Tag: Column

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The Ladder of Development and Progress

Development and Progress go hand-in-hand; getting on and remaining on the ladders key to economic growth for individuals and nations. As India changed and economically progressed, it brought hope. There was indeed a pathway out of the poverty that the slow growth of the many decades had foisted upon the society. There was now a way to get out of ration queues to become … Read More The Ladder of Development and Progress

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Larger incomes to tax or larger taxes on incomes?

Budget 2020 cares for people’s economic aspirations, says Axis Bank’s Akhilesh Tilotia. India’s response to its dilemma will determine whether budgets of the next decade will have larger incomes to tax or larger taxes on incomes. This Budget Speech of the finance minister was one of the longest in recent history. Her previous Budget speech in July last year was around 11,000 words. This … Read More Larger incomes to tax or larger taxes on incomes?

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Here’s why India may end up choosing capital flows over current account flows

India may end up implicitly choosing a stance of preferring capital flows over current account flows, if it sets a GDP target in a foreign currency. A currency serves two purposes: medium of exchange and store of value. We have explored this idea in these pages in a different context earlier when we looked at the relationship between legacy finance firms and fintech companies. … Read More Here’s why India may end up choosing capital flows over current account flows

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State finances: Finding the monies

As the Centre and States try to find GST compensation cess monies, it is time to look beyond the present, to see how the future could unfold for State finances. The financial relationship between states and the Centre has been in news recently. The Fifteenth Finance Commission submitted its report to the president; there have been some delays in payment of the GST compensation … Read More State finances: Finding the monies

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Fiscal architecture for a US$5 trillion economy

The evolution of India’s tax-to-GDP ratio will require significant political and social consensus—a strategic modelling and planning of tax POLICIES is required. India’s tax-to-GDP ratio at the government level has hovered around 18-19% of GDP over the last few years (between FY17 and FY20E). Coupled with disinvestments, dividends, and other receipts, the central government mops up another 5-6% of GDP, taking the total revenues … Read More Fiscal architecture for a US$5 trillion economy

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Fintech and legacy finance, not fintech vs legacy finance

The product design strategy of a financial service firm revolves around ‘maturity transformation’, ‘liquidity transformation’ or ‘risk transformation’. There is excitement about fintech eating traditional finance. The incumbents are institutions with legacy systems and older-generation leadership while the new-age challengers are building models on open APIs and have modular, scalable platforms. In the new world, customer engagement is expected to hold the audience captive—this … Read More Fintech and legacy finance, not fintech vs legacy finance

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Housing needs a stronger mortgage market

A house is not merely a place to live and build a life, it is also one of the most significant assets of the family. An investment in a house roots a family to a location, giving them a significant stake in the development of the local area. Housing is a fundamental requirement of human existence. The requirement of shelter is so basic that … Read More Housing needs a stronger mortgage market

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Guiding markets from crisis to calm

This requires confidence, coordination and capital; resolution can’t be imposed using policy actions. When commemorating anniversaries, we tend to reserve our special attention for round-number, decadal years. Last year, around this time, the world—and India—remembered and recounted its lessons from the Great Financial Crisis (GFC) that reverberated across the globe in September 2008. Since it is the nature of history to repeat, but not … Read More Guiding markets from crisis to calm

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A flight plan for tech regulation

The onus falls on business to continue to engender society’s and regulators’ trust in the usefulness of technology. New technologies bring with them challenges of regulation. The key challenges facing regulators in the context of drones are privacy, safety and security. Drones have captured headlines this week. The spectacular drone attack on Saudi Arabian oil facilities knocked out ~5% of daily oil supply. The … Read More A flight plan for tech regulation

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Leveraging open data for policy making

Large digital databases like the GST Network can give granular insight, create predictive models; this can lead to more grounded interventions. A lot has been said about the current economic slowdown. Econometricians have opined on whether the fall in growth rate is structural or cyclical; economists have wondered whether the response has to be from the supply side or whether demand needs a boost; … Read More Leveraging open data for policy making

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Arresting slowdown: Export focus fine, but there’s more to growth

From purely a financial perspective of current account deficit, the distinction between goods and services does not matter. The exports performance of Vietnam continues to be contrasted with that of India: the most recent example being the editorial in this newspaper, “Can India learn from Vietnam to manage export-led growth?”. The article, similar to other analyses on this topic, focusses on the significant ramp-up … Read More Arresting slowdown: Export focus fine, but there’s more to growth

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India must learn from China about aircraft leasing

The announcement of this policy statement in the Budget follows the release of the ‘Rupee Raftaar’ report at the Global Aviation Summit in Mumbai in January earlier this year. The Finance Minister, in her maiden budget, laid the foundation of building an important component of the aviation sector: “As the world’s third largest domestic aviation market, the time is ripe for India to enter … Read More India must learn from China about aircraft leasing