Is India shaping enough with the new Government?

Updated: Dec 23, 2019


Piketty’s latest findings on India’s income distribution suggest that income inequalities have been rising systematically since the 1980s. Hence, the bottom 50% of India’s population today accounts only for 11% of the total national income whilst the top 10% accounts for 29% of the national income.

In short, rich is getting richer while the income distribution still remains a key issue among the rest. Some efforts of the current Government have been demonetization (instant decommissioning of 500 and 1000 rupees notes and bringing in new dimension currency notes) and introduction to GST (a new taxation regime of goods and services in order to normalize the taxation throughout all States in the nation). While the former is well appreciated as an instant curb to black money in circulation in the system, implementation of both demonetization and the GST have had lot of critics and painful activities for common man as well as elite. Black money racket is a parallel economy that runs along with the visible economy. A sudden impact to it has caused social unrest ( a topic less written about ). While the GST has inflicted pain in the form of new documentation and procedural changes to hands-on taxation filing process with little clarity.

"Make In India" rule was also introduced by the new Government: any product sold by foreign companies will have to be manufactured / built within the country. Long term I believe this will be a great change, something similarly introduced by the US government too. However, as an immediate impact various export / import operations have had difficulty to produce products within India.

Another topic to briefly mention is the shutting down of various Power plants which generate power from coal. Earlier administration promised cheap coal while prices were kept steady by new Government there by leading to temporary dormancy of new Power Plants/ Facilities. Another cause of unrest in the industry.

Above is a summary of readings and discussions I have had with individuals recently. All is not gory by any means. Things are equally rosy. Read my recent article Project Finance for some positive vibes.

I recently visited a 600 crore Rupees Boeing MRO (Maintenance Repair Overhaul) in central India SEZ (Special Economic Zone). A massive set-up functional since 2015 and as I stepped in one of the bays there was Air India Boeing 777 SR100 aircraft getting its complete overhaul by the technicians. Imagine a car service center multiplied by a huge number! Just besides this gigantic set-up an equivalent facility is under construction which will soon be operational. Talking to few executives here, some unthinkable scaled facts came into consideration. This huge world- class- high- tech facility is standing today because of the investments by our new Government. I am guessing there are several similar that have been arti-faced in other regions within the nation.

So yes while one class / industry is unhappy with the Government, the other is happy, Overall balancing out the extrapolation efforts from a single State to the entire Nation. I am with it!

#FAQ #NIFTY

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