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India’s Demonetisation decision likely to affect Gold Market in the short term: World Gold Council (WGC) report

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Gold, Wikimedia

Delhi, Jan 13, 2017: India’s demonetisation decision is likely to affect gold demand in the short term, a World Gold Council (WGC) outlook report released on Friday stated.

“In India, the government’s decision to remove large denomination rupee notes took around 86 per cent of India’s circulating cash out of its economy,” according to the Outlook 2017 – Global Economic Trends and their impact on gold, released by WGC.

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“While the purpose is to replace them with newly printed notes, we believe that the liquidity squeeze could have a temporary negative effect on economic growth, and may also affect gold demand in the short term.

“But more importantly, we believe that the transition to transparency and formalisation of the economy will lead to stronger Indian growth in the longer term, thus benefiting gold,” the report added.

The WGC said there are six major trends to be watched out for in 2017 from economic perspective that would impact the gold market.

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The trends are: Heightened political and geopolitical risks; currency depreciation; rising inflation expectations; inflated stock market valuations; long-term Asian growth and opening of new markets. The report said gold is becoming more mainstream. Gold-backed exchange traded funds made gold accessible to millions of investors, primarily in the West, over the past decade, but other markets continue to expand too.”

It said, “China has seen dramatic growth in recent years through gold accumulation plans, physically settled gold contracts in the Shanghai Gold Exchange. In Japan, pension funds have increased their gold holdings over the past few years.”

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In the corporate sector, more than 200 defined-benefit pension funds have invested in gold. In addition, more than 160 defined-contribution plans have added gold to their list of investments.

“We expect this trend to continue and expand into Western markets, where pension funds have had to rethink asset allocation strategies following prolonged exposure to low (and even negative) interest rates. In our view, this will result in structurally higher demand,” the report said.

“Innovation is evident across all markets, but at the end of last year one development stood out. The Accounting and Auditing Organisation of Islamic Financial Institutions (AAOIFI), with support from the World Gold Council, launched the Shari’ah Standard for Gold, opening up the Muslim world to gold investment,” it added. (IANS)

 

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Top Highlights of PM Narendra Modi’s Speech on India’s 71st Independence Day

10 Important points in PM Modi’s speech

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Prime Minister Narendra Modi’s fourth Independence Day speech from Red Fort
Prime Minister Narendra Modi’s fourth Independence Day speech from Red Fort. Twitter
  • We have to take the country ahead with the determination of creating a ‘New India’
  • His government is serious about tackling various national security issues
  • I want to proudly tell people that within just three years, we have recovered black money of Rs 1.25 lakh crore

New Delhi, August 15, 2017: It was Prime Minister Narendra Modi’s fourth Independence Day speech from Red Fort, Delhi. He talked about a variety of issues like GST, demonetisation, terrorism, and triple talaq among others. Here are the top 10 points of Modi’s speech:

  • A New India will be our democracy’s biggest strength

During his speech, Modi expressed that India should create a new India before 2022, the 76th year of Independence. Modi said, “We have to take the country ahead with the determination of creating a ‘New India’. Let us come together to create an India free of corruption, nepotism, casteism, communalism, and terrorism. Let us build a country which is clean, healthy and is self-determined.”

  • From Quit India Movement to a United India Movement

Modi has previously spoken about the Quit India Movement during the monthly address of Mann ki Baat as well as the special session of the Parliament to commemorate the event. During the Independence Day speech, he once again brought back the historic event.

Asking Indians to take inspiration from the 1942 movement, Modi said, “Within five years, the British had left the country because of our unity. We have to take a sankalp of new India and take the country forward.” Remembering the contribution of Mahatma Gandhi in the freedom movement, “There was a Mohandas Karamchand Gandhi once. People with cotton in their hands support Gandhi and eventually, the country got freedom,” he added. He said on the Independence Day that the need of today’s India is Bharat Jodo, a united India.

  • 2018: A crucial year for India

Modi put special emphasis on January 1, 2018, telling Indians that 2018 will be the year that will mark the coming of age of a whole generation, the generation which will steer India forward.

1 January 2018 will not be an ordinary day. “The people who were born in the 21st century will find that this date will decide a lot in their lives. I welcome all the youths who will turn 18 in 2018. Now, you are getting an opportunity to be a part of the force which develops India,” said the prime minister. He called them the Bhagya Vidhatas’ of our country

  • Surgical Strikes and National Security

Modi hailed the surgical strikes (29 November 2016) on the Independence Day and stressed upon the fact that his government is serious about tackling various national security issues. He said, “After the surgical strike, the entire world had to acknowledge India’s strength.” The concern for national security is a natural one in an independent India. Our armed forces always showed their capabilities in handling both terrorism and during the war.

