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India ushers into digital era in a big way

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Digital foot print is the new currency for economic development of next generation for any country. The recent viral video of Indias External Affairs Minister S. Jaishankar narrating an incident of his visit to a restaurant in the US along with his son during the Covid-19 pandemic indicates how India successfully adopted digital technology to manage the crisis, taking advantages of the Central governments CoWin portal. While the Indian Minister showed his vaccination certificate using his mobile, his son who lives in the US, took paper certificate out from his wallet. This shows the degree of adoptability of digital technology in India, which is even much higher compared with many developed countries like the US. Although being a developing country, Indian digital footprint is appreciated worldwide for its social inclusiveness, which has 2nd highest penetration of internet users in the world with 600+ million users. Bullish about the digital power and accessibility of the internet in India to transact and its deep penetration into the society, Scott Rigby, chief technology advisor and principle product manager for enterprise solutions at JAPAC, during a recent visit to India stated: “India is very lucky.

You’ve got a deep pool of technical talent to be able to execute on that and be able to realise that.” Currently, India is also eyeing upon the expansion of 5G network to capitalise its advantages, which would further expand digital foot print. The penetration of digital footprint has expanded to all the sectors of the Indian economy which is attributed mainly to the factors of affordability, i.e. availability of cheap data as well as local talent along with federal government’s push, and it is catching up. The momentum of digital revolution could be gauged from increase in the smart phone users base, multiplying 5 times during the period 2014-2019. Global telecom gear makers expect India to account about 15% of the worldwide market for the 5G network. It would cover over 50 per cent of the geographical area of the country in the next two years. The development would usher India in a big way into a digital economy. Analysts point out at the difference between access’ and usage’ of technology, especially in digital infrastructure and India had alreadymastered both of them.

The issue facing the developed world is usage’, i.e., consumer privacy, security, data protection, productivity. The developing world needs access’, i.e. digital availability, affordability and usage of infrastructure. India’s path in digitalisation showed a universal approach that is necessary to reconcile these factors and became a successful leader in its programmes. India’s crossing the digital divide had been demonstrated during the pandemic. It created special platforms for Aarogya Setu’ app using CoWin platform and coordinating all data and public supplies, including hospital bed management, vaccine distribution, thereby successfully managing Covid pandemic and minimising waste, besides giving access to health resources to all the eligible. India’s success story also proved that it can bridge a hard’ and soft’ infrastructure gap — hard’ includes devices, electricity, telecom, servers, data centres, while soft’ includes digital platforms, content, legal and policy measures across valuechains. India even offered the technology for social benefit of other countries i n p u b l i c g o o d management.

Covid vaccination programme of Indian government was the most digitalised public programme. India adopted a complete digital approach while planning the vaccination strategy as it could secure and trustworthy proof to establish when, where and by whom the citizens have been vaccinated. This digital approach avoided all kinds’ malpractices and wastage in the vaccine administration, besides winning over heart of millions all over the world. Digitally connected social welfare programmes came handy during the pandemic. Using the biometric identity, the Indian government’s public programmes connected to bank accounts through which citizens receive services and subsidies, from pensions to remittances, licences to food rations, expanding social inclusiveness in the country. The unique feature of it is that public authority stores the digital records but consent of sharing data lies with the individual, thus maintaining privacy as well as foolproof access to the system to implement welfare programmes for targeted groups minimising misuse.

It has been tested during the pandemic across India’s vast, diverse population, and at monumental scale with food rations for migrant workers, vaccines taken and digital certificates provided. Successful digitalisation of country is that which is making digitalisation a public good’ — available, affordable, accessible, auditable, scalable — with privacy embedded in its design. The UN Secretary General had also noted this in a substantive road map for digital cooperation between the countries. It is so because the world is also tied down to three approaches, proprietary digital platforms owned by a few private players, especially the developed ones, a government mandated system, especially in a democratic country, and a broad regulation for consumers disconnected from their needs due to digital divide. Fintech is another area where rapid digitalisation is cutting down the cost of lending. According to a report by VC firm Chiratae Ventures and Ernst & Young (EY), digital lending space in India is expected to touch $515 billion along with the asset under management (AUM) touching $1 trillion by 2030. India is democratising credit flows to MSMEs while s i m u l t a n e o u s l y d r iv i n g digitalisation within them, a step further in digitalising the c r e d i t f l o w s .

