Today I saw, Mr. Adi Godrej (Godrej Industries) on a TV Channel saying that he is very bullish on India’s prospects. In fact, he mentioned about a possibility of India growing at double digits in the next year or in the years to come. Made me think. So here’s my take :
IMF had predicted a 7.6% growth for India in 2016-2017. This became 7.1% due to demonetization. (real numbers we will get to know by end of the fiscal) If you look at the entire global economy, there are so many volatilities that 7.1% also seems to be an impressive rate of growth. But the best is yet to come, I believe, for the following reasons.
- Demonetization – Blessing in Disguise.
The government has made a bold move to discontinue old currency to curb black money from the system. This has opened the skeleton box of unaccounted money and brought it to the limelight. Of course, all of the unaccounted money is not out, but it’s a boon for the hardworking Indians who pay taxes.
- Cashless Society
This is the corollary of the above. The government is pushing all Indians towards a cash free society (in turn leading to less of unaccounted transactions and ease of use) All those who have a mobile phone are eligible to benefit from this move. Also now all transactions can be monitored to the last penny. India has already employed Aadhar (The largest digitization of a nation on the planet) and 90% of people (who have Aadhar) till now can be benefitted by this (for example, a person can easily open a bank account with his Aadhar details)
With GST (likely to be implemented from July 2017 onwards) there will be one single umbrella of the tax man making it easier to transact for any particular situation. Today, the taxes are so complex and there are also loopholes (legal) which people tend to use to avoid taxes. GST will hopefully put an end to this. It’s very unfortunate to note that a majority of the people do not pay taxes. GST will make them willing contributors – at least that’s the aim. However, the devil is in the details. The implementation will show us where the rubber meets the road.
- IT industry smiling even when things are looking uncertain.
India is an exporter of IT products and people. With US being 60% of its revenue, 30% from Europe and 10% remaining, it’s true that when US sneezes, the world catches a cold. However, with the recent changes in US (Cap on H-1B’s, immigrants etc) things may look a little uncertain. The India IT companies are addressing the risks bravely. For example, employing Americans on-site. The start up phenomenon in India is rising. Soon, there will be lot of products for local consumption, as in the past also, there have been many. On an average, a company spends 12-15% of its revenues for digitization. This discretionary spend is likely to increase in the coming years. Non-IT companies will start gobbling up IT companies for competitive advantage. Although the number of startup’s incubating in India (every year) is 10% of its US counterparts, this is likely to improve.
- Global uncertainty
This boils down to two things :
- Natural Phenomenon
- Phenomenon created by us
While the formal is not under our control, we can take remedial steps. For example, if there is a tsunami, we can’t do anything, except to take precautionary measures. The turnaround time to counter such disasters has to come down. So much so that, we should aim for zero casualities. If we stand united, we can achieve this. – using technology.
The second aspect is man made – for example vandalism, killing and other atrocities going under the guise of different names. Have you noticed that the media is also spreading negative news faster than the ones which are positive. My humble request to all those disturbing the peace of the planet – please stop.
India, although being the spiritual capital of the world, has maximum number of blasts in a country, not seen anywhere in the world. My head hangs in shame. The world has to become a better place for everyone and India can show the way. Towards happiness – towards pleasantness – towards fulfillment – towards liberty – for one and for all.
And this truly would be the double digit growth that we are aiming for !!!