Wednesday, 5 April 2017

Welcome FY 2017-18. What it means for you and India

What it means for you and India

FY 2016-17 was a unique year for Indian financial systems. Breaking the age-old tradition of presenting budget on the last day of February. Finance Minister Arun Jaitley, for the first time in the history of India presented the combined rail and general budget on the first day of February. In the era of uncertainty, India stood as a shining star with the tag of ‘Fastest Growing Economy on the planet’. Industry players were sceptical about India’s growth story after the controversial move of demonetisation. The sudden banning of big notes costed India a dip of 0.6% in its GDP but a large section of people supported the move as some referring it to a ‘Surgical Strike on Black Money’. For the very first time, millions of Indians got the chance to use digital payments platforms. PayTM and the government promoted BHIM is now on the ‘Never to delete’ list in our smartphones. Will FY2017-18 be the beginning of the ‘Achhe Din’? Let’s analyse.

India’s role in the Global Economy

The world economic growth for 2016 at 3.1% was the lowest since the 2008 Financial Crisis. The never ending Middle East war, China’s slowdown, low oil prices, Brexit impacted with major cuts in growth estimates. The situation looks slightly better for upcoming year.

India has become the sixth largest manufacturing nation in the world, rising from the previous ninth position. Recognising the strength of strong economic fundamentals and consumer demand, the impact of demonetisation will gradually fade away. The World Bank expects India’s economy to grow at 7.6% in FY2017-18. Here are the key takeaways from Central Statistic Organisation outlook for FY2017-18.

Retail Inflation - 4% to 4.5% | Fiscal Deficit – 3.2% of India’s GDP | INR - ₹64 to ₹66

Among emerging economies, if there is any growth, that is in India. India is among the few bright spots in the global economy – Christine Lagarde, Chief, IMF

Goods and Service Tax

GST is the most anticipated single indirect tax for the entire country, which aims to make India one unified common market. Important bills related to Central GST, State GST, Inter-state GST and UT-GST are currently under consideration in Rajya Sabha. The four tier GST structure of 5%, 12%, 18%, and 28% is likely to be implemented by July 1, 2017. The bill is hailed by industry experts as it likely to lead to ease of doing business, competitiveness and spurring growth. CBEC GST Mitra helpdesk is well equipped to deal with queries related to GST.

The JAM troika

Jan dhan, Aadhaar and Mobile. These three words changed the way we pay. To ensure last mile reach, government encouraged people all from the sections of the society to open a bank account and use RuPay debit card.  With 40 crore Aadhaar linked accounts, more attention was given to ‘the way we pay’. The game changer move of payments bank was quickly adopted by India Post, PayTM, NSDL and others. India Post Payment Banks has plans to create 1.55 lakh access points in 650 districts across the postal networks through-out India. Payments Bank operating in rural India have herculean task to ensure that Rural Bharat and Urban India is on the same page when it comes to digital payments.

Aadhaar enabled fingerprint payments are more sophisticated than Apple Pay and Samsung Pay as it rules out the need of internet. Fintech experts are cautious about the security concerns in Aadhaar Pay but ‘When there is will, there is a way’.

Digital India – Internet for everyone.

Last year, Kerala became the first state in India to declare internet as basic necessity. Internet is key for last mile delivery of government services in future. Bharat Net, a massive fibre optic cable laying initiative in all village panchayat across India will complete 2 lakh kilometres by the end of FY2017-18. Nearly 500 railway stations in India will enjoy high speed internet services.

The launch of SWAYAM online platform with over 1500 courses and its tie up with DTH channels is a welcome move to take quality education to the masses. The launch along-side Bharat Net will enable students across India to learn new skills and yield institute approved certificates. The IITs and IIMs of this country will now go online, certainly a great initiative for avid learners of India.

Basic healthcare information on a smart Aadhar Card will be the first step as unique health identifier for the country. This will be critical in identifying beneficiaries for social healthcare insurance programs. E-health through Aadhar would substantially save patient’s time during emergencies.

The way we travel

A great start to a great year. Gurgaon Rapid Metro has commenced operations for its 6.6 km phase II. Kochi Metro (25.1 km), Delhi Metro Magenta Line (38 km) and Lucknow Metro (8.4 km) will commence operations in FY2017-18. Construction of all 9 additional lines ie. Line 2 to Line 10 (approx. 160 km) of Mumbai Metro project will begin after monsoons. The metro rail policy will be introduced with the focus on innovative models of implementation, financing, standardisation and indigenization of metro related hardware and software.

India’s semi-speed initiative, the Tejas express is likely to run between Mumbai – Goa, Mumbai – Surat and Delhi – Amritsar in FY2017-18. Indian Railways plan to redevelop 400 railway stations before 2025. Bids for more than 25 stations will be placed by the end of the year. Indian Railways may become the first railway in the world to run solar enabled trains.

Mumbai becomes the first city in India to implement electric buses on a large scale. BEST will run 25 electric hybrid buses made by Tata Motors on BKC route. 2017 will be the founding year for green mobility in India. Governments plans to implement green mobility projects worth Rs. 70,000 crores in upcoming years. This includes 2,000 kms of Bus Rapid Transport Corridors, hybrid buses, cycle & walk tracks, public cycle sharing schemes and intelligent transport solutions.

In bid to revive regional connectivity via air, Ude Desh ka Aam Nagarik (UDAN) scheme will connect to more than 75 small cities under Rs. 2,500. In Phase 1, 43 airports and 5 carriers were selected. It is the largest ever attempt for regional connectivity in the world. The move may attract airline manufacturers to set up plants in India.

Cheers for New India

The world’s fastest growing economy is changing rapidly with the innovative use of technology. The urge to do better and transform the lives of masses fuels the energy for new India. Emerging economies like India are a support system for global economy in the times of slowdown. Cheers for cleaner, greener and better India.

- Chaitanya Kulkarni

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