M.R. Venkatesh is a Chartered Accountant who addresses the Business concerns relating to Economic Policies, International trade and Business strategies.
M. R. Venkatesh passed Chartered Accountancy in 1992 with an all India Ranking and has been in active practice since 1993 as partner of GSV Associates, Chartered Accountants, Chennai.
Thursday, 20 November 2014
Contrary to popular belief, Indians have been saving more post liberalisation.
In an unprecedented move, the global rating agency Standard & Poor downgraded the US Government’s “AAA” sovereign credit rating to “AA+” while keeping the outlook negative. That was in August 2011.
That in turn triggered massive convulsions in financial markets across countries, including India. Terming the situation as “grave” the then Finance Minister [FM] Pranab Mukherjee commented: “There are difficulties and some sort of a crisis. But there is no need to press the panic button.”
Crucially he added: “I do not want to worry unnecessarily. Our growth story is intact and our fundamentals are strong.”
The US downgrade is merely a context. Come any crisis, war or natural; economic or political, Indian economy has been by and large insulated from such negative developments. Indian economy is largely insulated from such crisis; the fundamentals of Indian economy are strong and by and large the Indian growth story is intact.
Are all these empty rhetoric? Or do these reflect undebated aspects of Indian economy? If the economic fundamentals of our economy are indeed strong why then express concern in the first place? Why national consternation when the stock markets gyrate on such negative developments?
Monday, 17 November 2014
At the core of the imbalance in our Central Budget is the interest bill arising out of a gargantuan borrowing program that has lasted well over three decades. Readers may be shocked to note that for every Rupee spent by the Central Government, approximately one-fourth is only on interest.
Thursday, 06 November 2014
Regulatory oversight allowed illicit money transactions in our financial markets.
The Writ Petition filed by the NDA Government in mid-October consists of two parts. The first part deals with the issue of Double Taxation Avoidance Agreement [DTAA], the information obtained from Liechtenstein through Germany and confidentiality obligations of Indian Government under the said DTAA.
I had dealt extensively on this issue in my article titled “Black Money Issue degenerating into a farce?”
The second part relates to the proposed Inter Governmental Agreement [IGA] with USA. Under the proposed agreement, “information” provided by financial institutions in India will be automatically transmitted to USA with reciprocal obligations for financial institutions in USA to transmit “information” to India.
Now, two questions arise: what constitutes “information” and two, why should such information exchanged be treated as “confidential.”
Tuesday, 04 November 2014
Why this extensive charade in the first place that ensured that the Modi Government ended up with egg on its face?
It was just a fortnight back when it seemed everything was going well for the NDA Government. The Prime Minister had well and truly settled in office. His cabinet colleagues were slowly but surely getting on top of their Ministries. Whatever was left of the Opposition was pulverised by the average voter as evidenced by the recent election results in two States that went to polls.
Inflation was heading southwards. Business optimism was returning, albeit slowly. Green shoots were definitely visible. Pink papers shed their usual paranoia and began to talk purposefully. Even critics of the Prime Minister were grudgingly approving of him and his Government. Internationally, the PM was seen as a new star of Asia and not merely of India.
But the NDA Government suddenly seemed to be possessed by a death wish. In a move that would shame a Kamikaze warrior, the NDA Government, inexplicably and without any provocation, filed a writ in the Hon’ble Supreme Court last fortnight seeking to hold back the names of those who had bank accounts in tax havens.