We’re about two months away from elections in Pakistan -- elections that are almost certain to be shrouded in controversy, one way or another. And, worryingly for Pakistan, it appears that the economy is weakening, just in time for the instability that might follow from the country’s turbulent politics.
Under the outgoing government -- led till last April by Nawaz Sharif, three times prime minister -- the economy had appeared to be doing well. In fact, a new energy seemed to have infused Pakistan’s entrepreneurs and investors; in the last fiscal year, the economy grew at 5.8 percent, the fastest rate in 13 years.
That now appears set to change. Economists polled by Bloomberg worry that, in the coming year, growth will slow to 5.2 percent -- a full percentage point below the government’s own optimistic forecast.
China’s Silk Road
The problem is that much growth in the recent past has been unbalanced, depending particularly on investment from China in the China-Pakistan Economic Corridor (CPECNSE 0.00 %) -- a branch of Chinese President Xi Jinping’s world-spanning Belt and Road Initiative -- and on Pakistani government spending that matches the CPEC’s aims. China’s big bet on Pakistan’s infrastructure has to be paid for somehow, in part through the purchase of Chinese heavy engineering and other inputs.
Those imports have helped swell Pakistan’s current account deficit by 50 percent, to a record high of over $14 billion. Pakistan’s central bank has devalued the currency twice but has felt that it has few options other than running down the country’s foreign-exchange reserves. Over the past fiscal year, a third of the reserves have evaporated.
These are the classic signs of a fragile economy that is failing to tighten its belt where needed. To give the outgoing government some credit, it tried to correct course slightly in its annual budget last month, which cut infrastructure spending by 20 percent.
As the economists polled by Bloomberg point out, however, that’s going to affect growth going forward. Meanwhile, the government’s other expenditures -- on wages, pensions and so on -- went up by 20 percent. There’s an election on, after all. And, of course, the pampered Pakistan military had its budget raised by 20 percent.
Many analysts expect that Pakistan is going to have to turn to the International Monetary Fund in a few months, particularly if its reserves continue to dwindle at this rate. Even the rabidly anti-Western opposition leader, Imran Khan, has reportedly admitted in private that he would approach the IMF for help if he’s elected.
The problem is that Pakistan’s leaders have put all their eggs in one basket. The CPEC may have some advantages for Pakistan’s economy -- for one, it has helped address the country’s chronic power shortage -- but the costs are worrisome. China forces Pakistan to buy Chinese equipment for use in Chinese projects, shredding its reserves; then Beijing extends loans to cover the purchases, which sends Pakistan’s debt soaring.
Pakistan’s external debt is now $91.8 billion -- up 50 percent since Nawaz Sharif was sworn in as prime minister almost five years ago. The public debt-to-GDP ratio is 70 percent, far higher than most of the country’s peers. And about two-thirds of the early loans from China have been extended at a usurious rate of interest – seven percent, according to some experts.
The next government -- even if it’s again led by Sharif’s party -- will have to recognize that Pakistan’s China-first economic model has broken. Frankly, it looks awfully odd for Pakistan to be bankrupted by China and then to approach the West -- in the form of the IMF -- for help. China and Pakistan may be “iron friends,” but this isn’t what friends do to each other.
The truth is that the cure for Pakistan’s economy is obvious -- just difficult for politicians to implement. Pakistan needs to be integrated with the global economy, not just with China’s extractive state.
Only after Pakistan begins to export more to the world will it be able to pay for what investment it needs. Currently, the exports-to-GDP ratio is below 10 percent, far lower than other countries in the region. The Sharif government began structural reform with some enthusiasm, but that effort faded as it ran into heavy weather politically.
The reform program needs to be revived, and forms of funding and building infrastructure must be found that don’t leave Pakistan dependent on expensive Chinese financing. Till that happens, even fast growth won’t be sufficient to paper over the Pakistan economy’s essential fragility.