Also Read: PM Narendra Modi Condemns Religious Violence on 71st Indian Independence Day, Warns “Will Not Accept Violence In The Name Of Faith”

  • Breakthrough measures of Modi government

Modi said that people are celebrating a Mahotsav of honesty today. His government implemented various praise-worthy measures like One Rank One Pension, GST, and demonetisation.

Talking about his government’s commitment to armed forces, Modi said, “For 30 or 40 years, the matter of One Rank One Pension was stuck. But our government took steps to fulfill the demand of our security personnel.” He said that GST gave the nation a new direction to competitive federalism and that GST was rolled so fast across the country, all thanks to technology. He said, “After GST enrollment, our truck drivers save 30 percent of their time in travel now.”

PM Modi spoke on demonetisation, “Today, I want to proudly tell people that within just three years, we have recovered black money of Rs 1.25 lakh crore.” Through Note ban, the black money came out. It was their endeavor to recover black money and then to make it a constructive part of the economy. Demonetisation proved to be a successful move against corruption. “The businessmen with black money used to run shell companies. After demonetisation, three lakh shell companies were found. And out of that, we canceled the registration of 1.75 lakh companies,” said the prime minister.

On development measures, he said, “Today, roads and railway tracks are being constructed twice as fast. Today, over 14,000 villages have got electricity. 29 crore people have got bank accounts now.”

  • Modi opposes Triple Talaq

His government supports the movement against Triple Talaq and India will also support Muslim women in their struggle. “I believe India will fully support the women in their struggle. The women of this country created a revolution against Triple Talaq. There was an atmosphere against Triple Talaq in the country with even the media supporting the women,” he said.

  • Gorakhpur tragedy

The prime minister was being criticized for not speaking on the Gorakhpur hospital tragedy which has killed over 70 children so far. But, Modi broke his silence today. He said, “In the last few days, some of our innocent children died in a hospital. All the countrymen stand together at this time.”

  • Militancy in Kashmir

On Independence Day, taking a peacemaking approach towards Kashmiris, Modi expressed his opinion that the Kashmir issue can be solved only through peaceful means.  He said, Na gaali se samasya sulajhne wali hai, na goli se, samasya suljhegi har Kashmiri ko gale lagane se (Kashmir problem can’t be resolved by either bullet’s or by abuses. It can be resolved only by embracing all Kashmiris).

He promised to bring prosperity to the militancy-infested state. “The development of Jammu and Kashmir is also a commitment of the people and the government there,” said Modi.

  • No leniency for terrorism

Prime Minister spoke of involving common Kashmiris in India’s growth story but took a tough stance on militancy. “A lot happens in Kashmir. A lot of claims have been made. A lot of people abuse each other. There are a lot of separatists. But there will be no leniency for terrorism. I have told many to become a part of democracy,” said the prime minister.

  • Communalism and Casteism are poison for the country

Modi said that violence in the name of faith is not acceptable and described casteism and communalism as poison for the country. The comments assume importance in the backdrop of various incidents of lynching by cow vigilantes. He said that issues like communalism and casteism can’t benefit the country in any way. “Therefore, violence cannot be emphasized in the name of faith,” Modi said.

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Economic Survey 2016-17 : Arun Jaitley Says Significant Decline in India’s Reliance on Cash

Economic Survey is a snapshot of the state the country is in

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Economic survey presents a state of the country
The Economic Survey 2016-17 was charted by Finance Minister Jaitley on August 11 (representational image) Wikimedia
  • Finance Minister Jaitley tabled the second volume of Economic Survey 2016-17 in both Houses of Parliament
  • Second volume to be presented by Chief Economic Adviser Arvind Subramanian and his team

New Delhi, August 12, 2017: The last day of the Monsoon session of the Parliament saw the Indian Finance Minister Arun Jaitley table the second part of Economic Survey 2016-2017.

The survey revealed that a sharp, however balanced decline has been observed in the use of cash after Prime Minister Narendra Modi heralded the demonetization move in November last year. This trend has been observed both, in levels, and as a share of GDP and money.

