YEAH, GST and Demo were really bad
- Thread starter pothead
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Nilgiri
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By targetting and cherry picking only the perceived negatives (which are largely removed from popular sentiment to begin with), the opposition parties are making the job lot easier for BJP politically....because the upcoming and inevitable massive uptick (be they connected or not to the reforms directly) gets full BJP ownership by the public now.
Political atmosphere in India is a very inept one tbh. No one wants to give credit where credit is due and focus precisely on the criticisms. If it takes BJP to create clean slate politically where better grounded paradigms (based on merit and logic rather than identity politics and emotion) can emerge over time, so be it.
kadamba-warrior
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I don't think that the economy is doing bad but what worries me is that BJP, despite biting the bullet on multiple occasions for doing what is right rather than what is popular, is losing the perception battle. Or so it appears.
First, the Gandhi clan, who authorized generous loan grants to Mallya in a clear case of quid pro quo, are going to town about how BJP let him escape and trying to paint BJP as the guilty party. I haven't even heard enough from BJP to even clarify who is at fault for granting him the loans in the first place.
But more importantly, I think BJP lost the plot in 2014 itself by not going hard after the corrupt UPA ministers who already had an established rap sheet. Now, not only do the BJP have not much significant to show for their fight against corruption, but they have also conceded a clean chit to UPA by their sheer inaction.
In the end, perception is all that matters and it would appear that UPA had done nothing wrong - judging simply by the lack of prosecution for any of their corruption scandals.
GodToons
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My 2 cents here:
1. In 2004, it was middle class which deserted BJP. Modi has charted new territory using Ujjawala, defecation removal, electricity and jan-dhan. UP was example where BJP got lots of rural seats.
2. BJP lagging in perception battle is due to: coming together of AAP, cOngress, Pak, Left social media player + media to create narrative.
3. GST: talk to any businessman, except for those who deals mostly in kaccha, everybody is happy since they have to deal with 1 tax instead of many. Having said that, existing process is bit hassle but should be ironed out in quarter or 2.
4. Congress has created very robust support system across every where, we can see this dalit atrocity, muslim atrocity story, award vapsi. It will take time, even Judiciary is part of this support system
5. Economically, BJP has not done enough to remove red tape. They do not have enough experience in government. take example, Arun Jeitly, most experienced minister, had just 4 years of governance experience before 2014.
6. Middle class will not vote against Modi, to whom - Rahul/ Kejriwal/ Lalu/ Mamta/ Akhilesh?. At best they will not go to vote or press NOTA.
kadamba-warrior
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There in lies the problem.
Congress and other parties have a CAPTIVE votebank which can walk a hundred miles to vote if asked to vote after a Friday sermon (it doesn't matter whether that vote is for performance or personal benefits). And they make up close to 30% of the total electorate.
Significant percentage of the traditional voters of BJP are too indifferent and can't be bothered to go out and vote - let alone going back to their home towns to vote. Unless voting is made mandatory or is tied to benefits, I don't see any improvement in Indian political scene.
duhastmish
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Current account defeciet from 2013 to 2014
-4.3 to -1.7 by upa
2016 to 2017 by bjp
1.3 to 1.1
Forex growth is not worthy because of world recession but still comendable 100 billion in 3 years meaning 33 bill in One yr average compared to 2013 to 2014 growth of 40 bill in one year.
Oil price based comparisons are stupid
Fiscal deficit is above normal by upa in any year average.
5.9 to 4.1
Compared to 4.1 to 3.5
Compare how much they grew the economy. Bjp is way far behind in their own chart sheet.
But you guys enjoy your trolling without reading your own made up stats.
-4.3 to -1.7 by upa
2016 to 2017 by bjp
1.3 to 1.1
Forex growth is not worthy because of world recession but still comendable 100 billion in 3 years meaning 33 bill in One yr average compared to 2013 to 2014 growth of 40 bill in one year.