(This article is published by Economic Times on May 23rd 2018 by Mihir Sharma)
By Prasoon Sharma
China has celebrated Innovation week in various cities on the same lines India has set up Atal innovation centers in nooks and corners of the country. There are efforts going on in both the countries for creating innovators and entrepreneurs. There are efforts which are being made individually by both the countries we would propose that joint efforts should be put by both the countries for Innovation. Think on the lines of setting up India China innovation Forum and then helping both the nation to not only share but also utilize resources.
Atal innovation centers is providing financial and strategic help to all the selected incubators similarly China is also spending a lot on incubation activities, the same money can be utilized for Joint innovation activities.
Post setting up joint innovation forum, the forum can jointly utilize the ecosystem and help policy making think tanks by influencing policy decisions.
“The new direction by President Xi for China is an innovation led growth. As such Shenzhen & HK is ready to play their role in building a world class innovation center and work with other Asian cities to bring together entrepreneurs and innovators at one platform.” said Dr. Witman Hung , Deputy to the National People’s Congress of the People's Republic of China. Dr. Witman Hung is also currently the Principal Liaison Officer for Hong Kong, Shenzhen Qianhai Authority.
"Both India and China have national policy on digitalization, innovation and Artificial Intelligence. This initiative of creating Asian Silicon Valley will bring synergy and thus success for not only India-China but whole world. Asian Silicon Valley will bring partnership between cyber cities to share each other's best practices and build up a cyber hub at the Asian level." said Mr Prafulla Ketkar, Editor of Organiser. Organiser is an affiliated publication of Rashtriya Swayamsevak Sangh (RSS)- the parent organization of the ruling party of India, the Bharatiya Janata Party(BJP). Sh. L K Advani (cofounder of BJP) was former editor of Organiser.
Shenzhen is the manufacturing hub while Bangalore as stated above is a services hub, joining both together will create synergy and will help both the nations to realize innovation targets.
Hong Kong is one of the most significant global financial centers, holding the highest Financial Development Index score and consistently ranking as the most competitive and freest economic area in the world. As the world's seventh-largest trading entity, its legal tender, the Hong Kong dollar, is the 13th-most traded currency. Hong Kong's tertiary sector dominated economy is characterized by competitive simple taxation and supported by its common law judiciary system.
Hong Kong and Shenzhen have close business, trade and social links and are like one connected city.
Shenzhen – The city that transformed China
Shenzhen has transformed from a fishing community of 30,000 to a sprawling industrial and financial megacity, with a population exceeding 12 million.
The city ranked first on the list of 2016 China's Urban Comprehensive Economic Competitiveness.
In 2015, Shenzhen's economic growth maintained a healthy momentum and its GDP grew by 8.9% to 1.75 trillion yuan. It’s total retail sales of consumer goods increased by 2% to 501.78 billion yuan and the foreign trade volume increased to US$442.55 billion. The export and import volume has stayed at the top of the nation's large and medium-sized cities for the 23rd consecutive year.
Shenzhen is currently fourth on the Chinese mainland in terms of economic power and is one of the country's top cities for economic returns. Surpassing Hong Kong for the first time, Shenzhen was placed first on the list of 2015 Chinese cities' comprehensive economic competitiveness, according to the 2015 Competitiveness of Chinese Cities Blue Book.
Shenzhen reported a local revenue of 272.71 billion yuan in 2015, up by 30.9% from 2014. The public budget expenditure in 2015 was 351.9 billion yuan, up by 62.5% from the previous year.
Shenzhen is the main link between the Chinese mainland and Hong Kong and a transport hub for coastal southern China today. The city leads in high-tech development, financial services, foreign trade, shipping, and creative and cultural industries. It has undertaken a mission to pilot China's structural reform and continuous opening up to the outside world.
Bangalore – Economy, Industries and Commerce
One of the important factors spurring Bangalore's growth was that the Central Government invested heavily in public sector industries in Bangalore, partially due to the fact that it is geographically disconnected from India's competitors Pakistan and China. This led to the concentration of technical and scientific manpower in Bangalore and is a factor in leading the "IT revolution" in Bangalore.
Newsweek proclaimed Bangalore to be one of the 12 "Capitals of Style", along with Paris, London and Los Angeles.