I n t h e absence of data, the costs of reaching these MSMEs, underwriting, monitoring and repayment risks of small-sized loans, make it difficult for lenders to provide cheap credit. Further, it i s b r i n g i n g t o ge t h e r private participants like a p p – b a s e d c o m p a n i e s , c r e d i t – s c o r i n g , m u t u a l funds, insurance, telecoms, to speed up innovation across the entire lending value chain. Digitalisation of financial inclusion is a great success of the Indian government. Private sector entities are also taking part in the digital development through their own networks that too without support from the government, that is unique to any country. There are many Indian private players who have tied up with public authorities around the world to provide public solutions to enhance welfare of people. The need of the hour is more and more digitalisation for both supply chain management as w e l l a s f o r r e s o u r c e s management to minimise wastage & cost. The hope is for democratic digitalisation to create new tiger economies, across continents, in the IndoPacific, Africa, South America and the Caribbean. With the deadline for the 2030, Sustainable Development Goals approaching, time is running out to tackle mega challenges right from climate crisis to better healthcare and education for all. Digitalisation is a boon to the administrators across the world, where in India had already became a leader. Digital footprint is the new age infrastructure and India is going to reap more benefits in the coming days. The digitalisation would promote public welfare in a d e m o c r a t i c m a n n e r a s exemplified by India.

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Rupee fell 11% in 2022, its worst since 2013

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Monetary policy tightening by various central banks to contain inflation, the war in Ukraine leading to price rise for crude oil and subsequent realignment in the global energy supply chain, and strengthening of the US dollar index kept the Indian currency under pressure in 2022. The Indian Rupee has been in the news cycle for a considerable part of 2022 for its steady depreciation. In 2022, the Rupee depreciated over 11 per cent on a cumulative basis, its poorest performance since 2013 and the worst drubbing among Asian currencies — as the US Federal Reserve’s aggressive monetary policy propelled the greenback. data showed. It breached the 83-mark against the US dollar in mid-October, to hit an all-time low. It has, however, performed better than most Asian peer currencies, including the Chinese Renminbi, Indonesian Rupiah, Philippine Peso, South Korean Won, and Taiwanese Dollar during the current financial year. The US Federal Reserve policy rate is now at a target of 4.25- 4.50 per cent, the highest level in 15 years, which was near zero in the early part of 2022. An increase in policy rates in the US and other advanced economies typically leads to a depreciation of the emerging markets currency such as the Rupee. “Indian Rupee has had a mixed year in 2022, as far as relative performance is concerned. During the first three months it was an underperformer due to higher oil prices. However, it came back strongly during the mid of this year, due to fall in the energy prices and aggressive intervention from the RBI. But since October, we have seen Rupee underperform its peers once again, but this time due to larger than usual demand from oil importers,” said Shrikant Chouhan, Head Equity Research at Kotak Securities. Chouhan added 2023 can be a year of two halves. In explanation, he said “the seeds of a global economic slowdown could germinate” in the first half due to tightening monetary policies and fiscal policies and the alarming situation from Covid in China. “During the second half, we expect (US) Fed and other central bankers take notice of dramatic fall in inflation and growth and lower interest rates. Interest rate cut from Fed can boost inflows into emerging markets during the second half of 2023,” Chouhan of Kotak Securities said, adding that he sees Rupee versus the US dollar in a broad range of 80.00- 85.00/8.50 in 2023. However, everything is not gloom and doom for the Rupee fundamentals as the US Dollar index has fallen from the peak of 114 to around 105 currently. According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “The Dollar will stabilize and start weakening when the (US) Fed pauses by Q2 of 2023. RBI has done a good job in intervening in the forex market to stabilize the rupee and manage the forex reserves.” Typically, the RBI from time to time intervenes in the markets through liquidity management, including through the selling of dollars, with a view to preventing a steep depreciation in the rupee. At the start of 2022, the overall forex reserves were at USD 633.61 billion, which is currently at USD 563.499 billion. Much of the decline can be attributed to RBI’s intervention and a rise in the cost of imported goods. “The RBI intervention in forex spot market will curb any upside momentum in USD/INR rates. This will help to stabilize exchange rates around 83 – 87 in 2023,” said Sumeet Bagaria, Executive Director at Choice Broking, adding that it would be interesting to see how the RBI tackles the situation. Going ahead, much of the Rupee’s movement will also depend on the monetary policy action by the US Federal Reserve. “If we look ahead to 2023, the first half will still be unpredictable because the USA’s terminal rate is still unknown, and the RussiaUkraine war has not yet ended. As a result, the first half of 2023 may see some additional weakness, but the second half may be better for the rupee because US interest rates may reach their peak,” said Santosh Meena, Head of Research at Swastika Investmart. For 2023, Meena sees Rupee in a tight range of 80.0-83.5.

