Raj Kumar, R. (2017, May 19) Hindustan times Retrieved from http://www.hindustantimes.com Rakesh, D. (2017, August 29) Fact check Retrieved from https://factly.in/sectors-fdi-allowed-india.com General Knowledge today (2017, August 31) Retrieved from https://currentaffairs.gktoday.in
Reserve Bank of India (2017, February 13) Retrieved from https://www.rbi.org.in
Department of Industrial Policy and Promotion (2017, March 17) Retrieved from http://dipp.nic.in/foreign- direct-investment/foreign-direct-investment-policy
Recent reforms in Taxation, Real estate & Banking sectors in India Impact Factor SJIF 2016-6.177
REFORMS IN BANKING SECTORS: DEMONETIZATION, DIGITALIZATION & BANK ASSURANCE
Shardul Dilip Shah- Research Scholar JJT/2K9/CMG/591
On 8 November 2016, the Government of India announced the demonetization, commonly called notebandi, of all ₹500 and ₹1,000 banknotes of India. The government claimed that the action would curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activity and terrorism. The Indian government had demonetised bank notes on two prior occasions—once in 1946 and then in 1978—and in both cases, the goal was to combat tax evasion by "black money" held outside the formal economic system.In 1946, the pre-independence government hoped demonetisation would penalise Indian businesses that were concealing the fortunes amassed supplying the Allies in World War II. In 1978, the Janata Party coalition government demonetised banknotes of 1000, 5000 and 10,000 rupees, again in the hopes of curbing counterfeit money and black money. By and large, international response was positive which saw the move as a bold crackdown on corruption. International Monetary Fund (IMF) issued a statement supporting Modi's efforts to fight corruption by the demonetisation policy. Chinese state media Global Times praised the move and termed it as "fierce fight against black money and corruption."Former Prime Minister of Finland and Vice-President of European Commission Jyrki Katainen welcomed the demonetisation move stressing that bringing transparency will strengthen Indian economy. BBC's South Asia Correspondent Justin Rowlatt in his article praised the move for its secrecy and success and elaborated on reason behind demonetisation. Tim Worstall termed the demonetisation as welcome macroeconomic effect in his article in Forbes magazine.Swedish Minister of Enterprise Mikael Damberg supported the move by calling it bold decision. Singapore-based paper The Independent published a laudatory article on the move titled "Modi does a Lee Kuan Yew to stamp out corruption in India." Lee Kuan Yew was the Singaporean Prime Minister and is considered the architect of modern Singapore. "From making up his mind to rolling it out, a new Lee Kuan Yew is born in India.
In the first four days after the announcement of the step, about ₹3 trillion in the form of old ₹500 and ₹1,000 banknotes had been deposited in the banking system and about ₹500 billion had been dispensed via withdrawals from bank accounts, ATMs as well as exchanges over the bank counters. Within these four days, the banking system has handled about 18 crore transactions. The State Bank of India reported to have received more than ₹300 billion in bank deposit in first two days after demonetisation.A spike in the usage of debit card and credit card post demonetisation was also reported. Between November 10 and November 27, 2016 banks reported exchange and deposits of demonetised banknotes worth ₹8.45 trillion (exchange of ₹339.48 billion and deposits of ₹8.11 trillion ). During this period, an amount of ₹2.16 lakh crore had been withdrawn by people from their accounts. In Malda, a district believed to be a transit-point for fake Indian currencies,a large sum of cash deposits in dormant accounts were also reported. According to The Economic Times, more than 80 percent of fake currency in India originates from Malda district in West Bengal. The demonetisation was initially seen by some sources as a significant step towards making India a cashless economy.Prime Minister Narendra Modi appealed to Indian population in his radio address in Dec 2016 to go cashless with slogan - ‗Less-cash‘ first, ‗cashless society‘ next. More people began using cardsand e-wallets, and the demand for point of sales (POS) or card swipe machines increased.This led to the acceleration of installation of POS machines. According to data of Pine Labs, the demand for its POS machines doubled after the decision. The company stated that the debit card transactions rose by 108% and credit card transactions by 60% on 9 November 2016.
