Year 2050- Emergence of a Trilateral World Economy?

The Global Economy, for the next 40 years is to be carried by the B.R.I.C. countries and Mexico alone. But on a deeper look, we find a stunning fact, an Emergence of a World economy governed majorly by 3 economic mammoths- namely China, United States and India. An article: "The G-20 in 2050" published in the November Bulletin in the Carnegie Endowment for International Peace states that China, U.S. and India will emerge as the three largest Economies of the world.

The fact that this statement has a great amount of truth can be obtained in recent growth-rates of China at 9% per year. It has been estimated that, given present trends as they are, China will emerge as the largest economy in the World by 2032 and grow 20% larger than the U.S. economy till 2050. India will become the 3rd largest Economy in the world by 2050.

Asia is all set to emerge as the carrier of the Global Economic system. Today, 5% of the World Population i.e. the U.S. population accounts for $10 Trillion of global consumption and Asia with 45% of World Population accounts for $7 Trillion of Global consumption. By 2020 Asia will account for $21 Trillion of Global consumption 140% of the U.S. consumption at that time(which will be consuming $15 Trillion).

So, soil is being sown for a fertile 3-sided economy. These three nations would have a profound effect on the Global commercial setup. This surely doesn't mean that other nations would have a lesser role. In terms of Per-Capita Income, Asian countries will continue to be way behind of the developed world. Lets hope to have an Asia that is ahead even in terms of Per-Capita, maybe the beginning has begun.

Economic Boom- the only key to remove Malnourishment?

As per World Health Organization, today hunger is the gravest danger to the World health. Malnutrition is indeed a very big contributor to child mortality. As per World Bank's estimates in 1998, India is the 2nd most malnourished nation with 47% after Bangladesh. In India some major causes are lack of proper delivery system of the P.D.S.(Public Distribution System), lack of hygiene and sanitation facilities to majority of population, status of women, etc.
The World Bank has clearly stated that India, despite being the 2nd fastest growing economy in the world, after China, is still "one of the most malnourished nation in the world". India's N.F.H.S.(National Family Health Survey) said that India has 46% of its children(below 3 years old) underweight and 38% stunted. Malnourishment is highest among the scheduled tribes and castes with 54% of them being malnourished. As per U.N. one of the key cause of undernourishment in India is Low Birth Weight(LBW) and 30% of the children are born under this category.
The I.C.D.S.(Integrated Child Development Scheme) has razor-sharp difference in intentions and implementation. Even the mid-day meal schemes that have been introduced maybe efficient in educational terms, but fails at the nutrition front, as said by the World Bank. India, right now aims at an easy 6-6.5% growth rate, being the 4th largest economy in the world in terms of GDP, is still not healthy at the SOCIAL INFRASTRUCTURE front.
In rural India or say the Bharat, it is really worrying to find that even one member of a family falling ill is enough to sink the poor families in a vicious circle of debt and further poverty. Thus our Economy's growth is not at all reflecting a positive RURAL UPLIFTMENT especially at the health front. Our Government though really working hard for nation's growth must always remember those 3 golden words: HEALTH IS WEALTH.

Union Budget 2009: Major Direct Tax Reforms

The important and noteworthy changes in the Direct Tax structure are as below:
On an in-depth analysis of the Direct Tax reforms made by Mr. Mukeshbhai(Direct Tax consultant and expert), the current 2009 Budget reforms consists of "Ironical contradictions and missed opportunities".
Let us first know some essential points here. Firstly, out of the total expenditure being made by the Government, 30% is Plan Expenditure and rest 70% is Non-Plan Expenditure! An expectation of a 20-20 inning was expected by the nation, but it seems, 50-50 hasn't vanished away till now! Following are the points I have deciphered on this topic:
1). Taxation is a KEY to make an "aam aadmi" happy, an Income Tax exemption limit is such that it makes out to be a saving of Rs. 1000/year for general citizens an Rs. 1545 for Senior citizens. Come on Pranabda, an increament of Rs. 4/litre of Petrol will make them spend many a 1000 bucks in a year!

2). Fringe benifit Tax has been removed, a good move indeed.

3). As per CBDT(Central Board for Dirct Taxes), Wealth Tax collection was Rs. 400 crores last fiscal(125 of total Direct Tax revenue). Do we really need to undertake so complex processes to collect a tax of just 300-400 crores?

4). A lack of REAL-TIME relief is there. Educational sector could have been given a relief by reducing the interst rates on students' loan.

5). MAT(Minimum Alternative Tax), mainly formed to make the once-popularly known "Zero Tax Companies", has been increased to 15%. Is it justified? See, it was first started at 7.5%, then increased to 10% and now a jump to 15%!

Thus, majorly these are the areas I felt I shall share it with my readers. Growth was a goal, these reforms are somewhere obstructing that goal. Let us hope, the road map made here in the Union Budget, turn out to be better in terms of efficiency and relief. Some points further, I would lik to share are that the Surcharge has been removed, L.L.P.(Limited Liability Partnership) has newer reforms good enough for now atleast. And lastly, it should now be noted that you may not have a "PEN" but you certainly must have a "PAN"(card). Lets hope for a brighter future. Do share your views.

