Through the Looking Glass

The Financial Express From purely a financial perspective of current account deficit, the distinction between goods and services does not matter The exports performance of Vietnam continues to be contrasted with that of India: the most recent example being the editorial in this newspaper, “Can India learn from Vietnam to manage export-led growth?”. The article, similar to other analyses on this topic, focusses on the significant ramp-up in the exports of Vietnam, especially over the last decade or so. With Indian merchandise exports remaining range-bound over the last few years in the $300-330 billion annual range and Vietnamese exports having risen from $150 billion in FY14 to $244 billion in FY18, there is hand-wringing for India having missed a trick. It is important to acknowledge the growth of exports in Vietnam but before we jump to conclusions and recommendations for India, we need to explore this growth more deeply so that we can draw the right lessons. Exports is one p...

The Financial Express The announcement of this policy statement in the Budget follows the release of the ‘Rupee Raftaar’ report at the Global Aviation Summit in Mumbai in January earlier this year. The Finance Minister, in her maiden budget, laid the foundation of building an important component of the aviation sector: “As the world’s third largest domestic aviation market, the time is ripe for India to enter into aircraft financing and leasing activities from Indian shores. This is critical to the development of a self-reliant aviation industry, creating aspirational jobs in aviation finance, besides leveraging the business opportunities available in India’s financial Special Economic Zones (SEZs), namely, International Financial Services Centre (IFSC). Government will implement the essential elements of the regulatory roadmap for making India a hub for such activities.” The announcement of this policy statement in the Budget follows the release of the ‘Rupee Raftaar’ report at...

The knife-edge balanced nature of Government finances means that there is little leeway available for the Central and State Governments whenever there is a shortfall in receipts or an increase in expenditure. In both cases, they automatically reflect in a substantial change in the fiscal deficit. As India moves towards a US$5 trillion GDP economy, the current slowdown and the longer-term runway offers two ways to recast the current fiscal architecture. For the time being, we can park the debate on whether it makes more sense for the governments to run a counter-cyclical fiscal policy (i.e. pump in more money in the economy in times of slowdown even if it busts the fiscal deficit commitments) or keep true to its commitment on fiscal deficit numbers (irrespective of any slowdown in collections or in the economy). We take it is as a given that commitment to the fiscal deficit number matters more, especially since this is a number tracked closely by investors, credit rating agencies and...

Since the implementation of Goods and Services Tax (GST) in India, the Central Government is now a primary decision-maker on almost all the taxes in the country. With an effective veto power in the GST Council and its ability to set the income and corporate taxes and various custom duties, the Central Government now has a say on the rates at which taxes are levied across almost all commodities. Of the total revenues collected by the States and the Centre, around four-fifths of it is decided for by the Central Government. The taxes collected by the Central Government are then shared with the States in the ratios laid down by the Finance Commission (FC). What this the practical application of the above mean? In FY2020, the total receipts collected by the Central Government is budgeted to be Rs 26 lakh crore (or Rs 26 trillion). If the budgeted number holds, Rs 8 trillion will be shared with them as part of the FC formula. This leaves the central government with receipts of Rs 18 trill...

Talk on Location-Casting: Taking You Near Your Customers More details here . Unfortunately, no video. 

Facebook Live of MasterClass speaker session by Mr. Akhilesh Tilotia, Officer on Special Duty to Minister for Civil Aviation. In this video, I discuss the idea of Choices - how I have chosen in life and what considerations you might want to keep in mind as you choose between the various choices life throws at you. You can watch the video here: Facebook The students did a fantastic job of summarizing the speech here: Link

Business Standard The economic multiplier effect of airport construction is estimated to be around six times the capital invested in an airport Jayant Sinha & Akhilesh Tilotia In the previous century, Jawaharlal Nehru proclaimed dams and factories as the ‘temples of modern India’. As the Indian economy becomes more service intensive and rapidly globalises to become a major player in goods and services, trade and foreign investments, connectivity is of paramount importance. In this century airports can be said to be the ‘temples of New India’ welcoming trade, ideas and investments. India is expanding the reach of its Ude Desh Ka Aam Naagrik (UDAN) scheme which brings airline services closer to many cities. Air travel is becoming cheaper as fuel prices remain low and operating costs are brought down through industry-friendly policies, airlines are significantly expanding capacity bringing many new passengers to the aviation network. A sophisticated analysis done by Google (u...