Demonetisation has short term pain but will bring long term gain
GN Bureau | December 24, 2016
“This government will continue to follow sound and prudent economic policies, to ensure that India has a bright future in the long run. We will not take decisions for short term political point scoring. We will not shy away from taking difficult decisions, if those decisions are in the interest of the country. Demonetisation is an example. It has short term pain but will bring long term gain,” said prime minister Narendra Modi on Saturday.
Speaking at the inauguration of National Institute of Securities Markets (NISM) campus at Patalganga, Modi said that this is a time of slowdown in the global economy.
“Developed countries and emerging markets are both facing slow growth. Against this background, India is being seen as a bright spot. Growth is projected to remain among the highest in the world.“
“India’s place as the fastest growing large economy has not come about by accident. To see how far we have travelled, we should look back to 2012-13. The fiscal deficit had reached alarming levels. The currency was falling sharply. Inflation was high. The current account deficit was rising. Confidence was low and foreign investors were turning away from India. India was considered the weakest of the BRICS nations,” he added.
The prime minister said that in less than three years, this government has transformed the economy. “We have cut the fiscal deficit target every year and also achieved it every year. The current account deficit is low. Even after the redemption of loans taken under the special currency swap in 2013, foreign exchange reserves are high. Inflation is low, running at less than 4 per cent compared to double digit inflation under the previous government. Public investment has increased largely, even while the overall fiscal deficit has been cut. A new monetary policy framework has been introduced by law with an inflation target.”
He went on to say that the Constitutional Amendment on Goods and Services Tax had “remained pending for years. It has been passed and the long awaited GST will soon be a reality. We have made progress on improving the ease of doing business. As a result of all these policies, Foreign Direct Investment has reached record levels. By claiming that demonetisation has stopped a fast moving car, our critics too have acknowledged the speed of our progress”.
Modi said that financial markets can play an important role in the modern economy. They help in mobilizing savings. They channel the savings towards productive investments.
However, history has shown that financial markets can also do damage, if not properly regulated. It is to ensure good regulation that the Securities and Exchange Board of India, - SEBI - was established by the government. SEBI also has a role to promote the development of healthy securities markets.
Recently, the Forward Markets Commission has been abolished. SEBI has been given the task of regulating commodity derivatives also. This is a big challenge. In the commodity markets, the spot market is not regulated by SEBI. Agricultural markets are regulated by states. And many commodities are purchased directly by the poor and the needy, not by investors. Hence the economic and social impact of commodity derivatives is more sensitive, he said.
"Sanitation is more important than independence". --Mahatma Gandhi The world is moving towards global transformation and sanitation is an important aspect in the development of any country. The United Nations (UN) has observed in 2015-16 that 19.7%
Legendary film star and politician Shatrughan Sinha has said that friendship in Bollywood is limited to onscreen, and there is no unity and some news channels are taking advantage of this situation. “Groups within the industry or their supporters may sometimes come together for some c
In India, only 2.40 million out of an estimated 2.64 million cases of tuberculosis were reported to the government, that is, 2,40,000 TB patients went unreported, in 2019, according to the WHO Global Tuberculosis Report 2020. The reporting of TB cases, however, has significantly increased ov
Fifteen years back, the Right To Information (RTI) Act became operational on October 12, 2005. It was the auspicious day of Vijayadashmi. It appeared to herald a new evolution in Indian democracy. Citizens who had been advocating this law saw an opportunity of converting India’s defective elective de
As Maharashtra governor Bhagat Singh Koshyari went sarcastic and wrote to chief minister Uddhav Thackeray, asking him if he had turned ‘secular’ – an epithet he hated, as the places of worship remain closed amid the Covid-19 pandemic; the Shiv Sena chief replied he did not need certificat
When it was launched on October 12, 2005, the Right to Information Act ushered in a revolution, empowering common citizens to ask questions on a range of government activities and seek accountability. Over the years, they – especially a new breed of activists – made good use of the new law, to