he claims to understand Gujarat and the poor more than anyone else. How is it that he never understood the pains his decisions will unleash on you?" Singh asked.

In a scathing attack on Prime Minister Narendra Modi, his predecessor Manmohan Singh today said Modi failed to understand the "pains" of his note ban and GST decisions were going to unleash on the people of his own home state. Calling demonetisation an "uninformed, half-baked crusade" and GST a "badly designed and hastily implemented" measure, Singh also lamented the "low-level rhetoric" used by the ruling party. "I wish the prime minister would find more dignified ways of impressing upon the crowds and seeking their votes...," he said. "Just as you were recovering from one blow (of demonetisation), came the GST. Nobody consulted you or tried to understand how your dhandha (business) works," he told a gathering of members of the local business community here. "The prime minister is from Gujarat, and he claims to understand Gujarat and the poor more than anyone else. How is it that he never understood the pains his decisions will unleash on you?" Singh asked. "Your business works on trust and relationships. Without trust in each other, Surat will collapse. You extended this trust to the prime minister and his promise of 'acchhe din' (good days). The hope symbolised in those dreams now lies shattered," he said. In Surat alone, 89,000 powerlooms were sold as scrap and it led to a loss of 31,000 jobs, Singh said. "There are countless such examples from industrial clusters and big mandis (markets) from across the country." China benefited from this situation, he claimed. "In FY 2016-17, India's imports from China stood at Rs 1.96 lakh crore. During the same period in FY 2017-18, the imports from China increased to Rs 2.41 lakh crore. This unprecedented increase in imports by more than Rs 45,000 crore, a 23 per cent increase in a year, can be attributed largely to demonetisation and GST. "These twin blows damaged India's MSME sector and our businesses had to turn to Chinese imports at the cost of India jobs," the senior Congress leader said. On demonetisation, Singh said, "This is an uninformed, half-baked crusade on black money where he (Modi) painted everyone as a thief, while real culprits have gotten away." The Goods and Services Tax was "badly designed and hastily implemented", the economist-turned-politician said. Maintaining that demonetisation was not the solution to the problem of black money and tax evasion, Singh said the costs of demonetisation substantially exceeded its benefits, and the decision "proved to be mere bluster to reap political dividends while the real offenders have escaped". Demonetisation and GST have also "sown a deep-rooted fear of tax terrorism among the business community", he said. "At a time when the economy has slowed down considerably, despite favourable global macro-economic conditions, the fear of tax terrorism has eroded the confidence of the businesses to invest," he said. "This attitude of suspecting everyone to be a thief or anti-national, the low-level rhetoric is damaging the democratic discourse and has real consequences for how we relate to one another as citizens. Political leaders must stick to the high road," he said. Singh said on every social indicator, from infant and maternal mortality rates to female literacy, Gujarat has fallen behind the best performing states, including Himachal Pradesh, Karnataka, Kerala and Tamil Nadu. He said the recent agitations by the youth cutting across different sections of the society was an indication of the deep dissatisfaction with the performance of successive BJP governments. The former prime minister said a Congress government in the state will hear the voice of every Gujarati regardless of caste, creed, gender or class. Later, talking to reporters, Singh strongly denied Modi's allegation that the Congress and Congress-led governments hated Gujaratis. "Nothing can be farther from the truth. I realise that many things are said in election times. But when they are gross distortions, they need to be rebutted," he said, adding that Jawaharlal Nehru, the country's first prime minister, and the "most famous Gujarati" Sardar Vallabhbhai Patel worked hand-in-hand, and "nothing is gained, as is often attempted by Modi, by pitting the two great leaders apart." Modi was "denigrating the country" when claiming that Congress party did nothing in 70 years, the former PM said. "I wish the prime minister would find more dignified ways of impressing upon the crowds and seeking their votes without resorting to statements which denigrate our country," he said. "...While denigrating the past, the prime minister also tends to exaggerate what he will do in future. He was recently quoted in the press as saying that India will become a developed country by 2022," Singh said, adding that to achieve that, India needed to grow at the rate of 35 per cent per year. The government should get out of the "culture of constant self-praise", Singh said. "In the ten years of UPA-I and II, when I was the prime minister, we produced 7.8 per cent GDP growth on average. This includes the slow-down in the last two years of our government. When the present government took over, they said they would take growth to 8 to 10 per cent. Modi so far has produced an average of only 7.3 per cent in the first three years," he said.

Manmohan to PM: Find 'more dignified ways' to seek votes

Union Minister Dharmendra Pradhan has said that former prime minister Manmohan Singh&#39;s rebuke of demonetisation has risen out of the latter&#39;s compulsion to show allegiance to the Gandhi family.

&quot;This is Manmohan Singh&#39;s helplessness. Just to show allegiance to that family, he has to say wrong things. GDP figures have just come out and all his questions have been answered,&quot; Pradhan told ANI today.

Earlier in the day, the former prime minister termed November 8 the day when the ban on Rs 500 and Rs 1000 was implemented- as a &quot;black day&quot; for the economy and democracy of the country.

