Showing posts with label Indian Economy. Show all posts
Showing posts with label Indian Economy. Show all posts

Saturday, 1 February 2014

How to identify notes issued prior to 2005



In an effort to completely wipe out black money from the country, the Reserve Bank of India has taken a stern measure. It has decided to withdraw all currency notes issued before 2005 from the economy. All notes with denomination Rs. 5, Rs. 10, Rs. 20, Rs. 50, Rs. 100, Rs. 500 and Rs. 1,000 comes under the ambit of this announcement.
But, with the declaration of this news, common public has gone into a haywire and is a bit confused about the use of such notes. Different questions are arising in the mind like how to identify the notes issued prior to 2005? Or How to exchange the existing currency notes that are already lying?
Reading this piece, you will be able to solve all your queries related to the currency notes issued prior to 2005
All the notes that are issued before 2005 do not have the year of issue printed on it. Take a note, turn it’s back and look at the bottom of the note. You will see the year printed on it. To make things easier for you, I have given the pic below(see the circled area) which which shows the year 2011 printed at the bottom of it. 


If you find that there is no year printed ,or the year is prior to 2005, then you need to exchange your note as soon as possible.
The next obvious question that will arise in your mind is “Where will I exchange my old currency notes?”
Do not panic, if you have a note prior to 2005. As per a press release by Reserve Bank of India – You can exchange your notes at any of the banks after 1st April, 2014. Both the private as well as public sector banks will have a dedicated exchange where you can exchange your old currencies with the new ones. Remember, if you have a stock of old notes lying with you, make sure that you exchange them within 30th June,2014.

Wednesday, 6 June 2012

The Ailing Indian Economy and the way to revive it!!!


 Last week the announcement of GDP figures of the Indian economy sent shockwaves in the stock market. The market which was already paralyzed with the rising fiscal deficit, current  account deficit and the rupee’s fall deteriorated further. The  Finance Ministry as always is blaming the global factors that is the Eurozone crisis for the falling economy.But are the Global factors solely responsible for the downgrading of Indian Economy.Let us find out. There are various austerity measures which the Government Of India can introduce in order to bring the ailing economy back on track rather than blaming the Euro Crisis.Let us discuss each of them:
1.High current account deficit:Current account deficit means that the imports of a country is more than its exports.India imports Crude oil and Gold.The current account deficit in India is almost about 4% of the GDP and it has been on a rising spree.In India Oil is decontrolled ,it means that whatever profit or losses arises it goes directly to the Oil companies.Rising of the Oil prices are the only means by which the Government can get more money and hence the people have to co-operate with the government to a certain extent.
2.Decline in the Investments:With the announcement of the introduction of GAAR last month by the finance ministry the foreign investors lost their faith and as result there was a huge drop in the foreign inflow of funds,however later the government withdrew its decision.Now the solution to this is that the Government  instead of introducing GAAR should encourage  the QFIs to invest more.QFIs are qualified foreign Institutional investors,they are a  resident of a country and is a member of the Financial Action Task force(FATF) which inturn is a member of the global body against money laundering.In addition to it they are registered under SEBI(Securities And Exchange Board Of India) and can invest in all the important segments of the Capital Market that is mutual funds,equities and corporate debts.
3.Managing Fiscal Deficit:The excess of government expenditure over its revenues is termed as Fiscal Deficit.This year the fiscal deficit is 5.9% of the GDP.Acoccording to the Provisional estimates released by the Controller General Of Acoounts the fiscal deficit for the year 2011-12 was 5.09 lakh crore against 5.21 lakh crore revised estimate presented in the Budget.A deficit of 3% of GDP is seen as sustainable.The Government had enacted the FRBM Act (Fiscal Responsibility And Budgetary Management) in the year 2003 mainly with the objective to eliminate revenue deficit by the year 2008-2009 but over the years the fiscal deficit has risen.Now the solution to the problem lies in the fact to continuously monitor that wheather the various programmes and projects which is introduced by the Government is implemented properly at the grassroot levels.One such example is NREGA(National Rural And Employement Guarantee Act) which was introduced by the government mainly with the objective of providing 100 days employement to those people of India who live below the poverty line.Just a year after it was implemented there were complaints from various states that most of the engineers eat the money and at the end the poor are left with nothing.

4.Rupee depreciation: The rupee depreciated to 56 a dollar this year, helping only the IT companies to splurge their revenues. There has been a 20% depreciation in rupee against dollar since early 2011.The solution to the problem lies by issuing FCCBs(Foreign currency convertible Bonds).Clearing of the FDI decision is also a constraint. The Government should immediately open up fdi in the multibrand retail and the aviation sector as well.
5.High Inflation:The inflation in India is rising at a rate of about 7.23%.The APMC Act(Agricultural Produce Marketing Act) was mainly passed with the objective of regulating the prices of the production and vegetables,but the main problem with APMC Act is that it prohibits city based retailers to buy the produce directly from the farmers.The APMC Act should be immediately be removed so that supply is not a constraint anymore.Another solution to the problem as discussed earlier is the opening up of the fdi to the retail sector.
6.Impending reforms:The GST(General Sales Tax ) should be introduced as fast as possible. Manufacturing sector in India is one of the highly taxed sectors in the world. A complex and high taxation structure has the tendency to render products uncompetitive in the international market or eats up large portions of the cost arbitrage available in manufacturing set-ups in low cost economies such as India. For instance, the manufacturing cost of most products in India is nearly half than in the west. But, the incidence of multistage taxation i.e. customs duty on imports, central excise duty on manufacture, central sales tax (CST) / value added tax (VAT) on sale of goods, service tax on provision of services and levies such as entry tax, octroi and cess by the State or local municipal corporations and related costs such as loss of tax credit, compliance and litigation cost chip away this advantage to the extent of almost 50 per cent.
7.Change in Leadership:Last year the UPA Government has been hit hard with plethora of scams with protests from all over the country.It has been since many years that the UPA government has been ruling in the country.There is a term called Nothing is permenant and the people of India needs to implement that now.A change in the government is needed so that a completely new set of measures,steps can be taken to improve the economy of our country.
                             In conclusion it can be said that India had achieved a growth rate of 8.5%,7.7%,6.9%,6.1% and 5.3% in the past five years.This figures suggests that even in the year 2008 when the world was hit by the HOUSING BUBBLE India’s growth rate never receded.Though this year it has been very different firstly with the false coding of the sugar production the IIP index in February fell down.In the first quarter of 2011-12 the GDP grew by about 8%,followed by  a  fall to 6.7% and 6.1% in the second and third quarter respectively.Well the solution to the problem only lies to the fact that until and unless the Government gets the policies right wheather it’s the spectrum allocation or the fdi it is really difficult to achieve a moderate growth and even sustain it in the long run.