2016: YEAR  OF  KARMA FOR  INDIA

Past actions decide our future. I am not talking about any individual but a country of 1.25 crores. The year of 2016 will carry forward the actions of the past years especially the year that just went by. Not passing GST, land acquisition and Bankruptcy bills will make us play defensively in international arena. In the times of 20-20 cricket, time is money, the more we loose it, the more we will bat on the back foot. GST would increase GDP by about 1.5% by simplifying tax structure; land acquisition bill would give the required thrust for investment in infrastructure sector and stuck capital would be freed up for productive assets by passing bankruptcy bill.  Though things would still go on but passing of these legislations last year would have given us the requisite protective gear to face aggressive foreign players in our domestic financial markets.  

Mixed signals such as shrinking core sector and increasing car sales ask for harmonizing economic and legal structure of our economy by passing these impending bills. After eight months of this fiscal (2015-16), tax collections are buoyant with non tax revenues already above 78% of budgeted amount and total tax collections crossing 50%. Fiscal deficit position is also comfortable at 87% of the target without cutting capital spending which was 72.5% of the budgeted plan by November end last year. Forex reserves of $ 352 bn are large enough to cover 11 months imports. As Christine Largarde had said, judging by India’s cricket record, collective efforts of one billion working population can make India fly in the years to come. Thus what we need in 2016, is karma from our elite political class and making the pitch ready for the economic variables to perform without local systematic risk to take its toll and spoil India’s chances of being becoming an important player in the world economy.