Another breather may come from the decline in international crude oil prices, which currently is trading at about USD 78-80 per barrel. It touched as high as around USD 130 per barrel earlier this year. “We expect rupee to trade on a negative note moving between 84 to even hit as low as 85 mark against the US dollar as deteriorating global risk sentiments may put downside pressure on rupee. The rupee is currently around 82.8 against the US currency. Weak global markets may lead safe haven flows towards US dollar. However, sharp fall in crude oil prices may prevent sharp downside in rupee,” said Mohit Nigam, Fund Manager and Head – PMS, Hem Securities. A depreciation in Rupee too has its own share of advantages as it typically raises exporters’ earnings. What is India doing to reduce the over-dependence of the US Dollar and subsequent internationalization of the Rupee? The RBI had announced various measures recently to diversify and expand the sources of forex funding to mitigate exchange rate volatility and dampen global spillovers. Of them, the major one is that the RBI has put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in Indian currency in mid-July, 2022. If the mechanism fructifies then it may go a long way in internationalizing the Indian currency rupee in the long run. Talks between India and UAE are already on for a RupeeDirham-denominated bilateral trade.

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RBI: Global spillovers, financial market, general risks increased

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The Reserve Bank of India’s latest Systemic Risk Survey (SRS) showed that global spillovers, financial market and general risks have increased, while macroeconomic risks have moderated. The survey also showed respondents’ confidence in the Indian financial system further improved with 93.6 per cent of them remaining fairly or highly confident of the stability of the Indian financial system. No change is perceived in institutional risks. Monetary tightening in advanced economies, tightening of financial conditions, geopolitical risks, global growth uncertainty and growing risks from private cryptocurrencies and climate change are cited as the major contributors to the rise in the global, financial market and general risks.

The majority of the respondents saw further improvement in credit prospects for the Indian economy and remained confident about the stability of the Indian banking sector, according to RBI survey which was released on Thursday. Nearly ninety per cent of the respondents assessed that the prospects of the Indian banking sector are likely to improve or remain unchanged over a one-year horizon. The 23rd round of the RBI’s Systemic Risk Survey was conducted in November 2022 to solicit the perceptions of experts, including market participants and academicians, on major risks faced by the Indian financial system. The survey also captured respondents’ perception on risk to financial stability from external sector developments; segments of the Indian financial system — likely to be impacted by aggressive monetary policy tightening by advanced economies and their views on the likelihood of a global recession in 2023. More than half of the respondents assessed that the prospects of the Indian banking sector over a one-year horizon have improved. According to the survey, confidence in the stability of the global financial system marginally declined during the last six months. In contrast, confidence in the Indian financial system further improved with 93.6 per cent of the respondents remaining fairly or highly confident of the stability of the Indian financial system. Whereas, as much as 52.1 per cent of the respondents expected that the Indian economy will be impacted somewhat/to a limited extent from global spillovers. Despite global headwinds posing risks to domestic macro-financial conditions, the impact of external sector developments remained moderate as 53.2 per cent of the respondents perceived it of medium impact, RBI said in the survey. More than three-fourths of the respondents perceived that the aggressive monetary policy tightening by advanced economies would adversely impact the exchange rate, capital flows, foreign exchange reserves and bond yields.

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At Rs 1.50L cr, December GST kitty 3rd-highest ever

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The gross revenue from goods and services tax (GST) rose 15 per cent year-on-year to Rs 1,49,507 crore in December 2022, according to government data released on Sunday. This was the third-highest monthly collection since the tax was introduced in July 2017. Experts feel with this trend, the government will be able to collect through GST more than budget estimate. The government collected Rs 1,29,780 crore as gross GST revenue in December 2021. Of the total GST collected in December, CGST was Rs 26,711 crore, SGST was Rs 33,357 crore, IGST was Rs 78,434 crore (including Rs 40,263 crore collected on import of goods) and cess was Rs 11,005 crore (including Rs 850 crore collected on import of goods), data revealed. Notably, monthly GST revenues have been more than Rs 1.4 lakh crore for 10 straight months in a row now.In November, gross GST revenue collection was Rs 145,867 crore, an increase of 11 per cent over last year’s corresponding month.

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CENTRE BEGINS GIVING FREE GRAINS TO 81.35 CR PEOPLE

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The Centre launched a new integrated food security scheme on Sunday, which would give 5 kg of free food grain per month to 81.3 crore people nationwide. The scheme will provide free foodgrains beneficiaries under NFSA for the year 2023 and aims to ensure effective and uniform implementation of the National Food Security Act (NFSA). The Cabinet decided to launch a new central sector scheme to fulfil the vision of One Nation-One PriceOne Ration under Prime Minister Narendra Modi. This is a commitment of the government to the most vulnerable 67 per cent of the population which is 81.35 crore people covered under NFSA, according to the ministry’s statement. Under the scheme, the government will provide free foodgrains to all NFSA beneficiaries namely Antyodaya Ann Yojana (AAY) households and Priority Household (PHH) persons for one year through the wide network of 5.33 lakh fair price shops across the country, according to the statement of the ministry of consumer affairs, food and public distribution. The decision will strengthen the provisions of NFSA, 2013, in terms of accessibility, affordability and availability of foodgrains for the poor. T h e n e w i nt e g r at e d scheme will subsume two current food subsidy schemes of the department of food and public distribution (DFPD) namely food subsidy to Food Corporation of India (FCI) for NFSA, and sops for decentralised procurement states, which deal with procurement, allocation and delivery of free foodgrains under NFSA.

