Recently the government released a datasheet which stated that the Gross Domestic Product (GDP) growth of the second quarter of the year 2019-20 as 4.5%, which is at a six-year low mark. The growth in the second quarter during the last year stood at 7.1 per cent, and its downward spiral continued for the seventh consecutive quarter.
All about Gross Domestic Product
Following are the primary indicators of a slowdown in Indian Economy:
- A significant sign is of low GDP rate, which is the lowest rate since 2013.
- Remarking crisis in the automobile sector. Around 30% drop in production by the top five firms in India have been seen.
- Goods and Service Tax (GST) collection has also dropped by 6,227 crores and a steep decline in saving and investment rate has also been noticed.
- Rupee costs are depreciated to cross ₹72 marks, the worst monthly loss in the last six years.
- Gross Fixed Capital Formation (GFCF) (as a percentage of GDP) has declined from 56% in FY15 to 36% in FY19
Reasons for slow growth or economic slowdown:
- The foremost reason is the Automobile sector crisis, as the demand for passenger vehicles dropped down, it results in higher fuel prices, higher interest rate and credit unavailability.
- High unemployment rate makes people exist without income. Demonetization has impacted the cash-based rural economy and erode the people white money instead of eroding black money.
- Structural reforms, like the introduction of GST, has caused a fall in revenue collection and also affected small businesses.
- NBFC crumbling after IL&FS collapse added to the liquidity crisis and made another investment in slowing down of the economy.
Steps taken by the government to revive the economy:
- Corporate Tax rate cut from 30% to 22% without surcharges and cess has also cut down from 35% to 25% including surcharges.
- Recapitalization of banks has also done by infusing Rs. 70,000 crores to raise liquidity. RBI reduced the repo rate by 135 basis points within nine months.
- Government has provided a special window initiative for the real estate sector so that it will trigger construction activities and help in maintaining economic growth.
- To boost demand, the government is planning to cut the individual income tax rate as well.
Further ways to look into:
- Main drivers of the economy are government expenditure, private consumption; investors have to work harder to revive the demand and loss as well.
- Credit flow to industries: Even after efforts by RBI to cut interest rates, banks have not transferred them to customers which is the loophole of policies.
- The revival of the rural economy: Government should work on schemes like MGNREGA. Alleviating buying capacity of the rural population is the call of the hour.
- FDI, labour reforms, improving ease of doing business like temptations and rationalising GST structure, simplification of online filing of returns, and educating people who belong to small business to help them out.
- Fast-tracking the process of NPA resolution via using tactics like insolvency and bankruptcy code.
The ways to hit the Bullseye of the aim of $5 trillion economy by 2025:
- GDP needs to grow faster than the average of 7.5 per cent in the next five years, and this should be the prime aim of the government.
- To ensure a rise in purchasing power and for that, the inflation needs to be contained at 4 per cent.
- The fixed investment rate needs to increase from 29 per cent to 36 per cent in the coming period of 5 years.
India should apply a multi-pronged approach to revive economic growth and measures should be taken by the government for capital buffers and stabilizing the effect of NPA to bring confidence among investors. Now we have to look at what and how will the government tackle this economic slowdown.
LLP Amendment Bill Passed
The Limited Liability Partnership(Amendment) Bill was introduced in Rajya Sabha(Upper House) on July 29, 2021, after the approval of the Union Cabinet on July 28, 2021. Before understanding the LLP Amendment Bill let’s first understand what is LLP.
What is LLP?
Limited Liability Partnership (LLP) is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility in a partnership. It is a separate legal entity, which is liable to the full extent of its assets but the liability of the partners is limited to their agreed contribution in Limited Liability Partnership. One of the advantages of LLP is that it can continue its validity irrespective of changes in partners. It is capable of joining into new contracts and holding equity in its name.
In this corporate business form, no partner is liable on account of the independent or unauthorised actions of other partners, thus individual partners are shielded from joint liability created by another partner’s illicit business decisions or misbehaviour. Common rights and duties of the partners within a Limited Liability Partnership are governed by an agreement between the partners. However, the LLP is not reassured of the liability for its other obligations as a separate entity. As it contains components of both a ‘corporate structure’ as well as a ‘partnership firm structure’, LLP is called a hybrid between a company and a partnership.
Which are the countries where the LLP form is functional?
Countries like the United Kingdom, United States of America, Australia, various Gulf countries and Singapore are the nations where the LLP structure is functional. As per the advice of experts who have studied LLP legislations in various countries, the LLP Act is extensively based on the UK LLP Act of 2000 and the Singapore LLP Act 2005. Both the Acts allow the creation of LLP in a corporate body form which means as a separate legal entity, separate from its partners.
