A Statistical Analysis of Indias shirking GDP Growth

Strict nationwide lockdown due to the novel coronavirus (COVID-19) during the first quarter of the financial year 2020-21 has resulted in very limited economic activity in the country during that quarter. As a result, India’s Gross Domestic Product (GDP) for the April-June quarter (Q1) slipped by a sharp 23.9 per cent, as per provisional estimates released by Ministry of Statistics and Programme Implementation (MoSPI) on 31st August, 2020. The GDP had expanded by 5.2 per cent in the corresponding quarter of 2019-20.


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Important announcement for MSME Sector of India by Finance Minister

MSME stands for Micro, Small and Medium Enterprises. India’s MSME base is the largest in the world after China. The sector provides a wide range of services and is engaged in the manufacturing of over 6,000 products – ranging from traditional to hi-tech items. Given the government of India’s ‘Make in India’ push, along with a push to attract greater FDI, the Indian MSMEs sector is poised for rapid growth and integration with major global value chains. In order words, MSMEs are the back bone of Indian Economy.

As we know that Finance Minister Nirmala Sitharaman provided various details on the fiscal stimulus package. The package has some important announcements for MSME sector as well. The purpose of these stimulus packages is to help MSME units restart their production and manage liquidity crises due to COVID 19 outbreak.


Direct Taxation and EPF related Measures as a part of Fiscal Stimulus NEW

PM Modi addressed the nation on Covid-19 crisis and the ongoing lockdown situation five days before the termination date of Lockdown 3.0. He announced an extension of lockdown. He also announced a Rs. 20 Lakh Crore fiscal stimulus for businesses and people at large and said that the details regarding the same will follow soon.

A day after MP Modi’s speech, Finance Minister Nirmala Sitharaman addressed a press conference to provide further details on the fiscal stimulus package. The package has come with reforms in many areas such as Income Tax, EPF, benefits for MSMEs and poorer section of the country. In this article we will focus on Income Tax and EPF related changes.


Policy Reforms by RBI to support Economy

The article provides a brief idea about various rate cuts announced by RBI on 27th March 2020 after the Monetary Policy Committee meeting.

Monetary Policy Committee:

  • The Monetary Policy Committee of India is responsible for fixing the benchmark interest rate in India. The meetings of the Monetary Policy Committee are held at least 4 times a year and it publishes its decisions after each such meeting.
  • The committee comprises six members - three officials of the Reserve Bank of India and three external members nominated by the Government of India. They need to observe a "silent period" seven days before and after the rate decision for "utmost confidentiality".
  • The Governor of Reserve Bank of India is the chairperson ex officio of the committee.
  • Decisions are taken by majority with the Governor having the casting vote in case of a tie.
  • The current mandate of the committee is to maintain 4% annual inflation until 31 March 2021 with an upper tolerance of 6% and a lower tolerance of 2%.
  • The Reserve Bank of India Act, 1934 was amended by Finance Act (India), 2016 to constitute MPC which will bring more transparency and accountability in fixing India's Monetary Policy.
  • The monetary policy is published after every meeting with each member explaining his opinions.
  • The committee is answerable to the Government of India if the inflation exceeds the range prescribed for three consecutive months.


How to Fight Economic Effect of Coronavirus 

A year ago no one knew about Corona. Today, there is hardly anyone who does not know about it. Knowing is one thing. Countries and people face a bleak future in the post Corona devastated world. Apart from social distancing this malignant virus is nuking economics of countries in a way that has never happened before, not even during world wars. Life is grinding down to an excruciatingly painful slowdown. Stock markets have crashed to abysmal lows and the end is not in sight. Severe restriction on movement drastically affects daily wage earners. The economic effect of coronavirus is projected to have a ripple effect in the time to come. UNCTAD estimates the world as a whole will suffer a loss of over $ 1 trillion and that is a modest estimate. Even cryptocurrencies are bottoming out.


Corporate Social Responsibility CSR of Companies in India

The Companies Act, 2013 lays down the provisions requiring corporate to mandatorily spend a prescribed percentage of their profits on certain specified areas of social upliftment in discharge of their social responsibilities. Broadly, Corporate Social Responsibility implies a concept, whereby companies decide to contribute to a better society and a clearer environment – A concept, whereby the companies integrate social and other useful concerns in their business operations for the betterment of its stakeholders and society in general.

Financial Management