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Fear Of Economic Volatility Raises as RBI Governor Decides To Resign

There has been widespread speculation that Rajan quit because of what some termed as “discouraging signals” from the government.

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Image Source: Financial Express
  • India is now the world’s fastest-growing major economy
  • Raghuram Rajan helped stabilize India’s currency when the rupee was plunging and inflation was raging
  • Praising Rajan’s contribution, Finance Minister Arun Jaitley expressed confidence his successor will be a “good person”

The Indian Central Bank governor’s decision not to seek a second term in office has raised concerns the country could face a loss in investor confidence and economic volatility. The widely-respected economist, Raghuram Rajan, is credited with making an important contribution to India’s economic turnaround after a choppy phase.In a signal of uncertainty looming ahead of his departure in September, the rupee fell to a one-month low Monday.

Rajan’s departure: not a big surprise

Rajan’s weekend announcement to quit came after weeks of speculation on whether the government will renew his tenure as head of the Reserve Bank of India (RBI). In a letter to his staff, Rajan said he had been open to staying on to see through the reforms he had begun, but that “on due reflection and after consultation with the government,” he was returning to his “ultimate home in the realm of ideas.”

Widely feted as one of the world’s best Central Bank governors, the former International Monetary Bank economist helped stabilize India’s currency when the rupee was plunging and inflation was raging. As growth momentum returned, the country regained credibility among international investors, who had turned their back on emerging economies.

India’s economy is soaring

While countries like Brazil and Russia continue to face hard times, India is now the world’s fastest-growing major economy.

Finance Minister Arun Jaitley sought to calm investors Monday telling a television network “the country’s economy is driven by strong fundamental factors.” Praising Rajan’s contribution, he expressed confidence his successor will be a “good person.”

Finance Minister Arun Jaitley speaks to RBI Governor Raghuram Rajan during a convocation ceremony for students at a university in Mumbai on January 9, 2015 Image Source: NDTV Profit

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Symbol of stability

The head of emerging market economics at JP Morgan, Jahangir Aziz, stressed that Rajan was a symbol of stability for many investors. “They have invested on the fact that India has managed to put together a reasonably strong story of macro-economic stability. Many of them associate that in part to the Reserve Bank of India, Raghuram Rajan.”

Aziz said investors will watch to see whom the government appoints as Rajan’s successor and would like to see continuity in policies. “The need of the hour is to calm down market nerves,” he says.

There has been widespread speculation that Rajan quit because of what some termed as “discouraging signals” from the government.

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There was criticism of Rajan

Rajan was not without his critics, who said his refusal to slash interest rates, and a clean-up of bad loans he was pushing at state-owned banks, were choking private investment. The most vocal attack came from a member of the ruling Bharatiya Janata Party, Subramaniam Swamy, who raised eyebrows with his comment that Rajan was “mentally not fully Indian” and complained that he had not acted to ease the heavy debt burden of many Indian companies.

Although India’s economy is growing at over 7 percent and has overtaken China as the world’s fastest growing economy, Rajan has repeatedly cautioned that India’s economic recovery still rests on fragile foundations.

Economist Rajiv Kumar at New Delhi’s Center for Policy Research said fears about the impact of Rajan’s exit could be overblown and pointed out that stock markets did not tank Monday as many had feared. “It’s institutions that matter, and the RBI has known to be a very competent institution with huge inherent strengths,” says Kumar.

Meanwhile, the government ushered in more economic reforms Monday, announcing sweeping changes to rules on foreign direct investment by opening up its defense and civil aviation sectors to complete outside ownership, and loosening some restrictions on the pharmaceutical and retail sectors.(Source :VOA)

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New Rs 200 notes: It may take ATMs three months to dispense Rs 200

Will all the 2.25 lakh ATM machines across India would be recalibrated?