What is the LLP Amendment Bill & what are the key highlights of the bill?
Limited Liability Partnership Amendment Bill was passed by Rajya Sabha on August 4, 2021. All the members of the Upper House had agreed to pass this bill and have been working towards it since July 29, 2021. The Amendment Bill aims to boost greater ease of living to law-abiding corporates and to legitimize certain provisions of the Act.
Some of the important highlights of the bill are:
- Decriminalize certain offences: As per the Bill, it defines the way of operating the LLP’s provided that violation of these requirements will lead to punishment with a fine varying from 25,000 INR to five lakh INR. The requirements consist of changes in partners of the LLP, change in registered office, filing declaration of account and annual returns & agreement between the partners and an LLP. The bill exacts a monetary fine.
- Punishment on fraud: Under the Act, if a partner or an LLP carry out any forgery activities to their creditors and every individual who is involved in the hoax will be punished with up to two years of imprisonment, along with the 50,000 INR to five lakh INR of fine. The Bill increases the term of imprisonment from two to five years.
- Compounding of offences: The bill amends to provide an officer who will be appointed by the central government, may compound the offences and impose a punishable fine. If the offence was compounded by an LLP or its partners, then in this case a similar offence cannot be compounded within three years.
- Institution of Special Court: This bill enables the central government to establish special courts for assuring active trail of offences under the Act. The special court consists of a Sessions Judge or an Additional Sessions Judge. They will adjudicate offences punishable with three or more years of imprisonment and a Metropolitan Magistrate or a Judicial Magistrate for other offences. They will be selected with the accord of the Chief Justice of the High Court.
- Opening of Small LLP’s: This Bill contributes to the formation of small LLP’s in which the partners contribute up to 25 lakh INR, turnover for the coming year is up to 40 lakh INR. The government can declare certain LLP as start-up LLP.
- Non-compliance with tribunal orders: As per the Act, non-compliance with an ordinance of the National Company Law Tribunal (NCLT) is a punishable offence of up to six months imprisonment and a fine of 50,000 INR. This bill removes such offences.
- Adjudicating Officers: As per the bill, the central government may assign adjudicating officers for allotting penalties under the Act. These officers will be central government officers only. Appeals against the orders of the Adjudicating officer will lie in the hand of the Regional Director.
- Institution of Appellate Tribunal: As per the bill, the appeals cannot be made against an order that he’s passed along with the permission of the parties. The Appeals should be filed within the time frame of 60 days of order.
- Standards of accounting: According to the bill, the central government may specify the criteria of accounting and auditing for groups of LLP in meeting with the National Financial Reporting Authority.
These are the salient parts of the amended bill.
India-Bangladesh: Reopen Cross-Border Rail Lines After 56 years
On August 1, 2021, Indian Railways sent the first stone-filled freight train to Bangladesh from Damdim Station of the Northeast Frontier Railway, resuming activity on the Haldibari Chilahati route. The network between Bangladesh and India will improve due to the continuing rail course that snapped in 1965.
After the partition in 1947, seven rail joins were functional among India and then East Pakistan till 1965. The Haldibari-Chilahati rail interface is one of those courses. As indicated by the railway authorities, the main products train to convey stone chips left from Damdim station of Jalpaiguri area in West Bengal on Sunday morning.
It came to a halt at Chilahati station in the Nilphamari region in the early evening. Aside from the Haldibari-Chilahati rail connect, at present, there are four working rail routes between India and Bangladesh. The current operational rail routes are – Petrapole (India)- Benapole (Bangladesh), Gede (India)– Darshana (Bangladesh), Singhabad (India)- Rohanpur (Bangladesh) and Radhikapur (India)– Birol (Bangladesh).
This railway interface between Haldibari (India) and Chilahati (Bangladesh) was initiated by the Prime Ministers of India and Bangladesh during the PM level virtual summit on December 17, 2020. Things that can be transported from India to Bangladesh via this railway combining rocks and boulders, food grains, fresh fruits, chemical fertilizers, onions, chilli, garlic, ginger, fly ash, clay, limestone, wood, and lumber, etcetera. From Bangladesh to India, everything is allowed which exported.
“The commissioning of this rail interface will establish the India-Bangladesh rail connection and future trade. Likewise, the revamped rail network to key ports and dry docks will help boost neighbourhood trade and improve the monetary and social well-being of the space,” the high commission said.
