FM on Economy
- Sitharamanji: need to have a “holistic” approach to handling the economy instead of a “silo-based and myopic approach with blinkers”
- The government is looking at various ways to provide support to the economy and a fiscal stimulus is possible.
- Economic activities are reviving though it is too early to tell if the uptick will sustain.
- Government was not waiting for the Covid situation to improve before taking more measures.
- On the issue of interest waiver on loan moratorium, she said the Supreme Court has been informed that a report from a committee headed by former Comptroller & Attorney General Rajiv Mehrishi is being studied.
- Indian startups are up in arms against the Google Play Store for forcing apps with in-app purchases to use its “expensive and unaffordable” billing system.
- Google levies a 30% commission against 1.5-2% levied by external gateways.
- While the policy has always been in place, it’s only now being enforced in India.
- This will affect dating, education, video and music-on-demand, and other apps that rely on in-app purchases but not those for physical deliveries such as ecommerce.
- The startups say it’s unfair exploitation of the Play Store’s monopoly that stems from the dominance of Google’s Android operating system.
- Google has control over many layers between customers and their service providers as more than 90% use Android phones, the Internet and Mobile Association of India (IAMAI) said in a release.
- It should allow a level playing field for everyone in the ecosystem.
- Government has notifed changes to the Companies Act
- Corporate offenders will no longer have to face imprisonment for procedural, technical or minor offences.
- Decriminalisation – ease of doing business initiative
- Some 48 sections of the Act have been decriminalised and 23 of the remaining 66 compoundable offences can be dealt with by an in-house adjudicating mechanism.
- Total penal provisions under the Act have been brought down to 124 from 134 earlier.
- Fines for various offences have also been brought down in the latest set of changes.
- The amendments allow companies to go in for direct overseas listing.
- However, the government will have to specify the class of companies that will be allowed to list overseas along with the permissible foreign jurisdictions.
- The amendments also removed the requirement of instituting a corporate social responsibility (CSR) committee for companies whose CSR obligation is below ₹50 lakh per year.
- Additionally, companies can roll over surplus CSR spends for the year.
- The ministry of corporate affairs (MCA) has allowed companies to conduct board meetings through video conferencing or other audio visual means till the end of this year while it extended the deadline by three months for independent directors to register with its online data bank.
- The new deadline is December 31.
Abhijit Banerjee on Indian Economy
- Nobel Laureate Abhijit Banerjee – India is among the worst performing economies in the world and the government’s economic stimulus was inadequate to tackle the problem.
- The country will see a revival in growth in the July-September quarter of the current fiscal.
- Banerjee said the country’s economic growth was slowing down even before the COVID-19 pandemic hit as real GDP growth had moderated from 7 per cent in 2017-18 to 6.1 per cent in 2018-19 and 4.2 per cent in 2019-20.
- Goldman Sachs has sharply cut its 2020-21 GDP forecast to a contraction of 14.8 per cent.
- Fitch Ratings has also revised its forecast to 10.5 per cent contraction.
- The stimulus measures “did not increase consumption spending of lower income people as the government was not willing to put money in the hands of the low income population”, he explained.
- The eminent economist noted that India needs to be globally more competitive.
- “We have not really created infrastructure for the small entrepreneurs to flourish,” Banerjee pointed out.
- Banerjee pointed out that India does not have insurance schemes for agricultural disasters.
- Indians are obsessed with public sector jobs, he said adding that there is a need to make those jobs less lucrative.