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Wait for 3 more months as ATM recalibration is not yet done
Wait for 3 more months as ATM recalibration is not yet done. Wikimeida
  • Reserve Bank of India (RBI) did issue a statement saying that the supply of the new Rs 200 notes would soon be ramped up
  • The entire process of recalibration can be completed within 90 days without affecting the regular functionality of ATMs to a large extent
  • The ATM companies said that they were expecting to receive official communication on recalibration of ATMs soon
New Delhi, September 4, 2017: While the RBI launched the new Rs 200 notes a week ago, it may take up to three months for ATMs to start dispensing the new denomination currency “new Rs 200 note” as it will involve a huge exercise of recalibration.

What are ATM companies saying about when will the new Rs 200 notes come into the market?

Some banks have even asked the ATM companies to begin testing the new Rs 200 notes for recalibration of the machines, though they have not got supplies of the new Rs 200 notes/ currency. Only last year, the banks were involved in the recalibration of ATM machines after the demonetization of high-value currency notes in November.
ATM manufacturing companies said that they have not received any directive from the RBI regarding the recalibration of ATMs for the new Rs 200 note. They disclosed that some banks have at an informal level have asked them to start testing of the new note since it is of a different size.

 

When will the supply of the new Rs 200 notes see an increase?

Reserve Bank of India (RBI) did issue a statement saying that the supply of the new Rs 200 notes would soon be ramped up but has not given any time-frame by which it will be available in adequate numbers.

 It is yet to be seen whether all the 2.25 lakh ATM machines across India would be recalibrated for dispensing the new Rs 200 notes.

 

 avi B Goyal, Chairman, and Managing Director, AGS Transact Technologies Limited, which claims to have an installed base of 60,000 ATMs, told IANS, “The process of recalibration will begin once we receive the directive from the RBI. The size of the new Rs 200 notes are different from the existing ones and so, once we receive the new Rs 200 notes, we will have to understand its dimensions and accordingly reconfigure the ATM cassettes. Next, we will have to check if the supply of new Rs 200 notes is good enough to run the cassettes at full capacity.”

 “The entire process of recalibration can be completed within 90 days without affecting the regular functionality of ATMs to a large extent. In fact, the ATMs will continue to be fully operational during recalibration and will continue to supply Rs 100, Rs 500 and Rs 2,000 denominations,” he said.

 

Among the other companies operating in the sector are NCR Corporation, which has over 1,08,000 machines, and BTI Payments, which has 4,500 cash dispensers. NCR Corporation said that while some banks have reached out to them to start testing of the new Rs 200 notes, they were yet to receive the supply to begin the process.

 “Banks have started getting in touch with us for testing the same “new Rs 200 notes”. They will let us know which machines they wish to configure for new rs 200 notes, which will require physical visits to ATMs. However, the new Rs 200 notes are still to be provided to us by the respective banks so that the testing can begin,” Anand Garollu, General Manager (Services), NCR Corporation said.

K. Srinivas, Managing Director, and CEO of BTI Payments, a RBI-licensed firm that operates cash dispensers not owned and managed by banks, said, “Recalibration will begin as and when we receive adequate quantity of new Rs 200 notes. We are looking to roll this out as quickly as possible.”

 He said that the industry was expecting new Rs 200 notes to be available over a period of time across various geographies.

 “The recalibration can be done progressively as and when the new denomination note starts to become available. Unlike the last time around (during demonetization), when we had to recalibrate all machines in one go,” Srinivas added.

 The ATM companies said that they were expecting to receive official communication on recalibration of ATMs soon. However, emails to RBI in this regard did not elicit any reply, they said.

 “The production of these “new Rs 200 notes” is being ramped up by the currency printing presses and over time, as more notes are printed, it will be distributed across the country through the banking channels and will be available for the public in adequate quantity,” the RBI had said in a statement.

 Currently, new Rs 200 notes are available only through select RBI offices and some banks.

While State Bank of India and Punjab National Bank are reported to have received the new Rs 200 notes, Eknath Baliga, Manager, KYC-Antimoney Laundering Cell, Corporation Bank, Mangalore, told IANS that none of its branches across the country had received the new Rs 200 notes so far.

