Demonetization, GST, India’s 2nd Quarter’s GDP at 5.7%.

All Economists are stating that the Indian economy is at all-time low. While I respect all these economists, but as a common citizen of this country, this is my take on the economy of India.


As of Aug 2014, 4%(25k) the 6 lakh villages did not have access to electricity even after 67 years of independence and we were calling INDIA a developing nation. Other developments should happen in parallel but 45 million people in darkness do not support the notion of a developing nation.

Hindustan Times on 26th May 2017 read:

In 2 years, BJP government electrified 13,523 villages; only 8% were completely electrified”.

They say English is a bitch and yes it is, when reading this above statement the good work done by government is veiled.

For 67 years, no one cared a pie and in 2014 a vision emerged – “everybody should have access to electricity as it is their right”. How can we expect such a fast change in the system when the governance was being murdered every single day since the last 67 years? Instead of being supportive to the pioneering government in taking that extra step, our focus is being diverted to economy, GDP, fiscal policies etc by the media. However, only a fraction of commoners can comprehend the same.


Inflation in my country is at 3.78% in 2017 whilst 9.6% in 2011. In simple terms, if 10 chocolates can be bought today at Rs. 100, next year after accounting for a 3.78% inflation rate the same chocolates would cost Rs 103.78. So, lower the inflation rate the better it is for the common people.

Imagine a company pays 10% increment to its employees every year and inflation rate is at 10%. This means increase in pay is not sufficient to enhance their standard of living. 

Does the government has any part in controlling inflation? The answer is Yes, through RBI’s Monetary Policies and Contraction Policies. These measures taken by government are not given prominence in the newspapers.

Oil Prices:

International oil prices per barrel are at lowest since 2011 and we still note that the petrol/diesel has not reduced relatively.

Let us contemplate from environment’s view – Petrol is sold at Rs c.70 per litre, assume government passes the benefits of international trade price to citizens and brings the price to Rs. c.35 per litre.

Many may stop using public transport and start using own transport as it is affordable, cheap and comfortable.

  1. Think about all those additional cars plying on road every single day.
  2. Think about the environment pollution caused by them.
  3. Think about the traffic congestion.

Now, from an economic standpoint, let us see why the petrol prices are not being reduced despite the lower crude oil rates.

We all know India was rich in gems and jewels during Krishnadevaraya times but the harsh reality is that 21st century India is rich by levying taxes. An average of 60% tax including Direct & Indirect is being levied.

Break down of Tax on Petrol (Delhi): 

When excise duty by Central Government is reduced, VAT is increased in states and hence the benefit to common people is deprived.

Yes, the Excise Duty on fuel has increased from Rs 11 in 2014 to Rs 21 in 2017. According to the government, India has to take advantage of the falling prices and this has to be equally spread across all sectors of growth by also reducing the burden on common people.

a) Fiscal Deficit

In order to meet fiscal deficit targets, the government needs to generate revenue by taking advantage of levying higher taxes. Contrary to UPA government’s decision to not spend c.Rs 1,20,000 crores ( US$18 billion ) that were sanctioned for development to meet the Fiscal Deficit Target.

b) Excise Duty

Out of excise duty collected; 42% of excise duty is passed on to the states. Benefit is spread across center and state.

c) Development Programs

Major chunk of revenue generated from Petrol’s excise duty is being spent on improving National Highways & developing Rural Road links.

d) Oil companies exercise future purchases in international trading and due to this Oil companies had incurred a loss of Rs c.40,000 crores. A part of the benefit is also being passed on to Oil companies to compensate the loss.

e) Common People

A marginal benefit is also passed on to us. by reduction of fuel prices.

Let us also realize the fact that India’s external debt is US$ 471 billion. This also has to be repaid. So the tax revenue generated due to falling crude oil prices in international market is being used for development.


When asked in a press conference about GST & Demonetization, Christine Lagarde, IMF chief said “Roof has to be changed when the sun is shining brighter“.

India is the fastest growing economy in past few years and this change in economic policies was required in order to elevate the growth to the next level. In order to move from a ‘Developing Nation’ to a ‘Developed Nation’, few tough decisions have to be made which may not be embraced by everybody because of the pseudo media.

Indians are very impatient, we want change to happen rapidly, but let us understand India is much larger and more dynamic compared to Hong Kong, Singapore or Malaysia. India’s presence in the world is equivalent to a continent with a population of 1.3 billion, spread across 3.2 million km square, producing 2.4 trillion USD worth of goods, comprising of 29 states and 7 union territories.

My view on Economy of India is “IT’S HEADING IN THE RIGHT DIRECTION” because the person who is leading us is first A Patriotic and then A Politician.