Free foodgrains will concurrently ensure uniform implementation of portability under One Nation One Ration Card (ONORC) across the country and will further strengthen this choice-based platform. This means the ration card could be used anywhere in the country. The Centre will bear the food subsidy of more than Rs 2 lakh crore for 2023. The new scheme is aimed at bringing uniformity and clarity on food security under NFSA at beneficiary level, the ministry statement said. For implementing this scheme, the ministry had said that the secretary of DFPD had taken a meeting with all state food secretaries on December 29, 2022. The issues related to distribution of free foodgrains were discussed including technical resolutions. All states and Union Territories assured to implement the free foodgrain scheme from January 1, 2023, according to the statement. The government had issued an order to all general managers of FCI to visit three ration shops every day in different areas of their jurisdiction mandatorily from January 1 till 7 and submit a report to the DFPD nodal officer on a daily basis, in the given format for review and taking corrective action. In view of free foodgrains, an advisory is issued to the states/UTs on the mechanism to provide dealer’s margin for distributing foodgrains to the beneficiaries, the ministry said.

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Post 370, investment climate brightens in J&K

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Post 370, investment climate brightens in J&K

After witnessing decades of violence, the Union Territory of Jammu and Kashmir has witnessed tremendous changes in economic activities after the abrogation of Article 370.

After Article 370 was repealed, Jammu and Kashmir became subject to 890 central laws, while 250 unfair state legislation were eliminated. Additional 130 state legislation have undergone changes. The elimination of certain hurdles has led to a conducive business atmosphere. Due to the country’s strong leadership and increased stability in the region, foreign businesses are considering investment opportunities here.

The Lulu Group, Apollo, EMAAR, and Jindal are among the few commercial organizations that have investments in Jammu and Kashmir. The UT has inked five more Memorandum of Understandings (MoUs) with Al Maya Group, MATU Investments LLC, GL Employment Brokerage LLC, Century Financial, and Noon E-commerce, respectively. Magna Waves Pvt. Ltd. and Emaar Group, and Lulu International have also signed a single Letter of Intent.

In 2021, the Union Territory attracted investments of USD 2.5 billion, showcasing the region’s vast opportunities and business potential.

Even Indian Prime Minister Narendra Modi met with delegates from the United Arab Emirates seeking business opportunities in Jammu and Kashmir, noting that private investment bids in the Union Territory have topped Rs 38,000 crore.

The government is fully aware that investments play a crucial role in economic development because they lead to the accumulation of public wealth as well as advancements in science and technology. As a result, a framework for increasing the region’s manufacturing viability and economic growth is established.

The Jammu and Kashmir government established a five-person committee on June 23 to communicate with the Minister of External Affairs regarding the G20 meetings. India is starting to get ready for the big event.

In order to promote fresh investment and bring industrial development to the block level, the J&K administration introduced a new industrial development scheme with an outlay of Rs 28,400 crore in January of last year. The new regulation, valid until 2037, also made it possible for more prominent investors to invest in J-K.

Before the repealing of Article 370, there were not many investments in Jammu and Kashmir.

The Indian government is aware that investments play a key role in the economic development of any region. Hence, it is no letting stone unturned to establish a framework for increasing the region’s manufacturing viability and economic growth.

Infrastructure development in the Union Territory got a big push after the abrogation of Article 370.

After the abrogation of Article 370, the execution of new roads, tunnels and other basic Infrastructure has gained momentum to ensure the overall development of J&K.

Noting that roads are now being built at twice the speed as before, the Lt Governor of the Union Territory Manoj Sinha had said there has been a radical change in its progress under Pradhan Mantri Gram Sadak Yojana.

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Raise retirement age of SC, HC judges: BCI

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Raise retirement age of SC, HC judges: BCI

The Bar Council of India (BCI) in a joint meeting that was held last week has unanimously reached a conclusion that there should be an immediate amendment to the Constitution and the retirement age of Judges of Supreme Court and High Courts.

“There should be an immediate amendment in the Constitution and the retirement age of Judges of High Court should be enhanced from 62 to 65 years and the age of superannuation of the Judges of Supreme Court should be enhanced to 67 years,” stated BCI in a press statement. The copy of the resolution was decided to be communicated to the Prime Minister of India and Union Minister for Law and Justice for immediate action on the resolution, stated press statement by BCI.

Moreover, the joint meeting has also resolved to propose to the Parliament to consider to amend the various Statutes so that even the experienced advocates could be appointed as the Chairpersons of various commissions and other Forums.

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