Long before Bangalore was called the Silicon Valley of India, the city made its name as headquarters to some of the largest national heavy industries of India. The Hindustan Aeronautics Limited (HAL) headquarters was based in Bangalore and was for the most part dedicated to R&D activities for indigenous fighter aircraft for the Indian Air Force. Today, HAL develops and maintains an impressive fleet of fighter aircraft and trainers for the Indian Air Force including Sukhoi 30 Flankers and Jaguars.
The National Aerospace Laboratories (NAL) is also headquartered in Bangalore and is dedicated to the development of aerospace technologies. NAL has a staff strength of over 1,300 employees and often works in conjunction with HAL.
Bangalore is called the "Silicon Valley of India" due to the large number of information technology companies located there. Many multinational corporations, especially computer hardware and software giants, have operations in Bangalore. Electronics City, located in the southern outskirts of Bangalore, is an industrial park spread over 330 acres (1.3 kmÂ²). Whitefield, located in the northeastern outskirts of the city is another technology hot spot. The government has plans to develop an information technology corridor linking Whitefield and Electronics City. Over 200 Information Technology corporations have facilities in Bangalore. At the peak of the dot-com boom in the late 1990s, Koramangala - a suburb of Bangalore, was believed to have had the highest density of telecom software companies per square mile in the world. Infosys and Wipro, India’s 2nd and 3rd largest software companies are headquartered here and are now billion dollar companies, looking to reach 2 billion in 2005.
Biotechnology is a growing field in the city. Bangalore accounts for at least 97 of the approximately 240 biotechnology companies in India. Interest in Bangalore as a base for biotechnology companies stems from Karnataka's comprehensive biotechnology policy, described by the Karnataka Vision Group on Biotechnology.
In 2003-2004, Karnataka attracted the maximum venture capital funding for biotechnology in the country - $8 million. Biocon, headquartered in Bangalore, is the nation's leading biotechnology company and ranks 16th in the world in revenues.
Institute of Bioinformatics and Applied Biotechnology (IBAB) which is initiated by Biotechnology vision group, ICICI, Biocon which is located in ITPL is trying to shape revolutionary scientists in the field. Like the software industry which initially drew most of its talent from the local public-sector engineering industries, the biotechnology industry had access to talent from the National Center of Biological Sciences(NCBS)and the Indian Institute of Science (IISc).
(Prasoon Sharma, Director of India Global’s Centre for Chinese studies)
(originally published in China Plus - http://chinaplus.cri.cn/opinion/opedblog/23/20180330/110514.html)
UP Chief Minister Yogi Adityanath’s decisions- from banning pan, chewing tobacco, illegal slaughter houses, cancelling public holidays and above all, to go ahead and distribute school bags with the previous chief minister’s photo shows he made of a different mettle. What is more, other state governments too are duplicating his ideas
Over the last few months, images of Chief Minister of the country’s most populous state, Uttar Pradesh, Yogi Adityanath have been flashing all over the place. His government started various transformative changes that is making everyone sit up and take notice. What started off as a ban on pan, chewing tobacco and plastics is transforming not just offices but also officials of the Uttar Pradesh government.
The change is fast and he seems to mean business. The latest move by him asking his party workers not to welcome him and his ministers with flowers during their visits to the districts and instead welcome his team with a cleanliness campaign is striking a right chord with the common man. In what can be termed as an unprecedented move, never before attempted in the political firma, Yogi Adityanath allowed the distribution of thousands of unused school bags, branded with images of his predecessor Akhilesh Yadav. The measure is to save money as he was keen that public money should not go a-begging just for ‘political ego’.
The most tangible message has been his message that no scheme would be named after any person. The flair with which he is going about his tasks and the determination and quickness with which he is taking decisions is taking many by surprise as the five-time Gorakhpur MP and head priest of the Gorakhanath Mutt has taken the Chief Minister’s seat with consummate ease.
The Yogi effect is rubbing off on other states as well, Gujarat, which goes to the polls later this year, came up with an amendment to make cow slaughter an offence punishable with life term. What is striking is all his decisions are being taken with much appreciation by the man on the street and others are following him as well. For instance, the AAP decided to follow Yogi Adityanath and Delhi is to cancel holidays marking birth and death anniversaries. The UP chief minister’s move to cancel 15 public holidays is being applauded by the intelligentsia as well as the common man.
