Writing on Union Budget two days after it was presented is a predicament akin to that of Larry Fortensky, the US construction worker -- seventh and last husband of Elizabeth Taylor (by her eighth marriage). On their honeymoon in 1991 at Michael Jackson's Neverland Ranch, Fortensky knew well what exactly he was expected to do but his challenge was how to be different from Taylor’s previous husbands.
On a serious note, let’s focus on the good, the not-so-good and the tricky parts of Modi 2.
In the run up to the Union Budget, all industry bodies reach out to the North Block on Raisina Hill that houses the finance ministry with their agendas. This annual ritual, for the banking industry, typically focusses on the unlevel playing field vis-à-vis mutual funds and the government savings schemes. The banks find it difficult to bring down the interest rates on deposits for fear of losing out to the mutual fund schemes that offer certain tax benefits and the high-yield government savings schemes.
In October 2010, the enactment of a law in the southern state of Andhra Pradesh, then a hotbed of the microfinance industry, almost killed it. The law came into force in the wake of a spate of suicides by microfinance borrowers, allegedly harassed by the coercive measures adopted by the collectors of such loans.
The Reserve Bank of India (RBI) stepped in with regulations capping the interest rates, quantum of loans and the number of borrowers a microfinance company can entertain, and formation of credit bureaus, among other things.
Viral Acharya, Reserve Bank of India's youngest deputy governor post economic liberalisation, has resigned six months before the scheduled end of his term. Acharya who joined the RBI on January 23, 2017 for a three-year term, is returning to New York University Stern School of Business (NYU Stern) in August instead of February 2020 as the CV Starr professor of economics.
People familiar with the development said he had put in his papers a few weeks before the last meeting of the RBI’s rate-setting panel Monetary Policy Committee (MPC) early this month.
In a recent conversation, Rajkiran Rai, managing director of Union Bank, has made an interesting remark. “When we started our career in 1980s, we were not in the business of banking. Since we were government owned (even now, they are), people walked into our branches and kept their money; we did not have to ask for it.
The Reserve Bank of India (RBI) will soon open its window accepting applications for small finance banks' (SFBs) licence through the year. The draft guidelines for such “on-tap" licensing is likely to be ready by August.
The decision is important in many ways.
The suspense is over. Staring at a faltering growth and encouraged by tamed inflation, the central bank in Asia’s third largest economy yet again announced a 25 basis points rate cut on Thursday at the end of three-day meeting of its rate-setting committee — the third time in a row. One basis point (bps) is a hundredth of a percentage point.
Last Friday, hours after India got its newest finance minister Nirmala Sitharaman, a ministry of statistics and programme implementation release revealed that India is no longer the world’s fastest growing large economy. The economic growth in the last quarter of 2019, ending March, dropped to 5.8 per cent, the lowest in the past 20 quarters.
