India’s richest tycoon Mukesh Ambani on Thursday threw his weight behind Prime Minister Narendra Modi’s demonetisation move, saying in a single stroke all unproductive money has been brought into productive use.
Announcing extension of free domestic voice calling and data on his Reliance Jio network till March 31, Ambani said he wants to “congratulate and applaud” Modi for his “bold and historic decision” to junk old 500 and 1000 rupee notes. “By doing this, our Prime Minister has given the strongest possible push to the growth of a digitally-enabled, optimal-cash economy in India,” he said.
Stating that the move will help change the mindset of the people of India, he said, digitally-enabling transactions will help “create a fair, just, transparent and strong India and Indian economy.”
“It will bring unprecedented accountability at every level,” he said. “I believe that the common people will be the biggest beneficiaries of this change.”
Stating that the biggest beneficiary of the move will be the ordinary Indian, he said moving to cashless economy and digital mode of payments will end queues not just for utility bill payments but also for depositing or withdrawing money at banks.
“With one single step, he has brought all the unproductive money into productive use. This will enhance credit flow in the economy and legitimate credit is the fuel that powers the engine of economic growth,” he said.
Ambani, who heads India’s biggest private sector firm Reliance Industries Ltd, said till now credit in India had mostly been high value and low volume.
“Digital enablement has laid the groundwork for broad availability of low value, high volume credit. This will provide credit to our farmers, small shopkeepers, traders and daily wage earners,” he said.
Moving to cashless economy and digital mode of payments will lead to people not having to stand in queue for train tickets, paying utility bills or depositing/withdrawing money from banks. Time saved is money earned, he said.A digitally-enabled economy will help India become stronger and every Indian becomes even stronger, he said.
“Once again, I would like to join my fellow Indians in congratulating our Honourable Prime Minister for this historic decision that implements his vision of Digital India and lays a strong foundation for the Indian economy,” Ambani added.
PAC to call Urjit in January to review economic costs
Public Accounts Committee (PAC) on Thursday decided to call RBI Governor and top Finance Ministry officials next month to review the economic situation following the demonetisation of high value notes.
The Public Accounts Committee (PAC) is a committee of selected members of Parliament, constituted by the Parliament of India, for the auditing of the revenue and the expenditure of the Government of India.
The decision to call RBI Governor Urjit Patel, Finance Secretary Ashok Lavasa and Economic Affairs Secretary Shaktikanta Das was taken unanimously by all the members of the Committee, headed by senior Congress leader K V Thomas.
“In the PAC meeting today, we took an unanimous decision that in first or second week of January, we will call the RBI Governor, Economic Affairs Secretary and Finance Secretary to review the economic situation after demonetisation,” Thomas said after the meeting.
The exact date will be decided depending on the availability of the RBI Governor, he added.
On November 8, Prime Minister Narendra Modi had announced the demonetisation of old Rs 500 and Rs 1,000 notes.
According to various estimates, the GDP growth this fiscal is expected to witness a decline due to demonetisation, but the range varies from 0.5-2 per cent.
After releasing GDP numbers for July-September, Chief Economic Adviser Arvind Subramanian had yesterday said: “What we have for the first half are actual numbers. It shows good consistent performance. For the second half, we will have to see, there is a lot of uncertainty. We have to analyse it before we say something.”
The Indian economy grew 7.3 per cent in the second quarter of 2016-17, up from 7.1 per cent in the previous three-month period, as per the government data.
Last week in the Rajya Sabha, former Prime Minister Manmohan Singh had said the demonetisation step was a “monumental management failure” which would lead to 2 per cent drop in GDP.
Currency ban will sharply shift retail commerce to mobile phones: India Inc
The Centre’s move of demonetisation will augur well for the m-commerce industry in the country and most of the retail commerce will shift to mobile in the near future, says a report.
“It has been more than two weeks since the move to ban the Rs 500 and Rs 1,000 notes was announced. The demonetisation move was exactly the fillip the fledgling m-commerce ecosystem in India was looking for,” according to a CII Grant Thornton report on m-commerce.
M-commerce is the buying and selling of goods and services through mobile phones.
“Smartphone usage has grown at an explosive pace in recent past. We expect it to grow even faster with demonetisation and entry of new service providers such as Reliance Jio. This in turn will fuel the growth of m-commerce and we envisage that most of the retail commerce will shift to m-commerce in the foreseeable future,” the report said.
M-commerce accounts for nearly 60 per cent of online sales in the country, on the back of 30 to 50 per cent growth in online transactions in the tier II and III cities.
The growth in m-commerce has been fuelled by the availability of affordable smartphones and mobile data plans.
India currently has 292 million smartphone users, and more than 45 per cent of all mobile phones shipped in Indian market were smartphones in the first quarter of 2016.
Mobile Internet user base in India has increased to 371 million in 2016 and the user base is expected to annually grow by 50 million till 2019.
Online shoppers in India are likely to more than double by 2020, it noted.
“The current online shoppers are in the range of 80-100 million and expected to increase to 175-220 million by 2020,” it said.
It also observed that 60 per cent of online shoppers prefer mobile devices.
It noted that mobile wallets have become a key enabler for m-commerce as most people are hesitant to share their bank account details or credit/debit card details due to the fear of sensitive information getting compromised.
“While online banking and even mobile banking has been around for a long time, mobile wallets have made it easier to shop. From grocery to cab rides to movie tickets to food deliveries to utility bills, almost anything can be bought and paid via simple mobile apps,” it pointed out.
Over the past four years, mobile wallet transactions have jumped from Rs 10 billion (60 mn transactions) in 2012-13 to over Rs 490 billion (600 mn transactions) in the year 2015-16.
“With ever-increasing Internet and mobile penetration and the recent demonetisation event, India is all set to witness a massive surge in the adoption of digital payments in the recent future,” it said.