Micro ATMs are Helping Fill the Gaps

Financial inclusion has been a multifaceted problem for the whole world. The whole world is facing difficulties bringing in people in the formal financial system. Even the developed countries cannot claim to have brought its citizens into the formal financial system. And when it comes to a developing country like India, financial inclusion is a herculean task. However, India’s performance in bringing her citizens into the formal financial system in the last decade is really remarkable.

A number of initiatives and schemes such as Jan Dhan Yojana to Pension Yojana to Mudra Yojana etc. have been started by the central government in India over time to bring in people in the formal financial network but still a long distance is yet to be covered. There are crores of individuals who are still not part of the formal financial system or cannot access the formal financial system. Though, the government has been trying to use every possible initiative and technological advancement to advance financial inclusion in India. ATMs have also been used to increase financial inclusion in India especially in rural India.

Credit Cards are Becoming More Popular in India

Anything and everything has some direct or indirect impact on people and their behaviours and responses. Globalisation, technological advancements, innovations and the different practices in different parts of the world have together completely changed the markets and so the consumers’ behaviours. These have brought in significant change in the financial behaviours of the consumers also and India is not an exception to this phenomenon. Rather India has been a pioneer in many changes these days especially after 2010.

All types of loan products were traditionally considered to be the last option and if possible were expected to avoid loan products as much as possible and financial institutions were always the last assort for the people. However, there is a significant change in the financial behaviour of Indian consumers over the last decade.

Minimum Support Price (MSP) is a Necessity

Minimum Support Price (MSP) of farm produce has always been a controversial issue as higher MSP always meant higher cost of living for the salaried class and so higher inflation for them! And when urbanization in India has become more prominent than ever, high MSP becomes a political issue rather than being just an economic matter. And over time, MSP which was brought in the Indian economic policy making has become completely a political issue and its economic importance has been pushed in political background!

But the question remains unanswered as to why India needs a regime of MSP when it is a very politically, socially as well as economically sensitive issue?

Media Against Bharat in G-20 Summit

A large number of news outlets irrespective of foreign or Indian, were hell-bent on declaring the G20 Summit a failure with the purpose to discredit Bharat before the G-20 Summit had even started! The Print, The Wire, Hindustan Times, Business Standard etc. along with the foreign news outlets were loudly declaring with huge confidence that there would be no New Delhi Leader’s Declaration because of non-consensus among the members! Why? Because the European countries and the USA wouldn’t tone down on the Ukraine-Russia war and India wouldn’t go against Russia. Rather India would opt for the middle path. So they were certain!

Rising Wealth Inequality in India

Inequalities in wealth and income are prevalent across the globe. There is perhaps no economy in the world that is not facing the challenges relating to inequalities in varying degrees. India is also faced with the challenge of increasing inequalities across states and regions on both fronts. Every year, through many surveys, different institutions and organizations highlight the issue of inequalities in India. A lot has been done to alleviate poetry but when it comes to inequalities, policy responses fail to address them.

After having a look at the data relating to wealth per adult in India, it is evident that the average wealth in India is found to be far higher than that of the median wealth. In 2022, the average wealth per adult was $18,048 and the median wealth was $4,107 in the same year. The average wealth was about four and a half times the median wealth in 2022.

Globalisation or Regionalisation?

COVID has been a learning experience for all countries across the globe. There is not a single country which was not negatively impacted; mostly in the form of supply-chain disruptions. As a result, countries have been focusing on domestic markets on both sides; demand and supply sides. So at present, their focus is revolving around increasing domestic production as well as consumption. This is more true in emerging economies like India, China, Brazil and South Africa. China is working on increasing domestic consumption while India, South Africa and Brazil are tirelessly working to increase manufacturing in their own domestic markets. However, all four countries of the BRICS bloc are working to increase their export share in global trade and this is pushing the globalisation movement forward.

However, since COVID supply-chain disruptions, many intellectuals have been talking about de-globalisation and predicting that de-globalisation would soon become a new phenomenon. It is quite possible that in the future de-globalisation may become more evident than today, but at present de-globalisation seems to be just another phrase being overused by academia! At least, the data says so.

What is Better? Efficiency or Fancy Degrees?

In 2013, the global rating agency S&P started discussing and threatening to put India in the junk category. However, today after just 10 years, the same S&P is declaring India as the fastest-growing economy in the world. What has happened in just 10 years that S&P has changed its mind and is the most optimistic about India? Is it magic or has this change just happened?

No. Surely, not. This did not happen just like that. For this, the Government of India has put in a lot of effort in the last 9 years and the fruits of those efforts are now visible in every aspect of life in India. It is a well-known fact that the effect of any structural reform is visible in any economy with a lag.

Indian Economy a Bright Spot but a Bumpy Ride

Most of the economic indicators clearly and reasonably indicate that the Indian economy will grow with a growth rate of not less than 6% in 2023. This is the highest rate of growth among the largest economies in the world while the global economy is slowing down. So without a doubt, it can be said that the Indian economy is a bright spot in the global economy when a soft to moderate recession is in offing in the world economy. This may look euphoric but this ride wouldn’t be an easy one but bumpy and full of many challenges.

At present the Indian economy is facing two big problems that need to be fixed in the short to medium term. The first and most significant problem is high inflation in the economy. This is a very costly situation for the Indian economy. To tame the inflationary situation, RBI has maintained a hawkish monetary policy and this policy stance is the biggest challenge for the economy as if the central bank continues to increase the interest rates in the economy, it would be very costly for the economy.

EAST vs WEST: Divergent Responses to the Russia-Ukraine War

The Russia Ukraine completes a year – much to the dismay and wonder of all, especially Russia which could not have expected this stiff resistance from a small neighbour. The world has responded with anger, anguish, dismay and much more, as the war has taken a toll on countries worldwide. There have been varied responses by countries across the world, and there are some questions and observations about the East vs West response.

The Asian response has been cautious and watchful and followed a nuanced path as the war has progressed. The current responsiveness of countries such as China and India is based on pragmatism to cope with the multiplier effect of the pandemic, compounded by the current conflict. As the post-pandemic global environment led to the worst-ever economic depression in decades, responses of countries have attempted to combine domestic issues of survival with social and ethical concerns. The current conflict has exacerbated the global crisis as prices of food, oil and fertilisers have skyrocketed across the world, complicating domestic issues for many Asian countries.

Adani, Valuation and Share Prices

Post Hindenburg’s report, a kind of saga unfolded causing temporary chaos in the Indian security market and raising large numbers of questions relating to Adani Group ranging from financial reporting to stock price manipulations to corporate governance. But it becomes pertinent to ask whether those questions are relevant or not.

It is not that the Adani Group is beyond question. There are a large number of serious questions that should be asked and are being asked as well. However, a lot of people have suddenly woken up to ask questions relating to the valuations of the Adani Group stocks post-Hindenburg saga and the withdrawal of FPO by Adani Enterprises.