Before assessing whether the move was a success or a failure, we must first identify what were the objectives behind stalling Rs. 500 and Rs. 1,000 notes,

  • Immediate objective – flush out large amounts of black money that were hoarded in cash at the moment
  • Long term objective – transform the cash-based Indian economy into a digital economy

It was assumed that these objectives would make India an efficient economy with higher tax revenues.

Before the introduction of demonetization, India heavily relied on cash, which in turn led to an unhealthy cash-to-GDP ratio (12 percent) – a trend that was only worsening with time.

The finance minister presented the second volume of Economic Survey 2016-17 in both the houses of the Parliament with demonetization being discussed for a significant part. The following has been revealed in an attempt to gauge the outcome of the move,

  • At present, total cash in holding is Rs. 3.5 lakh crore. This figure is 20 percent less than what it would have been had the economy not been demonetized.
  • Cash as a share of GDP has also witnessed a decline by 1.6 percentage points. Previously it was 11.3 percent of GDP and now stands at 9.7 GDP.
  • Cash as a share of M1 which economically represents liquid portions of money supply, has also declined by five percentage points.

To ease understanding of everybody from a non-economic background, these trends indicate a significant reduction in Indian economy’s reliance on cash since November 2016.

Another bonus point is the huge amount of cash that was previously lying dormant with people and has now entered the banking system.

ALSO READ: Indian Government’s Demonetisation measures did not impede Future Black Money Flows: UN report

When talking about the long term objective of the move- digitalization, a significant movement can be observed across all sectors :

  • The affluent segment of the society has increasingly shifted to mobile banking, online transactions, and app-based banking solutions
  • The middle segment are using their debit and credit cards
  • People from the less affluent segment are slowly joining the digital economy with their Jan Dhan accounts and RuPay cards
  • Pensioners who were previously only undertaking transactions in cash are now being encouraged to use card-based techniques.
  • Farmers, who comprise a significant part of the Indian economy, are also being encouraged to issue and use Kisan credit cards.

The Indian banking sector is not only promoting the issuance of debit and credit cards but also their use.

The question that comes to mind here is, was demonetization successful? 

It would be wrong to say that the economy has completely transformed into a digital economy as many people have shifted back to cash. However, digital transactions are higher than pre-demonetization levels, and the overall movement is in the positive direction.

The Indian economy can thus, be rightly considered on the path to a holistic digital economy as the Economic Survey 2016-2017 notes “surge has moderated but the level and pace of digitalization are still substantially greater than before demonetization.”

However, while there is proof that the reliance on cash has declined sharply, it has also been pointed out in the survey that a “definitive judgments can only be passed if current levels of cash relative to GDP persist over time but so far”.


 
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Raja Chari: Indian American Astronaut chosen by NASA

Raja Chari, an American of Indian descent, has been chosen by NASA as one of the 12 astronauts for a new space mission.

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Raja Chari. Twitter.
  • Raja Chari is an American of Indian descent chosen by NASA for the new batch of astronauts
  • Currently, he is a Lieutenant Colonel in the US Air Force
  • Chari will have to go through two years of astronaut training which begins in August

June 06, 2017: NASA has chosen 12 astronauts out of a record-breaking 18,300 applications for upcoming space missions. An American of Indian descent, Raja Chari, has successfully earned his spot in the top 12.

The astronauts were selected on the basis of expertise, education, and physical tests. This batch of 12 astronauts is the largest group selected by NASA since two decades. The group consisting of 7 men and 5 women surpassed the minimum requirements of NASA.

Born in Waterloo, Iowa, Chari graduated from Air Force Academy in 1999 with a bachelor’s degree in Astronautical Engineering and Engineering Science. He went on to complete his master’s in Aeronautics and Astronautics from Massachusetts Institute of Technology. The astronaut is also a graduate of US Naval Test Pilot School.

Currently, Raja Chari is a Lieutenant Colonel in the US Air Force. He is the commander of 461st Flight Test Squadron and director of the F-35 Integrated Test Force at Edwards Air Force Base in California.

After Late Kalpana Chawla, Lt. Col. Raja Chari is the second Indian American astronaut chosen by NASA.

The 12 astronauts will have to go through two years of training. Upon completion, they will be assigned their missions ranging from research at the International Space Station, launching from American soil on spacecraft by private companies, to flying on deep space missions on NASA’s Orion Spacecraft.

The US Vice-President Mike Pence visited the Johnson Space Centre in Houston to announce and congratulate the new batch. Pence also said that President Trump is “fully committed” to NASA’s missions in space.

by Saksham Narula of NewsGram. Twitter: @Saksham2393