Daily Financial News Analysis – 1st Feb’20 – Free PDF Download

Economic Survey

• Economic Survey, authored by chief economic adviser is now out.
• Suggestions: government cut subsidies, boost spending and reform land and labour laws to help the economy rebound to 6-6.5% growth in the next fiscal year.
• The government must use its strong mandate to deliver expeditiously on reforms which will enable the economy to strongly rebound in 2020-21.
• Reforms in land and labour markets may further reduce business costs.
• As the proportion of small and marginal holdings is significantly large, land reform measures like freeing up land markets can help farmers in improving their income.
• International Monetary Fund projected India’s growth to accelerate to 5.8% in 2020-21.
• Estimated 4.8% in 2019-20: stress in the non-bank financial sector and weak rural income growth
• Economic Survey: its own projection is fraught with downside risks such as………
• Continued global trade tensions
• Worsening US-Iran geopolitical situation
• Increase in short-term interest rates in advanced economies
• Slow progress in implementation of the insolvency and bankruptcy code
• Stagnation in gross domestic savings rate
• Upside risks: such as bottoming out of global trade, a turnaround in housing, favourable global sentiment toward India, and better implementation of the goods and services tax, are expected to boost economic growth.
• D.K. Srivastava, chief policy adviser at EY India consultancy, said the survey’s projected FY21 growth of 6-6.5% may prove to be optimistic unless backed by a strong fiscal stimulus in the budget and the meeting of investment targets specified in the National Infrastructure Pipeline, both by the central and state governments.
• The survey said the economy is set to revive in the second half of 2019-20 mainly on account of 10 positive factors.

1. Picking up of nifty (national stock exchange’s nifty index) for the first time this year
2. An upbeat secondary market
3. Higher foreign direct investment inflows
4. Build-up of demand pressure
5. Positive outlook for rural consumption
6. Rebound of industrial activity
7. Steady improvement in manufacturing
8. Growth in merchandize exports
9. Higher build-up of foreign exchange reserves
10. Positive growth rate of GST revenue collection

• It proposed a new programme, “Assemble in India“, to be integrated with “Make In India” and focusing on labour-intensive exports that could potentially create 40 million well-paid jobs by 2025 and 80 million by 2030.
• President Ram Nath Kovind, in his address to the joint sitting of Parliament at the beginning of the budget session, emphasized the need to buy local products, indicating the government increasingly wants to promote Swadeshi.
• The survey said government intervention hurts more that it helps in the efficient functioning of markets.

Land

• India’s first ground survey was carried out in 1800.
• It was a Herculean task, and took nearly 50 years.
• Great Trigonometrical Survey