Recent reforms in Taxation, Real estate & Banking sectors in India Impact Factor SJIF 2016-6.177
Several e-commerce companies hailed the demonetisation decision as an impetus to an increase in digital payments, hoping that it would lead to a decline in COD returns which could cut down their costs. In December 2016, the government launched an app called BHIM (Bharat Interface for Money) based on the Unified Payment Interface.In September 2017, Google launched its first India-only banking app using BHIM called Google Tez that can be used by customers of over 50 banks on the UPI platform, and is available in several Indian languages. Both the Immediate Mobile Payments System and the United Payments Interface, which support instant payments using mobile phones, have grown substantially since demonetization, even as cash has returned to the economy. Digital India is a campaign launched by the Government of India to ensure that Government services are made available to citizens electronically by improved online infrastructure and by increasing Internet connectivity or by making the country digitally empowered in the field of technology. It was launched on 2 July 2015 by Prime Minister Narendra Modi. The initiative includes plans to connect rural areas with high-speed internet networks. Digital India consists of three core components. They are:
1. Development of secure and stable Digital Infrastructure 2. Delivering government services digitally
3. Universal Digital Literacy
Some of the facilities which will be provided through this initiative are Digital Locker, e-education, e- health, e-sign and national scholarship portal. As the part of Digital India, Indian government planned to launch Botnet cleaning centers. Digital Locker facility will help citizens to digitally store their important documents like PAN card, passport, mark sheets and degree certificates. Digital Locker will provide secure access to Government issued documents. It uses authenticity services provided by Aadhaar. It is aimed at eliminating the use of physical documents and enables the sharing of verified electronic documents across government agencies. Three key stakeholders of Digi Locker are Citizen, Issuer and requester. attendance.gov.in is a website, launched by PM Narendra Modi on 1 July 2015to keep a record of the attendance of Government employees on a real-time basis.This initiative started with implementation of a common Biometric Attendance System in the central government offices located in Delhi. MyGov.in is a platform to share inputs and ideas on matters of policy and governance. It is a platform for citizen engagement in governance, through a "Discuss", "Do" and "Disseminate" approach There is a World Bank report which says that a 10% increase in broadband penetration (in India) can lead to a 1.4% increase in Gross Domestic Product, making Internet important for enhancing the growth of the economy.‖ In India, Google has so far made 120 railway stations Internet-enabled, through a partnership with Indian Railway Catering and Tourism Corp. In two to three years, about 600 million Indians will access internet through broadband The government has launched a National Digital Literacy Mission that has penetrated rural areas under the initiative, 8.2 million people have already been trained by 2016, surpassing the target of NDLM training 5.2 million by 2018 In 2017, GDP growth is flat, internet growth is down by 40%, population growth (rate is down) by 50%, smartphones growth is -65%, but internet user growth in India is at 40%. This trend is a confirmation that mobile has become the first source of accessing Internet in India, skipping computers or laptops. More than 12,000 rural post office branches have been linked digitally and soon payment banking would also become a reality for them. The government also plans to make ‗digital village‘ across the country, by linking all schemes with technology. The ‗digital village‘ would be powered by LED lighting, solar energy, skill development centres and e-services like e-education and e-health According to analysts, the Digital India plan could boost GDP up to $1 trillion by 2025. It can play a key role in macro-economic factors such as GDP growth, employment generation, labor productivity, growth in number of businesses and revenue leakages for the Government. There is still a huge economic opportunity in India as the tele-density in rural India is only 45% where more than 65% of the population lives. Future growth of telecommunication industry
Recent reforms in Taxation, Real estate & Banking sectors in India Impact Factor SJIF 2016-6.177
in terms of number of subscribers is expected to come from rural areas as urban areas are saturated with a tele-density of more than 160% A digitally connected India can help in improving social and economic condition of people through development of non-agricultural economic activities apart from providing access to education, health and financial services. However, it is important to note that ICT alone cannot directly lead to overall development of the nation. The overall growth and development can be realized through supporting and enhancing elements such as literacy, basic infrastructure, overall business environment, regulatory environment, etc. The government recently announced an unprecedented mega Rs 2,11,000 crore plan for recapitalisation of the PSU (public sector undertaking) banks in a bid to push growth and and create jobs. While Rs 1,35,00 crore will be in the form of front-loaded recapitalisation bonds, the remaining Rs 76,000 crore will be in the form of budgetary support. Non-performing assets of banks have increased from Rs 2.75 lakh in March 2015 to Rs 7.33 crore as on June 2017 In addition to repairing their balance sheets, the banks also need crores of rupees in new capital to meet global Basel III banking rules, due to fully kick in by March 2019. Fitch Ratings estimates Indian banks will need $65 billion ( Rs 4.23 lakh crore) of additional capital by March 2019 to meet Basel III global banking rules. Moody's expects the top 11 state lenders alone will need nearly $15 billion (more than Rs 97,500 crore). Banks which were meant for deposits, loans and transactions are allowed to provide insurance policies to people and this feature of bank is called ‗bancassurance‘. With growth in number of middle class families in the country, RBI recognized the need of an effective method to make insurance policies reach people of all economic classes in every corner of the nation. Implementing bancassurance in India is one such development that took place towards the cause.
Reference
The Times of India, www.timesofindia.com Digital India, https://mygov.in/group/digital-india/ www.digitalindia.gov.in
Recent reforms in Taxation, Real estate & Banking sectors in India Impact Factor SJIF 2016-6.177