The new Rs 200 notes are currently being printed only by RBI presses. Security Printing and Minting Corporation of India (SPMCIL) sources told IANS that the company has not received any indent so far for the printing of new Rs 200 notes. India’s two currency presses are owned by RBI and two by SPMCIL, which is a government-owned company.

 How ATM recalibration happens:

Usually, an ATM holds four cassettes — three of which can continue to be used for Rs 100, Rs 500, Rs 2,000, and the fourth cassette can be used for the new Rs 200 notes. On an average, each cassette has a capacity to hold 2,000-2,500 notes depending upon the quality of cash issued by banks. However, there are many ATMs that only have either two or three cassettes.

The number of slots in the ATM can be configured as per the bank’s preference. The banks decide which denomination needs to be configured in a machine on the basis of the customer profile in the area where the ATM is located and the number of transactions on that machine.

The banks need to make requisite changes at their ATM switch before the rollout of the physical recalibration at the ATMs in the field.

The recalibration of a new denomination takes 30-45 minutes per ATM. The process of recalibration is not very difficult but is time-consuming given an engineer has to visit every ATM and configure it to dispense the requisite denomination.

The introduction of the Rs 200 note has been welcomed as it would ease the currency circulation in the market as people prefer lower denomination cash withdrawals from ATMs. Rs 200 would also be more convenient for rural consumers. (IANS)

 

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David Frawley Highlights PM Modi’s Respect for Indian Culture which Pandit Nehru nearly Gave Away to the Marxists

"Delhi elite, which though located in India, kept their minds residing outside the country."

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PM Modi and Indian Culture
David Frawley is the Director of American Institute of Vedic Studies. Wikimedia
  • Nehru had affinity with Communists and Marxists
  • Politically independent India continued to be dependent on the west for intellectual progress
  • Nehru and his followers rejected India’s past and envisioned a different nation away from its important culture

August 22, 2017: India’s culture has been its representative in the global arena. The cultural background of the country can be traced back to thousands of years. The Vedas, written thousands of years ago, still dictate our lifestyle and thoughts.

But this remarkable cultural heritage was infused with Marxism and Communism by India’s leftist leaders. David Frawley, in his recent article, traces the impact of leadership on Indian traditional culture.

But, Pandit Vamadeva Shastri also known as David Frawley- the Director of American Institute of Vedic Studies observes how the exclusive Indian culture was outsourced to the left by Pandit Nehru. “Congress outsourced education and cultural development to the far left, Marxists and Communists, with which Nehru had much affinity,” says Frawley in his website vedanet.com. Nehru was vocal about his different idea of the country that goes away from its genuine culture. Nehru, along with his followers, rejected the Indian past.

Also Read: Padma Bhushan David Frawley points out Christian Missionaries’ assault on Hindu Dharma

Although the country had become politically independent, the intellectual progress continued to be dependent on the west, courtesy of the “Delhi elite, which though located in India, kept their minds residing outside the country.” Traditional Indian culture was criticized by these very people.

Indira Gandhi cannot be said to have continued this trend, but she too “supported the same westernized elite for whom Indian civilization was a dangerous myth to be eliminated for modern progress,” writes David Frawley.

Dr. Frawley also highlights that the influence of Marxism on Indian education was known to very few people in the West. Additionally, the West was also unaware of the socialist stand of the Indian economy.

It was the RSS through the expression of BJP that sought to retain Indian values and culture. But the efforts proved futile as it was perceived backward and antique to stick to Indian cultures. As David Frawley rightly observes, “Much of this was owing to Marxist propaganda that has always demonized its opponents, which the Congress dominated media gladly followed.”

There was hope in 1999 when BJP took the power through PM Vajpayee, but not much changed in the mindset of the nation. Rather, “India fell back into the old leftist rule with a vengeance and a massive corruption and nepotism under the UPA in 2004 that continued for ten years,” notes Dr. Frawley.