• Reliable, and robust land records form the bedrock of good governance.
• In India, every individual owns or aspires to own at least one immovable property, be it farm land, homestead, or a flat in a multi-storied building.
• Land is an asset without which human life cannot exist.
• Land is also an inelastic asset—it cannot be added to or destroyed.
• It is possible to reclaim land through filling up of water bodies, and to make areas uninhabitable through excessive exploitation.
• Management of land is the government’s sovereign duty.
• Every citizen desires hassle-free access and control over their land.
• Maintenance of land records is a state subject, land title records, transfers, and public records being managed by the Land Revenue Department.
• Ironically, the department has the dubious distinction of being most prone to corruption.
• Under the overall guidance of the Department of Land Records, every State/UT has been updating its records.
• Land documents maintained by the village officer or patwari, under the supervision of the taluk tahsildar, carry a database of every land holding.
• Any change in ownership through sale, inheritance, or gifting is recorded.
• This change needs to be reflected in the basic records, both textual and spatial, through a procedure called mutation.
• The revenue department in each state is required to ensure every land holding gets reflected as a digitalised set of coordinates, which, when joined, forms the parcel boundary.
• Through the process of ground-truthing or field verification, a reasonable sample of land holding boundaries including public assets, viz, rivers, hills, roads, etc are verified.
• Much like laying out the pieces of a jigsaw puzzle, the final map of a locality, a ward and a village is thereupon generated.
• The process, though in progress in every state/ UT for over a decade and a half, is nowhere near completion.
• Being a state activity, the methodology adopted by each state varies and progress in some states is quite indifferent.
• In fact, it is doubtful whether the methodology adopted in some places would actually give the desired result.
• No doubt the government of India has been monitoring progress, and also providing limited funds for the work.
• But, the process is tedious, long-drawn and demands total commitment, which may not always be present among public servants.
• There is a flip side too: in states where the work has been out-sourced, the reliability and quality of the data may turn out to be inaccurate.
• As mentioned above, a complete solution would emerge only when the three concerned departments, viz registration, revenue and survey function on the basis of a common database, and any change in title or tenure is in real time.
• But, given the propensity in human nature to misuse authority, there are cases where the process of digitization of land records has ended up generating lakhs of complaints.
• For instance, a simple shift in the location of a corner point of one property and change in coordinates by a degree would impact the location and, possibly, extent, of every other holding down-stream.
• Time is then spent in redressing the resultant grievances, distracting attention from the basic digitalisation work.
• This is the position in many districts in Kerala.
• Such dishonesty also leads to inflating the number of civil litigations and unnecessary harassment to the land-holders.
• Government of India has expressed its intention to move the country’s records from presumptive to conclusive titling.
• But, conclusive titling is based on the presumption that the land records are totally accurate.
• Until the records are fully digitalised the records will remain prone to errors and tampering.
• Conclusive titling implies closure of all past land-related disputes and indemnification of any owner adversely affected.
• With the present state of the records, government would go bankrupt trying to indemnify those affected.
• Even the basic cadastral map of the famed Dal Lake was found to be destroyed in a fire years ago with concerned officers unaware of it.
• Moreover, there is a need to ensure compatibility between the digitalised map finally produced by each state/ UT so that with the assistance of the Survey of India, the composite cadastral or land records map of the entire country can be generated.
• In conclusion, to enable the country to move ahead, to encourage mushrooming of start-ups, to prevent build- up of NPAs in banks and for FDI to come in with ease, the states and Centre need to take up land record modernisation with due diligence and alacrity.
• Without it the country’s economy cannot grow at a speed that would take us to the $5 trillion level.

We and our mobile phones

• Is this relationship with the mobile handset a distraction that we should wean ourselves off, or is it an opportunity to be taken advantage of?
• People generally spend an average of three hours and 15 minutes on their phones every day.
• Top 20% of smartphone users spending upwards of four-and-a-half hours.
• We tap, type and swipe our smartphones more than 2,600 times a day, on average.
• Extreme smartphone users touch their phones more than 5,400 times a day.
• For many, nothing else would have consumed as much of their time as their mobile phone does.
• Neuroscience offers a clue to this intimate relationship with our handsets.
• Dopamine is a hormone that literally makes us happy, and is implicated in reward-motivated behaviours.
• Dopamine is released each time we receive something on our phones, in anticipation of something interesting—a text from a loved one, a “like” on Facebook, or an item of news that’s breaking.
• The always-present, always-on attribute of smartphones could present myriad opportunities.
• Smartphone apps also have unprecedented access to our lives.
• Recent research has shown that a person’s online behaviour can provide clues about his mood.
• The smartphone taps into this moment-to-moment information on the user’s behaviour, and the associated context—what is now being called the “data exhaust“—could be used to paint an increasingly accurate picture of the person.
• Rather than just using this to aim ads at us, can smartphones be used as an instrument of managing one’s own life—nudging us towards our own stated goals?
• Can the mobile phone be used to motivate me to exercise more often?
• Can it be used to make me take my medication on time?
• Can it be used to make me slow down if I am driving too fast?
• Can the mobile phone be used to motivate a driver to stop at a roadside cafe for a cup of tea?
• When television emerged a few decades ago, early television ads were very verbose in nature.
• It took some time for people to understand the real power of this new medium and make the communication more evocative, emotional, visual-oriented.
• Although the number of times an average user interacts with a smartphone is very large, the interactions are very short, just a few seconds.
• Most smartphone usage is not planned either.
• Therefore, the amount of information one can absorb at a particular time is very limited.
• One needs to develop appropriate stimuli for smartphones.
• Self-talk is one of the most under-utilized resources to master our minds and improve our lives.
• Our smartphones have the potential to be our guardian angels.
• But the biggest challenge to achieving the full potential of this device will depend on whether we are able to harness its powers for good purposes and develop appropriate stimuli to influence our behaviour.

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