Spectre of recession facing the world

The supply side bottlenecks due to Russia/Ukraine war along with rising interest rates has the potential to adversely impact the global GDP growth rates for 2022/2023. This is also reflected in IMF revising down GDP growth estimates for countries across the globe. The European countries have already been hit hard due to erratic supply of gas from Russia. It is to be noted that European countries on average depend on Russia for 40% of their natural gas supply. 

Already, the world is facing shortage in supply of agricultural products especially wheat as Ukraine which is a major exporter of wheat globally has been hit badly in the war against Russia.

The rising interest rates by central banks globally has the potential to slow down investment activity. Also, its impact can be seen in slowing growth of mortgages in the US. Also, it can impact the capex plans of corporates globally.

The world economy is in very fragile situation currently and  a concerted effort need to be put in to protect the global economy from slipping into prolonged low growth phase as it can impact poverty alleviation efforts in Africa and Asia.

How Simplifying tax systems can generate value for India

The indirect tax system of India which was supposed to create a unified market throughout the whole of India with the implementation of GST, has only partially achieved its goals. The compliance processes with regard to GST remain complicated and its adds to the woes of businessmen. Similarly, the number of tax slabs in the GST system have added to endless confusion and litigation about exact tax slabs to which certain items belongs. India would do well with just  3 tax slabs in the GST system .i.e 5%, 15% and 25%. Rest other tax slabs cab be removed for the sake of betterment of this country.

Similarly, our direct tax system has several loopholes and provides several kinds of tax deductions. The rules are often difficult to understand and it leads to poor compliance. Some provisions are grossly mis-used. For example, Since agricultural income is not taxed, many dishonest people often report their ill gotten wealth as agricultural income. Also lot of deductions/ allowance only makes the process of tax compliance cumbersome. A simplified direct tax code can make the entire process easy to implement with better compliance. 

30 years of economic reforms

On 24th July, India completed 30 years of economic reforms which were initiated by our former PM, PV Narsimha Rao, in July 1991. Those reforms put and end to license Permit Raj and promoted greater private ownership of enterprises. It helped to boost the productivity of the Indian economy and gradually, India transformed from an economy of scarcity to an economy which is currently confident about its present and future.

It didn't happen overnight and there were some useful contribution from our former PM, Atal Bihari Vajpayee who made important contribution in infra building that led greater industrialization.  However, it would be honest to admit that the leaders since 2004 till 2021 have lacked courage and wisdom and have deliberately slowed the pace of economic reforms.

India is still far away from its true potential and a long road lies ahead of us and it would be in the interest of the country to strengthen economic reforms so that we can fulfil the aspirations of its people. Our per capita income is just a fifth of China currently, when we were at the same level in 1980. The type of politics and the corrupt politicians have betrayed us in our pursuit of prosperity and that is one area that needs to change for the betterment of nation! 

IT Industry get a new beacon of hope

 The covid19 Pandemic has accelerated the digital adoption across enterprises. Many organizations nudged by the new norm of WFH are going for transformation of core IT infrastructure. It includes not only cost saving IT interventions but IT strategies which can amplify the productivity of the organizations. This include AI driven decision making process and migration of software applications to cloud to streamline IT operation. It is being perceived by industry expert as once in a decade opportunity that can drive the growth of  Indian IT companies going ahead.

The clear impact of the Pandemic can be seen in the size of deals being signed by IT majors which has shown significant increase over average size of deals signed over last 2 years. It gives a strong indication of the growth momentum expected among top tier IT companies. 

Though, there is headwind of wage hike for FY22 in coming quarters, it is expected that IT companies should be able to broadly sustain the EBIT margin seen in Q3FY21-Q4FY21 over FY22, led by positive operating leverage and admin and travel expense still in control.

Though, the valuations have jumped for all these IT companies, it is expected that the should be able to sustain  these valuation multiples, if deal win momentum remains strong. We expect that Indian IT companies are able to use this opportunity to develop cutting edge solutions that will lead their transformation into top tier IT companies across the Globe.

Why self discipline is the key?

We all have heard that talent is overrated. The statement is true as we know countless stories of people with immense talent failing to achieve anything in life. This is because in most cases, the secrets to achieving anything meaningful is revealed to us by the nature when we devote certain amount of dedicated hours depending upon the magnitude of the problem. All real events are complex at the core and yet government by few basic laws.  This is the ultimate law of nature.  Moreover, the key tendency of Universe is to achieve a state of higher entropy which has higher randomness. This increase in disorder can be stopped only by apply external constructive force which helps to maintain higher energy (or low entropy state) to achieve anything. This external constructive force is nothing but state of self discipline which helps to maintain a state of high motivation and pinpointed focus towards the target.

So, self-discipline is the the utimate success mantra in this Universe, through which a person can achieve his goal through consistent effort towards a well-defined goal. This quality was the one on which our ancient rishis focussed in ancient times. But with the advent of the modern age, our generation finds it difficult to control themselves and often find themselves indulging in gambling, Non-veg food, procastination etc. and its leads to massive failures in life. Remember, a high degree of self-disciple is required to use our brain consciously for our benefit.

Crusade against superstitions

It has been around 20 years since we entered the 21st century. It's high time that we analyze our different religious practices with a critical bent of mind to remove various superstitions. The main purpose is to target our energy towards productive and right things rather than devoting our time towards destructive thought process or useless rituals.

I would like to mention the recent incident where an 18-year-old Muslim student beheaded a French teacher for showing the cartoons of Prophet Mohammed. It is an absolutely condemnable incident and the boy fully deserved the punishment as he was brutally killed by French Security Forces. There is no place for blasphemy related views in a modern civilization and this current thought process among  needs urgent reforms.

Similarly, Hindus should abstain from useless rituals and focus should be on establishing connnection with the almighty through every day generous deeds. Our focus should be on helping needy people, being kind towards animals and preserve the pristine plant life of the mother Earth. 

The reform in our religious practices is absolutely necessary so that we live a more meaningful life in full harmony with other creatures and leave a better planet for our coming generations.

Advent of Artificial Intelligence

 Artificial Intelligence has become a buzzword in recent times and has the potential to transform practically all sectors leading to a massive increase in productivity.  It involves gathering a huge amount of data about the current behaviour of a system and utilizing algorithmic framework and probabilist thinking to make the best possible decision under given circumstances. These computations are quite complex and require high computing power. For Example, the use of AI can help to decide the best possible crop combination depending on price, weather and the nature of soil. Similarly, AI can help in the diagnosis of patients based on the results of certain tests. The possibilities are just immense and the capacity of AI can be enhanced with increase in our knowledge of the nature of real world situations and the best way to replicate them through our code. Nowadays, Python, a computer language is often used in the design of AI based tools

At the fundamental level, its about making prediction based on current data set. It can help humans to increase the effectiveness of decisions which are required to be made in tough situations that involve complex set of data. It involves the use of principles from other branches of science, as two events can affect each other only when they are within a given light cone as specified by the General theory of Relativity. It also indirectly implies that we live in a causal universe with a high degree of deterministic nature, and the outcome can be easily predicted if one knows the initial condition and the laws governing the situation.