Oil price based comparisons are stupid
Fiscal deficit is above normal by upa in any year average.
5.9 to 4.1
Compared to 4.1 to 3.5
Compare how much they grew the economy. Bjp is way far behind in their own chart sheet.
But you guys enjoy your trolling without reading your own made up stats.
GodToons
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Read my post, #1 and #3. RSS has taken this feedback from 2004 and Modi is creating poor vote bank in line with Indira gandhi. UP is example. Repeat will happen in HP and Karnataka. You must have observed BJP good show in MH & Orrisa local elections.
pothead
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Agreed.
poor and lower middle class does not understand economics and neither have the time for it.
Their requirements are completely different. Modi is targeting them to a large extent.
Still, the narrative of economy not doing well must be countered on facts.
pothead
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No wonder the gang is so angry about Demo and GST.
http://www.opindia.com/2017/10/income-tax-department-provisionally-attaches-roys-shares-in-ndtv/
In yet another move on NDTV’s promoters Prannoy and Radhika Roy, the Income Tax Department today provisionally attaching the entire shareholding of RRPR Holding Private Limited (RRPR), in NDTV. RRPR is one of the promoters of NTDV the media house. RRPR is in turn owned by Prannoy and Radhika Roy.
NDTV informed the Bombay Stock Exchange about this development, saying that RRPR had received an order dated 25/10/2017 issued by Deputy Commissioner of Income Tax, informing them about this move:
The intimation also states that RRPR is in the process of seeking legal advice in the matter. Section 281B of the Income Tax Act, authorises an officer to provisionally attach property of an assessee, if he is of the opinion that for the purpose of protecting the interests of the IT Department, it is necessary so to do. This is applicable in cases of assessment or reassessment of any income which has escaped assessment.
NDTV’s shares were recently the subject of rumours when it was noticed by many that the share prices had moved up almost by almost 80% in just a few days, without any specific public reason.
This attachment of property comes just months after the house of NDTV’s founders Prannoy and Radhika Roy was raided by the CBI. The raid was part a crackdown for bank frauds. The CBI has registered a case against Prannoy Roy, his wife and co-founder of the channel Radhika Roy, a private company and others for allegedly defrauding a private bank. The case related to a Rs 396 crore fraud on ICICI Bank.
The Income Tax too was interested in these web of companies as it was looking into undisclosed income to the tune of Rs 1600 crore relating to NDTV. A media report, quoting sources, suggested that the assessment of the concealed income of Rs 642.5 crore by NDTV Group and related companies was done in February, 2014. Re-assessment proceedings for concealment of income of Rs 403.85 crore were initiated against M/s RRPR Holdings Pvt Ltd owned by Prannoy and Radhika Roy.
NDTV itself had also been in trouble after, Sanjay Dutt, director of a financial-services firm Quantum Securities who owned around 125,000 shares in NDTV, had filed complaints with Enforcement Directorate and Directorate General of Income Tax alleging that that NDTV and its promoters had violated a number of laws. In January 2015, Dutt had filed a writ petition in Delhi High Court against Enforcement Directorate and Directorate General of Income Tax Investigation alleging that both agencies failed to act on his complaints.
The Enforcement Directorate, in November last year, had slapped a show cause notice to NDTV for flouting foreign exchange regulations while bringing foreign investments to the tune of Rs 2,030 crore between 2007-10.
The last time NDTV’s founders had to answer to the law, the media had taken a stand that this was against freedom of the press and the raids on the Roys were an attempt to silence media.
http://www.opindia.com/2017/10/income-tax-department-provisionally-attaches-roys-shares-in-ndtv/
In yet another move on NDTV’s promoters Prannoy and Radhika Roy, the Income Tax Department today provisionally attaching the entire shareholding of RRPR Holding Private Limited (RRPR), in NDTV. RRPR is one of the promoters of NTDV the media house. RRPR is in turn owned by Prannoy and Radhika Roy.