The 2014 elections saw the formation of Modi government in India. India’s new leader, Narendra Modi, came to national politics with “the power of vision, personal charisma, a forward development agenda and tremendous work to usher in a new India.”

Modi envisions a technologically advanced India through older Indian ethos. The PM plans on introducing “social media, cashless society, smart cities and a radically improved infrastructure.”

David Frawley acknowledges Modi’s love for Indian traditions. The PM has come up with a lot of programs to help the poor masses of the country. “He is not afraid to be a Hindu or to attend Hindu functions, while at the same time excelling as a modern technocrat,” explores David Frawley.

Modi’s beliefs in Hinduism are not confined to sectarian thoughts, rather, a broad spiritual pursuit of “Yoga, meditation, universal consciousness, and self-realization.”

David Frawley believes that humanity can be inspired through a renovated and revitalized India. The Nehruvian idea of India is slowly dying as PM Modi builds a competitive India in sync with its traditions.

– prepared by Saksham Narula of NewsGram. Twitter @Saksham2394


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Rankings of Aam Aadmi Party Delhi MLAs Drop due to Poor Performance. Praja Foundation publishes Latest Government Performance Report

This year, the performance of BJP MLAs in Delhi was better than AAP

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Praja Foundation
AAP Legislator's performance are going down in quality. Wikimedia
  • Praja Foundation assesses the performance of the government every year
  • The government performance for AAP has revealed the reality of the situation in Delhi this year, as per report released on Aug 22, 2017
  • The AAP legislators ranking has gone down while BJP members have improved from last year

August 23, 2017: The Praja Foundation, which gives a performance report of the government every year, presented a detailed report of the performance of the Delhi government in the year 2017.

The Praja Foundation had reported on the performance of the Delhi government last year even when there was a lot of attacks on the party. This year too it has issued ranking based on the performance of the legislators.

Also Read: Birthday Song for Arvind Kejriwal: A Special Troll and Parody by AAP’s Ex Minister Kapil Mishra

The Highlights from the Report released on Aug 22, 2017:

– The quality of the work of the MLAs from AAP has drastically dropped down.

– Criminal legislators increased, more than half the legislators are tainted. The number of criminal legislators is now 39 (56 percent). Last year, this number was 14.

– Surprisingly, it is not only lawsuits but also charge sheet that has been filed against 25 of the 70 MLAs.

– In 2016 sessions, BJP legislator Vijender Gupta asked 98 questions for the most. After that, the second was also the name of Jagdish Pradhan of BJP. He asked a total of 81 questions. At the third place was AAP minister Alka Lamba who asked 49 questions. Compared to last year, AAP asked fewer questions this year.

– This year, the performance of BJP MLAs was better than AAP. 7 MLAs of Aam Aadmi Party did not ask a single question in the 2017 session. While two legislators Raghubinder Shukin and Mo Ishrak did not ask a single question in 2016 and 2017.

– Record number of complaints in Delhi Jal Board (DJB): It is not that complaints did not come. In 2016, the highest number of complaints were related to waterboard (Jal Board). There were 2,27,444 water complaints. Only 40 questions related to water were asked. After that, the PWD department received the most complaints. 19,152 complaints were of the drain, sewer drainage, while only 5 questions were asked. In 2016, there were 11,099 complaints related to mosquitoes and fogs. At the same time, the question was asked just 2 times.

– With the functioning of the legislators, the opinion of the people of Delhi was also asked and on the same basis, the MLAs were given the rank. It was told that the Hansa agency from 24,000 people of Delhi asked questions and got ranking on the functioning of the legislators. On the basis of work and public opinion, the Aam Aadmi Party MLAs were given the rank.

– AAP’s Mohinder Goyal was elected the best legislator. He got the first place as out of 100, he got 75.4.

– Who were the bad performers? Ram Pahalwan got the lowest at just 27.26 while Rituraj Govind was second and Dinesh Mohania was third.

– Prepared by Saksham Narula of NewsGram. Twitter: @Saksham2394