Even the Muslim community in UP is batting for ban on illegal slaughter houses in the state. Yogi Adityanath’s journey from becoming the head priest in 2014 after the death of his spiritual guru Mahant Avaidyanath has been fast and steady laced with fiery speeches and activism. Now that he is the head of the most populous state in the state, all eyes are on him but he has till date, though too early in his tenure is making the right moves and is able to catch the attention of the common man.
As soon as he was sworn in, he lost no time in making the employees read out and take the ‘swaacchta shapath’ the cleanliness oath and weild a broom to make the offices spic and span. The offices now are cleaner than before and sycophancy is slowing fading away. But apart from these ‘cosmetic’ changes a need to root out corruption that is so ingrained in the officialdom is something that one would have to wait and watch.
If one would bring in cricketing terminology. His first few overs have been phenomenal but there is still a long way to go. Well begun, is half done goes the saying, how it will culminate is something everyone is waiting to watch.
An array of speakers would delve on education, industry and economy The India Global Summit is back and the theme for this year is ‘India in 2020- Education, Industry and Economy.’ India stands at the cusp of forging its way in the comity of nations and is well placed with the economy showing steady growth. With a stable government and a new found confidence all three areas: education, industry and the economy are looking up.
The summit this year would be held at the University of Denver on June 10-11. The theme is bound to throw open a medley of new ideas and food for thought. India has had a glorious tradition and an ancient seat of learning with reputed institutions like Taxila and Nalanda that attracted foreign student from across the world. Today however, the Indian education system though produces bright minds has a long way to go in terms of linking industry and educational institutions. The inaugural lecture by SridharTalanki, Dean, DU on India by 2020: New India’s Tryst with Education, Industry & Economy is much awaited.
With 723 universities and 37,000 colleges in the country, the variety of courses offered and talent pool available is something that few countries can boast of. The summit is looked forward by one and all just to know the roadmap for 2020.
Innovation is an area that Indian institutions can do a lot better and this summit focuses to a great extent on the subject. The lecture on Building the Bridges: Innovation for development by Dr Gregory P Pogue should be invigorating.
Topics such as Branding and Marketing Global Perspectives, Changing Urban Landscape through Sustainable Means, Technology & Innovation for Country’s Economic Growth, Global Technology for India, Indo-US Partnership for New India are going to keep the audience enthralled. Noted speakers include Sambhaji Patil Nilgenkar, Prof Andy Goetz, Arjun Sen, Prof Yashwant Pathak, Eddy Sturman among others.
The ban on red beacon lights atop VVIP vehicles from May 1, 2017 has brought cheer to the common man who has been at the receiving end for decades. The decision taken by Narendra Modi cabinet is laudable for the reason that several attempts in the past failed but this time around the Prime Minister is keen to get rid of the red light culture.
The beacon light is a false sense of power that not just politicians and bureaucrats aspired for but in the last few decades several men and women with political clout and connections received the status to flaunt ‘power’ and even get away on the busy roads and gained entry to venues that they could never imagine getting into.
The ‘red light culture’ ensured an ego boost to Indians and provided them with a symbol to parade in public and show that they were ‘important’ people. What the ban has done is now to bring some sort of a level playing field. The common man on the road now no longer would be cold shouldered and pushed aside. The red beacon was like a crown that gave the man inside a car a superior power. That power is now taken away for good and there is no need to wait till May 1 as ministers and all and sundry have already started pulling it out in a hurry that was never seen.
That it took a cabinet decision to get rid of the red light shows how much it meant to people in power. Several earlier attempts failed and that is why this decision gains even more prominence. In pre-independent India men would carry umbrellas whilst the maharaja and nawab walked, some still do when a politician makes an entry. The end of the lal batti is a big step and augurs well for more such decisions. One hopes this is just a beginning.
If one may believe the next ban would be on the entourage that accompanies politicians. History has already proven that men of calibre never aspired for a beacon or an array of cars to follow them. The former President and missile man of India A P J Abdul Kalam is a shining example.
