Subhash Chandra Garg- Economy, Finance and Fiscal Policy Strategist

  Future of Banks- Fintechalise or Perish   Subhash Chandra Garg Economy, Finance and Fiscal Policy Strategist; Former Finance and Economic Affairs Secretary, Government of India     Banks are industrial era match-makers between savers and borrowers Industrialisation expanded the basket of goods and services produced and consumed. Industrial era also did away with the constraints of localised production and consumption by developing means of transportation and communication. Production and consumption of goods and services became truly global. This expansion of the goods and services to be produced and distributed and the scale at which it could be done necessitated financing. Expanding riches generated lot of savings. The banks emerged as the intermediators between savers and borrowers at local, national and global scale. The banks provided opportunity to earn an interest on the savings handed over to them and earned income by lending those savings t...

  Impact of Covid Second Wave on Economic Growth   Subhash Chandra Garg Economy, Finance and Fiscal Policy Strategist; Former Finance Secretary, Government of India     Second wave has caught us unprepared Fast spreading reported daily covid-positive cases, in excess of 3 lakhs a day, made India clock one million cases in last three days only. Health infrastructure has been stretched to its limits. Oxygen, beds, drugs, vaccines, faith and confidence all seemed to have broken down in many parts of the country. India is in a very disturbed state. Not so long back in January-February, situation was looking quite comfortable. For a day, Delhi had recorded only one death with national death count falling to less than 100. While Covid was still raging in the US and UK, India seemed to have got over the Covid with much less damage. The self-inflicted damage to economic growth in QI of 2020-21 had also been put behind by rationale approach adopted in Q3 and Q...

  Fintechs Will Take Over Financial Products Distribution Subhash Chandra Garg   There are three main segments of financial businesses- payments, investments and credit. Fintech firms are surging in all the three segments. Payments Payments are made using either currency or deposits/money in bank accounts/ digital wallets. Non-cash or fintech payments, essentially amount to transfer of deposit from one account to another. UPI platform created by NPCI revolutionised fintech payments by linking all the 40 crore odd bank accounts into one single database, literally transforming all banks in one single digital bank for payments. Most non-cash payments are now made using fintech platforms like UPI, Bill-pays, IIMPS, NEFT, RTGS   etc. These solutions have pushed out bank drafts, cheques   and other physical payments. Payment-tech is the most advanced in the financial services business. Small payments are, however, still majorly (more than 80%) cash-based. ...

  BUDGET 2021-22 PRIVATISATION PUSH AND SETTING UP A DFI- A DECISIVE TURN FOR ECONOMIC POLICY REFORMS 3.0?   SUBHASH CHANDRA GARG Economy, Finance and Fiscal Policy Strategist and Former Finance Secretary, Government of India   Bold Privatisation Push Government had announced its intention on 18 th May 2020 to formulate a new coherent Public Sector Enterprises Policy to push reforms in central public sector undertakings (CPSEs). Principal pivot of the policy was to retain a maximum of four public sector companies in ‘strategic sectors’ and privatise every other CPSE. While it took some time for the Government to formulate this policy, the Budget Speech 2020-21 outlined the policy. The policy covers existing CPSEs, Public Sector Banks and Public Sector Insurance Companies . Principal elements of the Policy are: a.     Strategic sectors defined to include- i. Atomic energy, Space and Defence, ii.   Transport and Telecommunications, iii...

  BUDGET 2021-22   CLAWING BACK FINANCE COMMISSION DEVOLUTION FOR FUNDING AGRICULTURE INFRASTRUCTURE   Subhash Chandra Garg Economy, Finance and Fiscal Policy Strategist; Former Finance Secretary, Government of India     Finance Commission Recommends Continuation of Share of States in Central Taxes at 41%   The15 th Finance Commission recommended “retaining the vertical share of 41 per cent of the divisible pool of taxes for the States during the award part of this Commission”. This meant continuation of the share of States in the central taxes as recommended by the 14 th Finance Commission. The 15 th Finance Commission reduced the share of States from 42% to 41% to adjust for the share of J&K, which had become two union territories.   The “divisible pool” is the critical part of the recommendation. The Article 270 of the Constitution, after the 80 th Constitutional Amendment defines the divisible pool. Article 270 pre...