Tarun takes a stock of the business and economy, in the past year, in his write-up, as part of the Special Feature, exclusively for Different Truths.
Writing a year-end column is something new for me. There is an additional burden of matching wits with many renowned professional writers, who would all be writing similar things. But the big challenge also gives a big emotional high. And the pressure can be alleviated by simply doing your own job. So here is the recap of the eventful year 2017.
The year started while still being in the throes of demonetisation. There was a lot of excitement about the new step, as well as a lot of uncertainty building up in the minds of the people about future of the
economy.
In the first week of May, this year, the president of India signed an ordinance, amending the Banking 
Regulation Act. This allows the RBI to push banks to deal hard with bad assets. From 2001 on, several
attempts by the names of corporate debt restructuring (CDR), Strategic debt restructuring (SDR), and sustainable structuring of stressed assets (S4A) have been introduced to deal with bad debts and stressed
assets of banks, and the latest ordinance was another attempt for the same. The Insolvency and Bankruptcy law will provide a speedier exit to the stressed assets.
On July 1, the much awaited and much welcomed GST became functional. Despite initial teething troubles, it has become a solid reality now. But the tax that was promoted as “one nation one tax”, has seven different slabs in all, three kinds of GST, a separate registration in each state, with an E-way bill for interstate, and even intrastate sales. India is on the expressway for organised and digital business
practices.
Aadhar, that was mooted as an alternative to ration card for subsidy transfer to lower strata of the society, has become the ubiquitous requirement for everything, from the mobile phone to bank account, to
property registry, and so many other things. Thus, it is almost mandatory to have an Aadhar card from this year on. As the nation was grappling with GST, came the World Bank report, which gave a big boost to India’s ranking on the ease of doing the business index. India jumped 30 places on this index, from 130 to 100.
Another great bit of good news that came was from the rating agency Moody’s. After 14 years, India’s sovereign rating was moved up from Baa3 to Baa2 and changed the outlook from stable to positive.
The government broke the policy paralysis about capitalisation of banks, by taking a decision to inject liquidity to the tune of 2 lakh crore rupees in the public sector banks. This is expected to give new
momentum to lending, as well as the strength of their balance sheets.
As the year is drawing to a close, there is a new bill under consideration of the Parliament, the Financial Resolution and Deposit Insurance bill, or FRDI for short. This bill proposes a new framework for financial regulation of banks, NBFCs, companies, insurance companies, and stock exchanges. The term “bail-in” has turned controversial, as there are fears regarding the safety of deposits in the banks in the absence of government support or bailout, in future.
The GDP growth this year saw a see-saw ride. The first quarter of the calendar year, until March saw a decent 7% growth even after demonetisation. Then the GDP dipped to 5.7%, then again went up to
6.3%, and the new figure is slated to be released in January but is expected to be on lines of previous quarters, and not on the higher side.
Inflation has many shades to it. While the food inflation continued to hover over 6%, the general price index remained around 3-4%. Interestingly, the consumer price index moved about 0.5% higher than
wholesale price index, indicating that GST did prove to be slightly inflationary. As we ring down the year, comes the news that December inflation came in at 4.88%.
India grew to be a nation of 134 crore plus people, in 2017. The Human Development Index went down from 130 to 131, as shown by the report of UNO.
The year 2017 was a tad poorer than 2016 in terms of creation of employment. According to International Labour Organisation, India had 17.7 million unemployed in 2017, and that same is projected to increase to 17.8 million in 2018.
The stock markets continued to give fantastic returns. Nifty scaled a new high of 10500 level. However, 
Indian sovereign bond market sold off this year, as compared to 2016, due to a combination of high oil
prices, an expectation of high fiscal deficit this year, and rising inflation towards the end of the year.
As the year is drawing to a close, the business community is very apprehensive about the introduction of E-way bill for interstate and intrastate transport of goods.
As 2017 turned out to be a momentous year in terms of economic happenings, 2018 promises to be equally so. Since 2017 was a year with lots of events, their effects might kick-in in 2018. Furthermore, 2017 was a year of achieving several milestones, and missing certain targets. Let’s welcome the New Year 2018 with hope and optimism, but with lots of caution as well.
©Tarun Gupta
Photos from the Internet
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