The Government of India gave over ten-wide-measure diesel trains as an aid to help Bangladesh Railways. The virtual event was attended by External Affairs Minister Dr S Jaishankar and Railways Minister Piyush Goyal, and their Bangladeshi accomplices Md Nurul Islam Sujon and Dr A K Abdul Momen on July 27, 2020. Feni Bridge (Maitree Setu) interfacing LCS Sub room (Tripura) and LCS Ramgarh (Bangladesh) have been introduced on a virtual stage by both the Prime Ministers on March 09, 2021.
This will fundamentally further develop availability with Bangladesh. The preliminary attempt of the parcel of Indian merchandise from Kolkata to Agartala through Chattogram had led in July 2020, notwithstanding the pandemic. Bangladesh – India, the connection is presently supposed to be at its best.
The year 2021, regardless of the continuous COVID-19 pandemic, has been seeing a significant level of commitment at political and official levels. Prime Minister Modi paid a state visit to Bangladesh from March 26 – 27. He participated in the Golden Jubilee celebration of Independence of Bangladesh, the centenary of the birth of the founding father Benjabandu Sheikh Mujipur Rahman, and the 50th anniversary of the establishment of peaceful relations between India and Bangladesh. Both governments are trying different measures to rebuild the railway hub before 1965 and, another connection network existed between India and Bangladesh.
During the visit of PM Hasina to New Delhi in October 2019, the two governments chose to initiate Dhaka-Siliguri-Gangtok-Dhaka and Dhaka-Siliguri-Darjeeling-Dhaka transport administration to upgrade people to people contact between both the nations. The path run of Dhaka-Siliguri-Gangtok-Dhaka was likewise held in December 2019.
In May 2020, the second appendix of the Inland Waters Transit and Trade Protocol (PIWTT) approved two new routes in the India-Bangladesh Protocol (Sonamura Daudkandi on the Gomti waterway, and from Dhulia to Godagiri to Aricha in the current Padma), five new ports of call and two extended ports of call. Sonamura-Daudkandi Protocol Route had also operationalized in September 2020.
Haldibari-Chilahati Rail Link – Connectivity benefits:
The Haldibari-Chilahati route will give travel association with Bangladesh from Assam and West Bengal in India. The rail network will connect the prime ports, dry ports, to help the development. It will boost the financial and social advancement of the area.
Businesses and everyday citizens of the two nations will want to receive the rewards of the two merchandise and traveller train administrations when all trains are anticipated procedure on the course. With the new rail route, individuals from Bangladesh can visit tourist destinations like Darjeeling, Sikkim, Dooars in India.
Also, the Karimganj and Mahisashan rail connection between Assam and Bangladesh is to be functional from 2022. The other rail connection between Akhaura (Bangladesh) and Agartala (India) will be operational by the end of the year.
Assam Issues Travel Advisory Due To Safety Concerns
Assam Government on Thursday issued a travel advisory asking its residents not to travel to Mizoram due to safety concerns and asked those already in the state to exercise caution. The travel advisory came after the tension between the neighbouring states, days after the violent border clashes erupted in which seven people were killed.
Advisory issued by MS Manivannan, Commissioner and secretary in Assam’s home and the political department said, “Given the critical prevailing situation, the people of Assam advised not to travel to Mizoram as any threat to the personal safety of people of Assam cannot be accepted”.
A day before the Assam travel advisory, Mizoram issued a public notice stating that “It is hereby notified that there shall be no restrictions on the movement of non-residents of Mizoram traveling through Kolasib district”, followed by the phone numbers of the officers if any problem arises.
Mizoram Police has filed an FIR against Assam Chief Minister Himanta Biswa Sarma and four police officers, along with two officials connected with the clashes at the inter-state border. On charges of Attempt to murder and criminal conspiracy in connection with the violent border clashes.
On the other hand, Assam police Summoned Mizoram Rajya Sabha member K Vanlalvena And six top officials over the alleged role in border tension. K Vanlalvena told reporters on Wednesday, “More than 200 policemen entered a territory and they pushed back our policeman from our own post and they gave firing orders first before we fired. They are lucky that we didn’t kill them all. If they come again, we shall kill them all.”
Assam and Mizoram share a 164.6-km-long border, which has long been a cause of dispute. Three districts in the south of Assam Hailakandi, Cachar, and Karimganj share the border with Mizoram’s Kolasib, Aizawl and Mamit districts.
On 26 July, border tensions erupted between Both the neighbouring States Assam and Mizoram, in which 6 Assam police personnel and a civilian were dead. Both states are blaming each other for the violence on Twitter, asking the centre to intervene and resolve the situation amicably.
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