India's urgent priority: Micro Finance Institutions

Micro Finance Institutions(MFIs) are those crucial components of the Financial Markets that reach the poor of the last resort and help him/her alleviate from a De-financed state to a financially healthy state. In developing nations like India, MFIs are a boon. It is so because they help the credit mechanism reach the monetarily deprived section, especially in remote rural areas.
Government also keeps on bringing varied schemes to provide finance facility to the poor to help them unleash the potentiality of the rural markets. Now, if we look at the current MFI scenario of India, the outstanding loans amount to around 80million, some might have taken multi-loans, so the total beneficiaries' round about to 60million. Still, this is more than the 55million households in rural areas and more than a quarter of the 220million households in India. This shows how well these institutions can reach a given class of society.
Further, MFIs provide loans at about 30% interest, it may sound quite exorbitant but only till the point we come to know that moneylenders charge 50% interest rates along with harsh methods of receiving back the money, some even make the borrowers laborers till they pay off their debts! The most essential component of MFIs is that it embarks Women Empowerment in the culturally rigid RURAL SOCIETY where Male dominance and oppression is at peak. These MFIs provide loans ranging from Rs. 3000 to Rs. 15000 at 30% interest to a group of people, including women which help them to become self-dependant.
Women thus, can go further and initiate small scale economic set-ups to earn money. This has sigificantly reduced the male dominance in such areas. Bangladesh initiated this concept and today a large number of women have become self-reliant and the fertility rate has also come down there. The high rates are due to the fact that managing small-amounted loans is much more costlier than bigger, urban loans.
The Nationalized banks provide finance to MFIs which inturn provide it to the rural population. Some examples of MFIs are Arohan in Kolkatta, Sonata in Allahbad, etc. The centre needs to recognize the emergence of these institutions and provide greater support to them. Lets hope that Micro Finance firms grow further and emerge as change-makers in the large rural society of India.

Union Budget 2009-10, Major Indirect Tax Reforms in Textile sector.

Hello everyone. Hereby I deliver my readers an analysis of the proposed changes related to the Textile Sector. Pranabda's Budget has proposed to increase the Planned Allocation to Rs. 4500crore from Rs. 4090crore last Fiscal. Rs. 3140crores has been allocated to TUFS(Technology Up-gradation Funding Scheme), its a scheme that aims to spur modernization and more investment in this sector. Firstly lets know about the proposed changes in the INDIRECT TAXATION related to Textile products. If we deeply introspect, we shall find that no big changes have been made here. The DUTY STRUCTURE as per my research:

1). Excise duty on NAPHTHA reduced to 14%. A good move indeed. Electricity producers were demanding this since a long time.

2). Excise duty on some Textile chemicals namely Man-made fibres is as below:
-Polyester's E.D. again brought to 8% from 4% last Fiscal.
-Latex rubber thread's E.D. increased to 8%. It is widely used in Garment Industry. Thus, the price of related Garments is soon to hike.
-CENVAT credit has been given as a benifit and on a counter move, E.D. on Cooton yarn expanded to 4% from 0%.

3). Excise Duty REDUCED ON following:
-LCD(Liquid Crystal Display) plates.
-Mobile items.
-Luxury cars.
-LPG(Liquefied Petroleum Gases).

4). Custom Duty REDUCED ON:
-On 9 specified drugs, Custom duty is reduced. This will make these commodities dearer by 10-15%.
-On branded Jewelry.

5). Custom Duty increased on Gold, to make Gold, Golden!

6). Service Tax regime not to be levied on Manufacturing
This is an analysis of Major Indirect Tax analysis, if you have any views to share or additions to this data, you are welcomed with utmost gratitude. Enjoy the Analysis.

"Union Budget 2009-2010" Analysis: Major Drawbacks,

Firstly, a warm hello to all. Here is my Analysis of the Union Budget. Talking by a Macro Level perspective, our Economy is currently facing a 6.8% FISCAL DEFICIT that need to be covered quickly.
As expected by the Economic Survey 2008-09, Mr. Pranab Mukherjee was expected to raise atleast Rs. 25000crores through Disinvestment. But certainly only Rs. 11.2Million has been proposed to be borrowed from the Mammoth Private players. This depicts a strong attack on "short-term" goals rather than "long-term" vision. Thus, here comes the need to raise debt from the Financial Market.
The BIGGEST DISAPPOINTMENT Pranab babu's Budget has created is Lack of any clear-cut reforms on FDI limits, Financial Sector Reforms, Opening of the Coal Sector to Private players and the most crucial one, Disinvestment of PSUs(Public Sector Units). Still as the Budget Speech clearly stated, "a Single Budget cannot solve all our problems, nor is the Union Budget the only instrument to do so." Thus, as Pranabda told that Disinvestment Policy shall be finalized in the Winter Session of Parliament, we hope to see Disinvestment soon.
Another step that seems good but has no strong effect is the removal of CTT(Commodities Transaction Tax). It was announced in the Budget of 2008-09 by the then Finance Minister P Chidambaram. Its rate was 0.017%(Rs. 17 on Rs. 1Lakh's transaction). Though the entire Commodity Industry expresses its happiness on its removal, I personally feel that it doesn't make any "Revolutionary" move(as was expected). I feel so because this tax wasn't yet implemented also, thus it provides a relief from a "never faced difficulty"! Still I'll discuss other aspects too.