What the ban on lal batti culture has done is to give the common man hope. Hope of a better future where the janta janardhan too has a voice and he can stride alongside the ‘powers that be’!
The 82-year old Buddhist monk could anoint his successor from Tawang, the second most important seat of Tibetan Buddhism after Lhasa and China fears this could lead to another prolonged opposition to Chinese rule
If China can control the future reincarnations of the Dalai Lama, it would have tighter control over Tibetans and that is why it is so jittery with the visit of Dalai Lama to Tawang. It is not the first time though that China has opposed the spiritual leader visiting Tawang. This is his fifth visit to Tawang since he fled China and came over to India in 1959, but this visit gains great importance as Dalai Lama is growing old and there is every possibility that he may anoint his successor from Tawang.
Even a slight mention of Tawang by the Dalai Lama unsettles China as it is the Dalai Lama who appoints the TawangGompa chief, the head of monastery while Beijing appoints the heads of Tibet monasteries. Any development in Tawang has China standing up and taking notice for it considers Tibet as the core and Tawang its periphery.
Tawang has great significance among Buddhists as the 6th Dalai Lama’s birthplace. China considers Arunachal Pradesh as a part of South Tibet and a disputed territory. Tawang is 47 km south of McMahon Line which separates India from Tibet and it is at the Tawang monastery that the Dalai Lama stayed after he escaped from China in 1959.
Beijing insists that India cede Tawang to China in any border settlement. Right from the 50s till early 80s, China was content with the territorial status quo in Arunachal Pradesh on the basis of the McMahon Line but now it has changed its stance.
China has been vocal in its concerns of Dalai Lama’s visit to Arunachal Pradesh but it leaves no chance in blocking India’s bid into the Nuclear Supplier Group and has no qualms in going ahead with the multi-billion dollar China-Pakistan Economic Corridor, running through Pakistan Occupied Kashmir (POK).
India by allowing Dalai Lama to travel to Arunachal Pradesh has issued a strong signal to China and the Union Minister for Home KirenRijiju who hails from Arunachal Pradesh stating that China should not interfere in India’s internal affairs. Arunachal Pradesh has been the main area of concern and taken centre stage in Sino-Indian relations since 1962 war when China made inroads into 45 km inside Arunachal Pradesh but finally vacated to avoid international condemnation. However, they occupied 30,000 square kilometres in Aksai Chin area which they refuse to let go.
At the international stage, China makes every possible move to thwart India as in the case of United Nations ban on Pakistan-based terror mastermind MasoodAzhar on technical grounds but when it comes to Tawang, China gets uneasy probably it reminds itself of its misadventures in Tibet by crushing the mass uprising.
China needs to understand that Arunachal Pradesh and Kashmir are to India what Tibet and Taiwan are for China.
China is spreading its tentacles in the Indian Ocean region (IOR) and has chosen the tiny nation of islands-Maldives to do so. This is a great cause of worry for India, simply for the reason that Maldives lies in the important shipping route that includes the East-West shipping route that transports oil from Middle East to East Asia.
Though Maldives and India have had a long friendly relationship for hundreds of years due to its proximity (Just an hour’s flight from Trivandrum) the increasing Chinese presence in the archipelago is making New Delhi uneasy and for the right reasons.
India already has to deal with the US base in Diego Garcia and now China is increasing its investments in the Maldives. The ultimate aim would be to set up a military base at the tip of India. Military experts have all along cautioned the Chinese moves. Though the Chinese government says that investments are primarily in maritime infrastructure and are done for commercial gains but if one goes by their track record, the Chinese end up expanding to their naval strength. For instance, Gwadar in Pakistan and Hambantota in Sri Lanka.
The Chinese inroads into Maldives have been rapid in the last five years. From the establishment of the Chinese Embassy in the 1.5 sq.km capital Male’ to the contract of developing the Male airport to Chinese Beijing Urban Construction Group (BUGG). It may be noted that initially the contract was given to GMR Group an Indian company but as governments changed, the contract fell apart. China is also building Gadhoo port in the Southern Atolls.
