economics Archives - Page 9 of 24

Personal Reasons

On October 26, 2018, Viral Acharya, a deputy governor of the Reserve Bank of India, gave a public lecture in Mumbai on the independence of regulators. “Governments that do not respect central bank independence will sooner or later incur the wrath of financial markets,” he said. Reports of tension between the bank and the government followed.

On December 10, 2018, the governor, Urjit Patel, resigned. His statement gave one reason: “On account of personal reasons, I have decided to step down from my current position effective immediately.”

In-Principle Approval

On August 19, 2015, the Reserve Bank of India gave “in-principle” approval to eleven applicants for payments bank licenses, among them the Department of Posts, Reliance Industries and Vodafone m-pesa. The approval was valid for 18 months.

In that time the applicants had to meet the bank’s conditions. Only then would the bank “consider granting to them a licence.” The release added: “Until a regular licence is issued, the applicants cannot undertake any banking business.”

The Jobs Report

In December 2018 the National Statistical Commission approved a report on employment from the Periodic Labour Force Survey. The government did not release it. On January 28, 2019, two members of the commission resigned, its acting chair P.C. Mohanan and J.V. Meenakshi.

The government said that the two members had never expressed reservations.

Ten People

On November 8, 2016, at 8:15 p.m., Prime Minister Narendra Modi announced on television that 500 and 1,000 rupee notes would no longer be legal tender. According to Business Standard, “only 10 people in the system were aware of the plan in its entirety.”

The board of the Reserve Bank of India met at 5:30 that afternoon. The cabinet was informed that evening, and ministers were told to keep their mobile phones outside the room. “When I went to the cabinet meeting, I had no idea such a big move would be announced,” said the minister Piyush Goyal.

The Board Met at 5:30

At 8 p.m. on November 8, 2016, Prime Minister Narendra Modi announced that 500 and 1,000 rupee notes would no longer be legal tender. The central board of the Reserve Bank of India had met that day at 5:30 p.m.

Its minutes, reported in March 2019, record an observation on figures the government had given: “The growth rate of the economy mentioned is real rate, while the growth in currency in circulation is nominal.”

Hawala

Hawala is an old system of moving money between places, often across borders. A broker takes cash in one city, and a partner broker pays it out in another. No money travels between them at the time. They settle their accounts later, between themselves.

The system “operates on a system of trust, reputation, and personal connections,” as a legal analysis puts it. In India, hawala transfers contravene the Foreign Exchange Management Act of 1999.

The Introducer

Indian banks used to ask anyone opening an account for an introduction from an existing customer of the bank. Someone the bank already knew had to vouch for the newcomer.

In December 2012 the Reserve Bank of India told banks to stop insisting on it. The requirement, it said, was not mandatory under any of its rules.

Back to 1961

In January 2012 the Supreme Court ruled that Vodafone did not owe Indian tax on its purchase of a foreign company that held Indian assets. Months later, the Finance Act of 2012 changed the income tax law back to 1961, so that such deals were taxable after all.

In August 2021 a new law withdrew that retrospective effect. Companies had to drop their cases to receive refunds, without interest.

Twice the Cost of School

In 2024 the investment firm Jefferies estimated the Indian wedding market at about 130 billion dollars a year. The average wedding cost about 12 lakh rupees, roughly five times India’s GDP per person.

According to the report, that is nearly twice what Indian families spend on 18 years of a child’s education.

The First Vote

The GST Council brings the central government and the states together to set India’s goods and services tax. The rules allow decisions by weighted vote. Until December 2019, every decision had been unanimous.

That month it voted for the first time, on the tax rate for lotteries. Twenty-one states voted for and seven against.