&quot;I invoke memories of more than 100 people who lost their lives while standing in queues as a result of demonetisation. I say with immense pain and a sense of deep responsibility that the 8th of November was a black day for our economy and democracy,&quot; Singh said at a press conference in Surat.

The Bharatiya Janata Party (BJP) led government demonetised notes of Rs 500 and Rs 1000 on November 8, in a bid to curb the hoarding of black money in the country. The masses, however, were hard hit by the move, which suffered severe cash crunch and had to stand in long queues outside banks and ATMs, to withdraw money.

The impact of demonetisation on curbing corruption remains a bone of contention.

Union Minister Dharmendra Pradhan has said that former prime minister Manmohan Singh's rebuke of demonetisation has risen out of the latter's compulsion to show allegiance to the Gandhi family

Union Minister Dharmendra Pradhan has said that former prime minister Manmohan Singh's rebuke of demonetisation has risen out of the latter's compulsion to show allegiance to the Gandhi family. "This is Manmohan Singh's helplessness. Just to show allegiance to that family, he has to say wrong things. GDP figures have just come out and all his questions have been answered," Pradhan told ANI today. Earlier in the day, the former prime minister termed November 8 the day when the ban on Rs 500 and Rs 1000 was implemented- as a "black day" for the economy and democracy of the country. "I invoke memories of more than 100 people who lost their lives while standing in queues as a result of demonetisation. I say with immense pain and a sense of deep responsibility that the 8th of November was a black day for our economy and democracy," Singh said at a press conference in Surat. The Bharatiya Janata Party (BJP) led government demonetised notes of Rs 500 and Rs 1000 on November 8, in a bid to curb the hoarding of black money in the country. The masses, however, were hard hit by the move, which suffered severe cash crunch and had to stand in long queues outside banks and ATMs, to withdraw money. The impact of demonetisation on curbing corruption remains a bone of contention.

Manmohan Singh's rebuke of demonetisation is just sycophancy:  Dharmendra Pradhan

Surat is the heart of diamond industry in India. An industry which remained politically inert in the past suddenly woke up to new tax regime succeeded by demonetisation exercise. Industry supports the reform goal but not the implementation process. Many say that Centre should have surveyed the diamond industry before making new rules for them. 
&nbsp; 
Unlike other industries, diamond sector is workers led industry as skill set remains central to the manufacturing process. On an average, a worker can start from 15,000 rupees and end up making 5 lakh a month all depending upon skill set he possesses. It is this skill set which revolted against demonetisation. Most of the workers preferred cash. It meant less taxes and no compliance. Owners were left baffled and sore. Many workers changed their master leading to closures. Those who could manage the cash retained the best and those who couldn&rsquo;t had to stop work on the floor. An industry where workers choose the owners, demonetisation tested the resolve of the owners to keep the talent in their nest. 
&nbsp; 
&ldquo;For the first-time owner worker conflict erupted in our industry. It was unprecedented. We had to run from pillar to post to manage the business,&rdquo; said Dinesh Navadiya, known diamond merchant. 
&nbsp; 
The workers had to be convinced of the benefits of the measure Prime Minister had undertaken. The mindset changed very slowly. Most of the workers come from rural areas with no personal history of banking. It also meant they had no knowledge of paperwork required for opening a bank account. With money going through the banking system and papers in place, they became eligible for loans. Many applied for Awas Yojans schemes too. It eventually benefitted them. 
&nbsp; 
But heartburn remains. Many owners privately admit that government banks did a bad job during demonetisation. &ldquo;Private banks did a better job. Infrastructure should have been in place for demonetisation,&rdquo; said Dinesh Navadiya. 
&nbsp; 
Surat&rsquo;s diamond industry is the processing centre of the precious stones in India. It imports 100 per cent of the raw material and exports 94 per cent of it. Only 6 per cent of the polished diamonds are sold domestically. It also does not enjoy a high profit margin. At maximum owners enjoy profit margins between 1 to 2 per cent. 
&nbsp; 
The pinch increased after GST. Unlike demonetisation whose effect was temporary, GST changed the way industry operated. It understood its benefits but was appalled at its implementation. It was this shock which provided muscle to the Congress in South Gujarat. 
&nbsp; 
Textile sector was even hit harder. Demonetisation had decreased their sales in the rural areas shrinking both production and consumption leading to jobless in small and medium scale industry. It was this combined resentment which streets witnessed in succeeding months. Diamond industry escaped the full wrath of GST as it was only manufacturing locally and exporting abroad whereas Textile Industry was not only manufacturing locally but also traded the rural areas where economy entirely depended on the cash. 
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Even then there are major irritants. Industry wants B2B form to be done away with. It allows the government to impose interstate GST when goods are moved from one state to another independent of whether they are being sold or not. Traders crib that it adds to the cost. They argue that two other biggest hubs of diamond manufacturing, Israel and Belgium do not have such limitations. Traders also want 3 per cent GST done away on local consumption. On an average 25 per cent of the material has to be moved locally for processing and polishing because every owner doesn&rsquo;t possess all the high skill set workers. For example, if the import has a stock of 20 per cent of raw diamond which can only be shaped in oval and the owner has masters of squares and circle, the rest has to be processed in someone else&rsquo;s unit. On this government decided to levy 3 percent tax. Traders find it very unfair. With low percentage of profit, it adds to the cost. 
&nbsp; 
More than paper work adjustment, industry&rsquo;s major battle is with attitude. It is about compliance and taxation. Most of the owners are willing to give their share of Provident Fund and Employee Welfare Fund but the workers aren&rsquo;t. Many say that it becomes difficult to impose such policies on workers as they tend to move away. 
&nbsp; 
Though no one denies that GST has opened the gates for new export schemes, subsidies for machinery and better-priced loans but attitudes are a slow change. Implementation does remain a concern but they want the government to remember that it is a small and medium industry which generates jobs for a big chunk of Indian population and their convenience must be kept in mind. 
&nbsp; 
Modi has taken a risk to implement GST but no reforms are without risk. The results will show whether economic issues will remain on top or Gujarati asmita appropriated by Modi. Jury is still out on it.

