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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.

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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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Cleaning of Ganga is not impossible, but it is very difficult.

The holy river is also one of the most polluted river

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Ganga in Haridwar
A pile of garbage lies on the riverbank along the Ganges riverfront known as "Har ki Pauri," the most sacred spot in the Hindu holy town of Haridwar where devotees throng. VOA

– Saket Suman

About five years ago, when Financial Times journalist and author Victor Mallet began living in Delhi, he was shocked to discover that the Yamuna — “this beautiful river of Indian legend and art” — was chocked with untreated sewage and industrial waste after it had passed through the city on its way to Mathura, Agra and on to join the Ganga at Allahabad He wondered “how a river so sacred to so many Indians could also be so polluted and neglected” and then set out to record the plight of the Ganga.

His exhaustive journey led him to various key locations on the river, including its source at Gaumukh and Sagar Island and the Sunderbans at its mouth in the Bay of Bengal. This culminated in the publication of “River of Life, River of Death” (Oxford University Press/Rs 550/316 pages).

“My conclusion is that it is not impossible (to clean the Ganga) — but it is very difficult. Narendra Modi is the latest of several Indian prime ministers to announce plans to rescue the Ganga — in fact, I would say he has been the most fervent — but like his predecessors, he has struggled to implement these plans despite the availability of funds from India itself and from international donors such as the World Bank and Japan.

“Clearly, the Ganga has enormous problems of physical pollution from sewage, industrial toxins and pesticide run-off. Too much of the water is diverted for irrigation in the dry season, which can leave parts of the river without water before the monsoon. But with political will and public support — I don’t think anyone in India objects to saving the river — it can be done,” Mallet told IANS in an email interview from Hong Kong.

The important thing, he maintained, is to change mindsets and he noted in this context that it is quite common among devout Hindus to say: “Ma Ganga is so spiritually pure that nothing we throw in the river will sully her or make a difference.”

The author said that sensible holy men and environmentalists who care for the Ganga term this as nonsense — and the reason it’s not true is that the Ganga’s very spiritual power arises from its physical properties as a life-giver, as a provider of water and fertility.

“That’s why rivers have always been worshipped in ancient times, including in England. So if you destroy the river’s life-giving qualities through pollution, you destroy the source of her spiritual importance,” he added.

In the book, he also states that it is not impossible to clean the Ganges, “as river clean-ups in Europe and America have shown”.

Elaborating on this, he said: “When I was a child living in London, my mother always told me not to fall in the Thames because the river was so filthy that if I fell in I would have to go to hospital and have my stomach pumped! Yet today the Thames is clean — muddy, but virtually free of industrial pollution and untreated sewage — because successive governments and water and sanitation companies have stopped the pollution.

“The same is true of the Rhine in continental Europe and the Chicago river in the United States. The great thing about rivers is that you don’t have to scrub them clean — you just have to stop polluting them and the natural flow of the river does the rest.”

Mallet maintained that the record on the Ganga has so far been disappointing in terms of implementation, but hoped that there will be a change now that there is a new minister in charge.

“If you clean the Ganga by improving sanitation, you not only save the goddess, you also create thousands of jobs in infrastructure development, and save the lives of thousands of children who die each year because of bad water, poor hygiene and stomach bugs. Likewise, if India curbs its greenhouse gases — and this seems to be happening anyway because alternative energy such as solar power is now very competitive on price — then that will also help it to reduce the kind of air pollution that has recently been afflicting Delhi and the whole of North India,” he maintained.

Mallet went on to add that he learnt a lot about the mythology and the history of the river — and the history of India — in the course of his research for the book.

“In a way, India is so rich in civilisations and stories that you can never say you have completed your work as a researcher and writer. You can at least make a start, and also explain the contemporary political, social, religious and environmental issues that affect the river and the country as a whole,” Mallet said. (IANS)

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Will India be able to travel in the Bullet Train Soon? Yes, Say Railway Officials; Indian Railways Target Completing the Project Before the August 2022 Deadline

The foundation stone for the Rs 1.08 lakh crore ($17 billion) 508-km Ahmedabad-Mumbai Bullet Train was laid in Ahmedabad by Modi and his Japanese counterpart Shinzo Abe on September 14

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Bullet Train
Railway Board Chairman held a high-level meeting in Rail Bhavan last Thursday which was attended by Japanese Ambassador Kenji Hiramatsu, and Niti Aayog Vice Chairman. (representative image) Wikimedia

New Delhi, November 10, 2017 : Unfazed by opposition criticism, Indian Railways is working overtime to push ahead with the much-talked about the “Bullet Train” project, aiming to complete it ahead of the August 2022 deadline set by Prime Minister Narendra Modi.

Railway Board Chairman Ashwani Lohani, who has a reputation of a turnaround man, has taken up the task of monitoring and chairing the periodic review meetings of the project that is estimated to cost over Rs 1 lakh crore ($15 billion).

Lohani held a high-level meeting in Rail Bhavan last Thursday which was attended by Japanese Ambassador Kenji Hiramatsu, Niti Aayog Vice Chairman Rajiv Kumar, Central government officials, Principal Secretary-rank officials of Gujarat and Maharashtra, officials of NHSRCL (National High Speed Rail Corporation Limited), officials of Japan International Cooperation Agency (JICA) and the General Manager of Western Railway.

A senior railway board member, requesting anonymity, told IANS, “The railways is in no mood to delay the Mumbai-Ahmedabad Bullet Train project. Lohani will now hold a review meeting once every three months… And even on weekly basis, if required.”