NDTV informed the Bombay Stock Exchange about this development, saying that RRPR had received an order dated 25/10/2017 issued by Deputy Commissioner of Income Tax, informing them about this move:
The intimation also states that RRPR is in the process of seeking legal advice in the matter. Section 281B of the Income Tax Act, authorises an officer to provisionally attach property of an assessee, if he is of the opinion that for the purpose of protecting the interests of the IT Department, it is necessary so to do. This is applicable in cases of assessment or reassessment of any income which has escaped assessment.
NDTV’s shares were recently the subject of rumours when it was noticed by many that the share prices had moved up almost by almost 80% in just a few days, without any specific public reason.
This attachment of property comes just months after the house of NDTV’s founders Prannoy and Radhika Roy was raided by the CBI. The raid was part a crackdown for bank frauds. The CBI has registered a case against Prannoy Roy, his wife and co-founder of the channel Radhika Roy, a private company and others for allegedly defrauding a private bank. The case related to a Rs 396 crore fraud on ICICI Bank.
The Income Tax too was interested in these web of companies as it was looking into undisclosed income to the tune of Rs 1600 crore relating to NDTV. A media report, quoting sources, suggested that the assessment of the concealed income of Rs 642.5 crore by NDTV Group and related companies was done in February, 2014. Re-assessment proceedings for concealment of income of Rs 403.85 crore were initiated against M/s RRPR Holdings Pvt Ltd owned by Prannoy and Radhika Roy.
NDTV itself had also been in trouble after, Sanjay Dutt, director of a financial-services firm Quantum Securities who owned around 125,000 shares in NDTV, had filed complaints with Enforcement Directorate and Directorate General of Income Tax alleging that that NDTV and its promoters had violated a number of laws. In January 2015, Dutt had filed a writ petition in Delhi High Court against Enforcement Directorate and Directorate General of Income Tax Investigation alleging that both agencies failed to act on his complaints.
The Enforcement Directorate, in November last year, had slapped a show cause notice to NDTV for flouting foreign exchange regulations while bringing foreign investments to the tune of Rs 2,030 crore between 2007-10.
The last time NDTV’s founders had to answer to the law, the media had taken a stand that this was against freedom of the press and the raids on the Roys were an attempt to silence media.
pothead
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http://www.opindia.com/2017/10/indi...w-it-has-suffered-a-blow-post-demonetisation/
Opinions
India’s informal Hundi market and how it has suffered a blow post demonetisation
By Chinmay 'Bharadwaj'
Posted on October 28, 2017
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The recent hoopla around declining GDP growth firmly puts blame at the door step of demonetisation. Though the move was controversial mostly among so called liberal elites, armchair economists and of course, the opposition political parties, it paid huge political dividends to Modi government. The reality is, the effects of demonetisation are still unfolding. The initial impact was obviously negative since the move was always meant to be disruptive. But whether it will be positive in long term is yet to be seen.
One sector that definitely got hurt badly was the informal money lending or the ‘Hundi’ market. There are two types of black money – The first kind of black money, the classic black money, generated through bribes. That money does not generate any economic value. It generally stays hidden or in some cases gets flown out of country to Swiss bank. This kind of black money is the worse. It is a true loot of India.
The second type of black money is different. The second type of black money is primarily hidden from the government because of taxation purposes. This money is earned legally and honestly but usually under-‘receipt’ed’. The earners are professionals like Doctors or Architects or businessmen.
Some of these people don’t mind lending it out in Hundi market or the informal money lending sector. The interest rates in Hundi are quite high – 18% on an average and transactions mostly happen in cash. The borrowers usually tend to pay interest on a monthly basis. The market is quite efficient even though the potential to default is high and also it does not have much recourse potential. The lender can lend his own hidden money or pool in money from his circle and front it up to borrowers.
The word Hundi goes back to medieval India. The system can be considered as pre-cursor to formal banking sector. The Hundi is not just lending but also includes cashless remittance. From financing expeditions of Mughals during medieval times to financing grain market transaction during British era, the system lubricated commerce across length and breadth of Indian subcontinent.