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The Surat diamond industry which remained politically inert in the past suddenly woke up to new tax regime succeeded by demonetisation exercise

Surat is the heart of diamond industry in India. An industry which remained politically inert in the past suddenly woke up to new tax regime succeeded by demonetisation exercise. Industry supports the reform goal but not the implementation process. Many say that Centre should have surveyed the diamond industry before making new rules for them. Unlike other industries, diamond sector is workers led industry as skill set remains central to the manufacturing process. On an average, a worker can start from 15,000 rupees and end up making 5 lakh a month all depending upon skill set he possesses. It is this skill set which revolted against demonetisation. Most of the workers preferred cash. It meant less taxes and no compliance. Owners were left baffled and sore. Many workers changed their master leading to closures. Those who could manage the cash retained the best and those who couldn’t had to stop work on the floor. An industry where workers choose the owners, demonetisation tested the resolve of the owners to keep the talent in their nest. “For the first-time owner worker conflict erupted in our industry. It was unprecedented. We had to run from pillar to post to manage the business,” said Dinesh Navadiya, known diamond merchant. The workers had to be convinced of the benefits of the measure Prime Minister had undertaken. The mindset changed very slowly. Most of the workers come from rural areas with no personal history of banking. It also meant they had no knowledge of paperwork required for opening a bank account. With money going through the banking system and papers in place, they became eligible for loans. Many applied for Awas Yojans schemes too. It eventually benefitted them. But heartburn remains. Many owners privately admit that government banks did a bad job during demonetisation. “Private banks did a better job. Infrastructure should have been in place for demonetisation,” said Dinesh Navadiya. Surat’s diamond industry is the processing centre of the precious stones in India. It imports 100 per cent of the raw material and exports 94 per cent of it. Only 6 per cent of the polished diamonds are sold domestically. It also does not enjoy a high profit margin. At maximum owners enjoy profit margins between 1 to 2 per cent. The pinch increased after GST. Unlike demonetisation whose effect was temporary, GST changed the way industry operated. It understood its benefits but was appalled at its implementation. It was this shock which provided muscle to the Congress in South Gujarat. Textile sector was even hit harder. Demonetisation had decreased their sales in the rural areas shrinking both production and consumption leading to jobless in small and medium scale industry. It was this combined resentment which streets witnessed in succeeding months. Diamond industry escaped the full wrath of GST as it was only manufacturing locally and exporting abroad whereas Textile Industry was not only manufacturing locally but also traded the rural areas where economy entirely depended on the cash. Even then there are major irritants. Industry wants B2B form to be done away with. It allows the government to impose interstate GST when goods are moved from one state to another independent of whether they are being sold or not. Traders crib that it adds to the cost. They argue that two other biggest hubs of diamond manufacturing, Israel and Belgium do not have such limitations. Traders also want 3 per cent GST done away on local consumption. On an average 25 per cent of the material has to be moved locally for processing and polishing because every owner doesn’t possess all the high skill set workers. For example, if the import has a stock of 20 per cent of raw diamond which can only be shaped in oval and the owner has masters of squares and circle, the rest has to be processed in someone else’s unit. On this government decided to levy 3 percent tax. Traders find it very unfair. With low percentage of profit, it adds to the cost. More than paper work adjustment, industry’s major battle is with attitude. It is about compliance and taxation. Most of the owners are willing to give their share of Provident Fund and Employee Welfare Fund but the workers aren’t. Many say that it becomes difficult to impose such policies on workers as they tend to move away. Though no one denies that GST has opened the gates for new export schemes, subsidies for machinery and better-priced loans but attitudes are a slow change. Implementation does remain a concern but they want the government to remember that it is a small and medium industry which generates jobs for a big chunk of Indian population and their convenience must be kept in mind. Modi has taken a risk to implement GST but no reforms are without risk. The results will show whether economic issues will remain on top or Gujarati asmita appropriated by Modi. Jury is still out on it.

Diamonds are forever: Inside Surat's diamond industry

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