The Maldivian economy is based on fishing and tourism but with globalisation and greater dependence on oil and other goods to be transported from the East to the West, the strategically located Maldives band in the middle of the Indian Ocean has gained currency and all countries including the US, China, UK and Russia are interested in the Maldives.
With just 200 of the 1,300 islands inhabited, the Maldivian government sees a chance to make the most of the uninhabited islands. As a result it ratified a legislation to allow foreigners with investment of more than a billion to own land within a specified site with a condition that at least 70 per cent of the area they develop is reclaimed from the sea. (There have been reports that due to global warming several low lying islands in the Maldives would go underwater by 2050.)
Whenever India raises questions on the growing Chinese presence, the Chinese government is quick to respond saying that it assures to keep the Indian Ocean demilitarised zone. However, it has been seen in Sri Lanka as well as Pakistan that China initially expands by investing in infrastructure in a foreign country and later strengthens its military might.
Maldives has always known as a country that raises its voice of the ill effects of climate change now wants to transform itself into becoming a major force in the Indian Ocean and transform into a trade hub and an important trade and transit port.
Maldives being a small country with just a population of 4 to 5 lakhs with the majority of the population living in Male the capital, the clout it would have to stop big powers from marching ahead with their hidden agenda is a question that is on everyone’s mind. More so India’s.
A strong BJP led government provides the buoyancy that the markets need to step up reform
What do the election results in five states mean for India Inc and the economy as a whole? Will it usher as in the words of the Prime Minister Modi a new India? It may be too soon to say in the affirmative but the triumph in UP is definitely going to ‘UP’ the ante on reforms, including the roll out of GST.
All fears of a backlash due to demonetisation have now been laid to rest and BJP making inroads into Manipur, a Congress bastion for decades has shown that the Modi wave is indeed sweeping across the country. A strong majority brings in confidence and investments for Asia’s third largest economy.
Markets and politics connect in more ways than one. A majority government always provides buoyancy to the economy and investors show confidence. If the recent election results are any indication, it was what the doctor ordered. There are going to be decisive reforms, concerted efforts and a positive sentiment.
A good majority drives the economy and the kind of sentiment that is prevailing in the nation; this sentiment could extend till the next decade.
What this means for the economy is a new found confidence, a stable government, easy movement of policies and effective long-term plans. All concerns on the political front are now dissipated and the new mantra that Modi speaks about is poor to be given opportunities and not dole. This will have a far reaching impact as dishing out dole would only make people lazy but by giving them opportunities would mean to nurture entrepreneurs.
The pangs of demonetisation now a thing of the past, the Modi government is likely to widen reforms. The possibility of retaining power even after 2019 imminent as of now, the economy is bound to grow. Efforts to transform India from a soft state would now get a fillip. Political stability lends confidence and markets thrive on it.
There are still two more years to go before a complete assessment of his impact on the Indian economy could be made but for now, he seems to delivering.
During the 2014 elections, Indian economist Arvind Subramanian said that Modi’s intentions involved a Thatcher-like ‘Big Bang’ of policy moves but was not sure if Modi could pull it off. It seems as if he is in all earnest if not pulled it off, is on his way.
The economy’s biggest gain from demonetisation is the speed at which e-transactions are increasing. They say that the biggest innovations take place during times of adversity and the Indian Railway is a fine example by using a situation to its advantage.
The ‘demon of demonetisation’ or ‘demonetisation blues’ has become the nomenclature post demonetisation and reams have been written on its effect and also how it affected millions across and beyond the country. However, the rail behemoth is looking at the brighter side and a trickledown effect if one may call it to transform how passengers use the facility and is in the process of changing the way railway stations function in the country.
In what can be termed as a first time endeavour, Kacheguda Railway station in Hyderabad was transformed into a completely digitally enable station where a passenger right from parking his vehicle, buying a bottle of water, tickets, using the cloak and waiting rooms and making transactions could do with digitally.
All vendors from teas stall owners, fruit sellers, catering units, book stalls have been given PoS.