Per an article in The Hindu Business Line, the Marwaris were pioneers of Hundi transactions and as the lines of communication and transportation increased during British era, so did the business empires of Marwaris. However, with introduction of formal banking infrastructure in India, Hundi and such similar financial instruments never gained official status.
Per Reserve Bank of India, Hundis are “a part of the informal system, have no legal status and are not covered under the Negotiable Instruments Act, 1881.” Researching on Hundi is not easy and statistics on size and breadth of this financial instrument are almost non-existent. Though RBI mentions about waning of Hundi transaction, the reality is the Hundi market was doing quite well prior to demonetisation.
The obvious question here is, since banking infrastructure is comparatively widely accessible today, why would anyone borrow at such a high interest rate when banks lend roughly at around 10%. The equally obvious answer is because banks literally don’t lend enough money or in lot of cases, don’t lend money at all.
Usually if one has to open a brand new business then banks won’t lend you. They usually require three years of clean and positive balance sheet. That means, the business not just has to be running for at least three years but it should be making money for three consecutive prior years! So, to begin with, the cash is raised through informal means or family money is used. And when expanding in the initial phase, again informal sector is leveraged.
The hundi market black money creates a positive impact on GDP. Businesses get established or are able to expand, generating more cash flows and more jobs. But, all is not positive here. Since formal banking sector is not lending to these businesses, anything’s that not formal and not necessarily legal has hidden costs. Remember the 18% interest? The cost of borrowing has to be recovered, right? So it gets passed on to the service requester or to the consumers indirectly. So, because government doesn’t allow banking to be free of suffocating regulations, the whole society directly or indirectly pays the price. And I am not even adding the lost opportunity costs of the entrepreneurs who couldn’t open their businesses because their business model doesn’t afford them to pay 18% interest!
Demonetisation has impacted Hundi transactions since cash suddenly dried up and became “honest black money”. The cash transactions dried up overnight, so the lending also dried up. The projects in flight or about to get started must have been severely impacted. The effect of this may not even show up directly on GDP growth considering that it’s an informal sector. Plus, projects that did not start would not have any impact on GDP since, but the imprints of it can be seen in consumption pattern.
Government needs to take concrete structural banking and taxation reforms post demonetisation. No, GST is not the answer, not yet at least. GST coupled with lower income tax and simpler income tax would be lot more efficient. (the GST rates are also way to high, but that’s for another topic) Modi government has done great job in increasing banking imprint in rural area but banks don’t exist merely to manage accounts.
So, the next generation banking reforms should free the banks to lend more freely and yes, to take the positive risk. In India, “Mallya gets loans as much as he wants but the small entrepreneurs are made to pay hell to get even a penny. This needs to change in a structured fashion. Just as economy can not be at the whims of government policy, it shouldn’t be at the mercy of informal lending sector either. If Modi government manages to implement these key reforms, then Indian economy will reach the stratosphere it never imagined in a very short period of time. The Bank Recapitalisation plan, may just be the beginning, in that regard.
Opinions
India’s informal Hundi market and how it has suffered a blow post demonetisation
By Chinmay 'Bharadwaj'
Posted on October 28, 2017
Share
Tweet
Share
The recent hoopla around declining GDP growth firmly puts blame at the door step of demonetisation. Though the move was controversial mostly among so called liberal elites, armchair economists and of course, the opposition political parties, it paid huge political dividends to Modi government. The reality is, the effects of demonetisation are still unfolding. The initial impact was obviously negative since the move was always meant to be disruptive. But whether it will be positive in long term is yet to be seen.
One sector that definitely got hurt badly was the informal money lending or the ‘Hundi’ market. There are two types of black money – The first kind of black money, the classic black money, generated through bribes. That money does not generate any economic value. It generally stays hidden or in some cases gets flown out of country to Swiss bank. This kind of black money is the worse. It is a true loot of India.