Emphasising on the government’s intention, the official said, “The attendance of the Niti Aayog Vice Chairman, the Japanese Ambassador and the CRB in the review meeting is a clear signal that the government is taking the project seriously and there is no scope for any delay.”

“The CRB wants Indian Railway officials to take lessons from their Japanese counterparts about meeting deadlines,” he said.

The opposition has attacked the government for taking up a project at a huge cost instead of focusing on safety, a dire need of the time, and on schemes to improve passenger amenities.

The official said it was also decided at the meeting that “a road map for consultancy and civil engineering works will be prepared by January 2018”.

A ministry official associated with the Bullet Train project said a report on the signalling system and electrical reports would be ready by April 2018. According to him, the tracks and most of the signalling system would be brought from Japan.

The foundation stone for the Rs 1.08 lakh crore ($17 billion) 508-km Ahmedabad-Mumbai Bullet Train was laid in Ahmedabad by Modi and his Japanese counterpart Shinzo Abe on September 14.

Of the Rs 1.08 lakh crore, Japan is giving a loan of Rs 88,000 crore at a minimal interest of 0.1 per cent for 50 years. And the repayment will begin only after 15 years.

The railway official said that to encourage the Prime Minister’s ambitious ‘Make in India’ programme, “an appeal will be made to Indian and Japanese companies to make use the opportunity to work together”.

Meanwhile, the officials of the government of Maharashtra and Gujarat assured the railways of their help in land acquisition and smooth shifting of raw materials to construction venues.

A three-level monitoring committee was also constituted, including the Vice Chairman of Niti Ayog and Special Advisor to Japanese Prime Minister.

A working group led by Managing Director of NHSRCL Achal Khare and consisting of representatives of the ministries concerned, and the representative of JICA, has been formed. Besides the two committees, a technical expert committee led by the Managing Director of NHSRCL has also been formed.

Of the 508 km stretch, 92 per cent (468 km) of the route will be elevated, six per cent (27 km) will be in tunnels and the remaining two per cent (13 km) will be on the ground .

The high-speed train would also pass through the country’s longest tunnel of 21 km, of which seven km will be under the sea.

Twelve stations have been proposed that include Mumbai, Thane, Virar, Boisar, Vapi, Bilimora, Surat, Bharuch, Vadodara, Anand, Ahmedabad and Sabarmati.

The distance will be covered in two hours and seven minutes if the train stops at four stations — Ahmedabad, Vadodara, Surat and Mumbai. If the train stops at all 12 stations, it will cover the distance in two hours and fifty-eight minutes.

According to Railway Ministry officials, the operating speed of the bullet train would be 320 kmph and the maximum speed would be 350 kmph.

 

(Editorial note : This article has been written by Anand K. Singh and was first published by IANS. Anand can be contacted at can be contacted at anand.s@ians.in)

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Demonetisation Anniversary: BJP acts cheeky, releases new video showing Frustration of ‘Corrupt’ Politicians following Demonetisation

The one-minute video, which is now going viral on social media, has already been re-tweeted more than 2 thousand times since it was released on November 7, on the eve of demonetization move.

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Demonetisation Anniversary
Screen grab of the sarcastic video released by BJP to mark Demonetisation Anniversary. Twitter

New Delhi, November 8, 2017 : On November 8 2016, every Indian citizen sat glued to their TV screens as Narendra Modi was set to make a big announcement. Outcome? The Indian Prime Minster shocked the entire nation with the introduction of Demonetisation, a move that was to change the very foundation of the cash-dependent Indian economy.

The much-debated move by Modi garnered the attention of several well-versed economists from the country and abroad, alike. While some people willingly welcomed the move, there were others who stood in staunch criticism.

As the move completes its first year, the Bharatiya Janata Party (BJP) is set to observe November 8 as ‘anti-black money day’ to celebrate Demonetisation anniversary in the country.

On the eve of the Demonetisation anniversary, the BJP released a cheeky video claiming to depict how ‘corrupt’ politicians have been criticizing the move, as the nation won following demonetisation.

WATCH BJP’S TONGUE-IN-CHEEK VIDEO

In the video, the BJP attempted to take a dig at corrupt politicians, who have been criticizing PM Modi’s Demonetisation move.

In the video, a woman, playing the character of a frustrated, corrupt politician can be seen going on a rant over PM Modi’s note ban initiative, which was aimed to combat black money, corruption, fake currency and terrorism.

The video ends with a voice-over saying demonetisation has not only brought out this frustration of corrupt citizens, but also black-money, claiming that almost 99 per cent cash which was previously lying hidden with people has now entered the banking system.

The one-minute video, which is now going viral on social media, has already been re-tweeted more than 2 thousand times since it was released on November 7, on the eve of demonetization move.

Ahead of the Demonetisation anniversary, the last few days have witnessed several leaders present their opinions on PM Modi’s demonetization move.

Finance Minister Arun Jaitley called PM Modi’s note ban initiative a ‘watershed moment’ while Piyush Goyal, Minister of Railways believes the move has pushed India towards a more transparent economy.

However, the move is being criticized by ex-Prime Minister Manmohan Singh calling it ‘irresponsible’. The opposition maintains that PM Modi’s note ban initiative has caused reckless damage to the country and the Indian economy.

On Demonetisation anniversary, the BJP is set to observe November 8 as ‘anti-black money day’, while opposition leaders are set to observe the day as ‘black day’ in protest against the note ban initiative.