2019 and beyond - Key highlights

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Financial Inclusion - A potent tool for sustainable growth - Part 2

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The following are the key highlights of the approach paper issued by RBI on National Strategy for Financial Inclusion 2019-2014. Introduction Financial inclusion is increasingly being recognized as a key driver of economic growth and poverty alleviation the world over. Access to formal finance can boost job creation, reduce vulnerability to economic shocks and increase investments in human capital. There has been a growing evidence on how financial inclusion has a multiplier effect in boosting overall economic output, reducing poverty and income inequality at the national level. Financial inclusion of women is particularly important for gender equality and women’s economic empowerment. Definition In Indian context the financial inclusion has been defined as “the process of ensuring access to financial services, timely and adequate credit for vulnerable groups such as weaker sections and low-income groups at an affordable cost”. Vision ...
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Thoughts on FY20 GDP advance estimates - 2

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As I indicated yesterday (see here), the advance estimates of FY20 GDP are at significant variance from the estimates used for the setting budget targets in July. The union budget for FY20 presented in July 2019 has apparently estimated nominal GDP growth at 12.2% for the purposes of calculating deficit and revenue. A 40% lower nominal GDP growth could distort the entire fiscal maths of the government. For example, consider the following: The union budget estimated the central fiscal deficit for FY20 to be Rs7.04trn or 3.3% of the GDP. This implies a nominal GDP of Rs213.26trn. As per the revised estimates, the nominal GDP for FY20 may be Rs204.42trn only. As per the latest reports ( see here ) the actual fiscal deficit of the central government was already at Rs7.53trn (or 3.7% of the advance estimates of GDP) by the end of November 2019. This implies any one or more of the following three scenarios materializing: (i)     The governm...
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Find me a new grocery shop

Many years ago Mr. Kishore Biyani started the business of organized retail of readymade garments. Few years later he expanded his offering to groceries, electronics, furniture, ethnic crafts etc. He grew fast through organic and inorganic methods. He brilliantly assessed the markets and conceived the business formats to suit those markets. Established good quality stores across the country and gave organized retail a strong foothold in the country, before the likes of Tata, Birla, Goenka, Damani and Ambani entered in the fray. However, business of Mr. Biyani always remained in stress. Lot of hopes were raised when he reorganized his business post global financial crisis by selling his flagship Pantaloon format to Birla and rechristened his business group as Future Group. However, as I understand, inventory and financial mismanagement always kept the group under stress. For some years it was very clear that Mr. Biyani will have to materially dilute his stake in the group to mitigate...
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