The second type of black money is different. The second type of black money is primarily hidden from the government because of taxation purposes. This money is earned legally and honestly but usually under-‘receipt’ed’. The earners are professionals like Doctors or Architects or businessmen.
Some of these people don’t mind lending it out in Hundi market or the informal money lending sector. The interest rates in Hundi are quite high – 18% on an average and transactions mostly happen in cash. The borrowers usually tend to pay interest on a monthly basis. The market is quite efficient even though the potential to default is high and also it does not have much recourse potential. The lender can lend his own hidden money or pool in money from his circle and front it up to borrowers.
The word Hundi goes back to medieval India. The system can be considered as pre-cursor to formal banking sector. The Hundi is not just lending but also includes cashless remittance. From financing expeditions of Mughals during medieval times to financing grain market transaction during British era, the system lubricated commerce across length and breadth of Indian subcontinent.
Per an article in The Hindu Business Line, the Marwaris were pioneers of Hundi transactions and as the lines of communication and transportation increased during British era, so did the business empires of Marwaris. However, with introduction of formal banking infrastructure in India, Hundi and such similar financial instruments never gained official status.
Per Reserve Bank of India, Hundis are “a part of the informal system, have no legal status and are not covered under the Negotiable Instruments Act, 1881.” Researching on Hundi is not easy and statistics on size and breadth of this financial instrument are almost non-existent. Though RBI mentions about waning of Hundi transaction, the reality is the Hundi market was doing quite well prior to demonetisation.
The obvious question here is, since banking infrastructure is comparatively widely accessible today, why would anyone borrow at such a high interest rate when banks lend roughly at around 10%. The equally obvious answer is because banks literally don’t lend enough money or in lot of cases, don’t lend money at all.
Usually if one has to open a brand new business then banks won’t lend you. They usually require three years of clean and positive balance sheet. That means, the business not just has to be running for at least three years but it should be making money for three consecutive prior years! So, to begin with, the cash is raised through informal means or family money is used. And when expanding in the initial phase, again informal sector is leveraged.
The hundi market black money creates a positive impact on GDP. Businesses get established or are able to expand, generating more cash flows and more jobs. But, all is not positive here. Since formal banking sector is not lending to these businesses, anything’s that not formal and not necessarily legal has hidden costs. Remember the 18% interest? The cost of borrowing has to be recovered, right? So it gets passed on to the service requester or to the consumers indirectly. So, because government doesn’t allow banking to be free of suffocating regulations, the whole society directly or indirectly pays the price. And I am not even adding the lost opportunity costs of the entrepreneurs who couldn’t open their businesses because their business model doesn’t afford them to pay 18% interest!
Demonetisation has impacted Hundi transactions since cash suddenly dried up and became “honest black money”. The cash transactions dried up overnight, so the lending also dried up. The projects in flight or about to get started must have been severely impacted. The effect of this may not even show up directly on GDP growth considering that it’s an informal sector. Plus, projects that did not start would not have any impact on GDP since, but the imprints of it can be seen in consumption pattern.
Government needs to take concrete structural banking and taxation reforms post demonetisation. No, GST is not the answer, not yet at least. GST coupled with lower income tax and simpler income tax would be lot more efficient. (the GST rates are also way to high, but that’s for another topic) Modi government has done great job in increasing banking imprint in rural area but banks don’t exist merely to manage accounts.
So, the next generation banking reforms should free the banks to lend more freely and yes, to take the positive risk. In India, “Mallya gets loans as much as he wants but the small entrepreneurs are made to pay hell to get even a penny. This needs to change in a structured fashion. Just as economy can not be at the whims of government policy, it shouldn’t be at the mercy of informal lending sector either. If Modi government manages to implement these key reforms, then Indian economy will reach the stratosphere it never imagined in a very short period of time. The Bank Recapitalisation plan, may just be the beginning, in that regard.
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