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BW Businessworld

What A Leap!

The Reserve Bank of India, it seems, will do the opposite of what the US Fed is doing. For instance, when the US Fed turns dovish, the RBI raises rates

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While almost 50 per cent of India continues to be underserved by banking or the wider financial system, what’s heartening is the rapid strides made on financial inclusion. Mint Road’s figures show the number of banking outlets in villages rose almost eightfold to 5,86,303 at end-March 2016 from 67,694 at end-March 2010 after business correspondents (BC) were permitted. During this period the number of urban locations covered through BCs surged by 2,000 per cent to 1,02,552. So did the Basic Savings Bank Deposit Accounts — six times to 469 million from 73 million; the single biggest addition was under the Jan Dhan Yojana — 220 million accounts (up to June 2106) with Rs 38,000 crore in them. We seem well on the way to achieve the vision for financial inclusion stated in the report of the Committee on Medium Term Path to Financial Inclusion that by 2021 over 90 per cent of the hitherto underserved sections would become active stakeholders in economic progress.
— Raghu Mohan

Of Doves, Hawks And Sleeping Owls
The Reserve Bank of India, it seems, will do the opposite of what the US Fed is doing. For instance, when the US Fed turns dovish, the RBI raises rates. And when the US Fed turns hawkish, the RBI goes the way of the dove. After the Lehman crisis in 2008, to stimulate the economy the US Fed kept lowering rates consistently, from 5.25 per cent to 0.25 per cent; the RBI held to higher rates of over 7 per cent. When the US Fed kept rates low after 2010, the RBI hiked rates from 2010-12 to keep inflation from spiralling higher. Now, while the US Fed has been turning hawk, the talks in this part of the world are rates could head even lower. Raghuram Rajan famously said that central bankers are more like owls, who watch the economy. For now, though, the owls are not to be seen.
— Clifford Alvares

In Give-and-take Mode?
After months of weighing the pros and cons, the Indian government recently announced that it had decided to ratify the Paris Accord on climate control. Till recently, there was a strong body of opinion that the Paris Accord gave undue advantage to the most polluting nations like the US and China while “victimising” emerging countries like India. The Narendra Modi regime has since long publicly committed itself to investing heavily in green energy. It is estimated that about 40 per cent of energy output in India will come from clean and renewable sources like solar and wind energy by 2022 if the plans being implemented by the government fructify. Some analysts also reckon that the decision to ratify the Paris Accord is another message to global powers to reconsider India’s stalled entry into the elite Nuclear Suppliers Group.
— Sutanu Guru

Edutech To The Fore
Mobile payments and e-commerce platform Paytm ‘acqui-hiring’ edutech startup EduKart is a testimony that the edutech space is finally in the limelight. Delhi-based online education platform EduKart helps in securing enrolment to online and distance degree, diploma, and certificate courses. Besides, edutech startups have been able to attract significant investments of late. In May, Blume Ventures invested an undisclosed amount in a Pre-Series A round of Prepathon, a learning app for competitive exams owned by PaGaLGuY. In August, Bengaluru-based online learning platform Unacademy raised $1 million of funding and in September, Bengaluru-based BYJU’s raised $50 million in funding led by the Chan Zuckerberg Initiative (CZI) along with Sequoia Capital. Online study platform Zeroinfy also raised an undisclosed amount in seed funding from Calcutta Angels Network (CAN). Clearly, the edutech space is coming of age.
— Ayushman Baruah

Real Reforms!
At least half a dozen railway ministers before Suresh Prabhu talked about reforming the railways and harnessing its vast potential. Sadly, most treated it as nothing more than a populist platform for reaping electoral benefits. The merger of railway budget with the general budget has been hailed as the “biggest reform in railways” by Prabhu. There won’t be a railway budget day anymore. But more importantly, railways now won’t have to pay Rs 9,700 crore to the government as dividend on the capital at charge, financial decision making will be quicker, and the various types of concessions in railway fare that amounted to Rs 34,000 crore last year will now come under the scrutiny of the finance ministry. An independent railway regulator may soon recommend revision of passenger and freight fares. Moreover, redevelopment of 400 stations will mean bigger opportunity for brands and shoppers translating into higher non-passenger revenue. Big moves indeed!
— Ashish Sinha