This experiment is hardly 20 days old and the people are already warming up to the idea and 20 per cent of the transactions are digital. Buoyed by the success, the Indian Railway has decided to make all stations digitally accessible and has included the digitisation of railway stations across the country.
Tea Stalls, Fruit and Juice Centres, Catering Units, Book Stall, Dairy Parlour have been enabled with Point of Sale (PoS) machines.
In 2017-18, Indian Railways plans to make 25 important stations as ‘Digi-Pay’ stations. The Indian Railways has included the idea of ‘Digi-Pay stations in its business plan for the financial year which was released last week by the Minister of Railways.
The economy’s biggest gain from demonetisation is the speed at which e-transactions are increasing. They say that the biggest innovations take place during times of adversity and the Indian Railway is a fine example by using a situation to its advantage.
While pundits debate whether the data released by the Central Statistics Office (CSO) showing India’s third quarter GDP growth logged at 7% in December quarter could be taken seriously or whether other methodologies need to be assessed, there is no difference on issue that there is a spike in digital transactions.
The Indian railway runs 21,000 trains every day to transport 23 million passengers. If even 70 per cent of these passengers turn to cashless transactions, the benefits are huge. By next year, 25 stations in the country would be digital. The revenue from ticket booked through cashless means in reserved and unreserved segment has increased from 58% to 68% and 6% to 8% respectively post demonitisation.
The number of debit cards rose from 739 million to 818 million since October. The number of credit cards from 27 million to 29 million. The value of card transactions on PoS machines shot up more than 41 per cent from October till December.
Demonetisation blues have had their part to play and still does but what the Modi government has done in one single stroke is to open up a wide array of opportunities to do business. The Indian Railways has taken the opportunity. Will young entrepreneurs come up with ideas, there is a lot of opportunity for the willing.
Union Budget 2017: A push and a shove for Start-ups, Technology and Innovation could have done wondersRead Now
Overall I would give a thumbs up for the budget, however, due consideration towards the few ‘missing’ links could have made me happier.
One page tax form, bringing down personal income tax by 5 per cent for a section of salaried class, trimming the corporate tax slab to 25 per cent for Micro, Small and Medium Enterprises (MSMEs) has caught the imagination of a segment of the population in the Union Budget 2017-18 but for the startup and Tech Innovation world it has next to nothing.
Science & Technology, Innovation and Startups are the one who build the ‘future’ of the society. The investment in the mighty three is high and yield slow results, but once the results starts coming the impact is huge. Take an example of investment in space technology program few decades back, now India is among leaders in the world.
If there was a time ever for the startups to be given a push it is now, for one has witnessed a drop in startups, money drying up in venture capital and a few going back to taking up jobs. A clear policy on issues besieging the startup world would have given a spring it its feet as the verve that one witnessed in the startup sphere a few years ago has weaned a bit.
Clarity on three fronts namely; innovation, Science & Technology and startups is lacking in the budget. The trio can create a platform and leapfrog in the future. There is nothing much for the entrepreneurial eco-system in the budget.
What was expected in the budget was a fillip to the start-ups by way of clarity in rules and most importantly how to handle losses. Few start-ups are making profit and the tax holiday is valid to only those start-ups who are recognised by Department of Industrial Policy & Promotion (DIPP).
That there is a world of talent out there waiting in the wings to fly with ideas is a foregone conclusion. Youngsters in their teens to 25-somethings are raring to go. If only the budget had something on the Angel tax, it could have done a world of good for the start-ups.
The innovation and startup ecosystem needs a push, handholding and direction. The small businesses will become competitive in the global market ie the MSME sector. Similarly, if there was a rethinking on issues plaguing the startup community such as taxes on early stage investment, ease of doing business and a more comprehensive long term plan for the community to grow, the 2017 budget would have boosted the morale.
The entrepreneurial ecosystem badly needs a push and that should precede with a robust long-term policy on innovation, Science & Technology and Startups. It is never too late; a meeting with all the stake holders on envisaging a plan is all that is needed. Anyone ready? I am.
(The article has been written by Nikhil Agarwal, Chief Executive Officer, AP Innovation Society, Government of Andhra Pradesh. All the views expressed are personal)