Hello friends, I am 2021.
“Hello friends, how are you doing? I am glad you are safe. By now you already know me – I am 2021, welcome to my age! Firstly, kudos to you for successfully graduating 2020. It’s okay if you didn’t fetch good marks. I understand it was a challenging year with too many out of syllabus questions. Therefore, I am exempt you from everything this year, except for wearing masks and paying GST (Sorry, I don’t make those rules).
You see, I have come here to deliver an important message. You might be thinking you graduated 2020, and life is all cakewalk now. However, the last decade has been a mess, especially the last year and it’s your job to clean it up. Else, as I see the future right now, it’s all abyss! Your hashtags from 2020, the WhatsApp laurates, and manufactured news are not going to work anymore. I am 2021 and much smarter than 2020. Don’t be scared, I just look tough, but if you follow one simple ground rule, I bet this year would be a great grand party!
You see, just look around yourself. Everyone is eager to tell you their version of what, when, who, how, and where – it’s impossible to differentiate between the real facts and fake ones. It’s exciting to hear stories, however, it’s not bedtime yet. You have a life to live and a world to live in. Therefore, it’s important you focus on one important aspect – the why of everything.
Trust me, I am 2021, I am not your foe. Just find you why behind everything – be it the economy, the politics, or your own life – don’t be shy to find your why. You will have to dive deeper through all the fabricated stories – it’s a tough job. However, be persistent and clarity awaits you on the bottom of everything where you will find all the secrets buried. Bravo, do you copy?
Btw folks, when are you throwing a 2020 graduation party? Do invite me. It’s never too late to be happy. Take care.” #PleaseNoHashtag.
The scarcity of people asking ‘why’
We have all witnessed the spread of misinformation in the past few years and not just on social media, but even the press and the print media and every other aspect of life. Fake financial apps scamming people into loans, people being misguided for a chip embedded in 2,000 notes, mobs attacking individuals merely on suspicion, the multifold stories on the death of a celebrity including alleged black magic and the ten rupees coin still being widely unaccepted – these are all examples of how misinformed and misguided we have become as a country. Over the past decade, the sources of news have increased, and a the same time, almost every source has also been corrupted by their sponsors. There’s a scarcity of people asking why to such authorities and sources. Discussions are based on distorted facts and arguments are based on myths. It has become pertinent to fact-check before believing and research before talking. We bring you here some of the important why’s of today and an explainer on various recent events.
Why aren’t the farmers buying the government’s argument against MSP for crops?
The protests against new farm laws largely surround the concern for minimum support price (MSP) – a guaranteed price at which the government buys the proceeds of the farmers if the open market has lower prices. However, this is not guaranteed by any law and thus, there is always uncertainty around it. While many promises have been made in the past before the elections by various parties, to legalise MSP, the same have never been fulfilled till date. After the ongoing farmer protests, Government opened up its stance on the MSP and argued that half of India budget’s expenditure will go in the procurement of crops if minimum support price (MSP) is made legal.
However, according to the experts, this is not the actual case, as it depends on the market circumstances of the crops to a large extent. The Karnataka state government adopted the Market Intervention Scheme for tur (arhar). The production of tur dal was 14 lakh tonnes during the last year, however, the government was required to procure only 2.5 lakh tonnes because the market rates stabilised after the intervention. With just 15% procurement by the government, the prices of tur were stabilised in the market. The presence of the government in the market makes a huge difference to keep private traders in check who indulge in cartelisation in the absence of any government control. To keep the market forces under control, government’s intervention is important and this is only possible when the government legalizes MSP, as it will keep a check on the middlemen too and provide competitive prices for the produce.
Why INR 1.05 lakh crore GST collection is still not good enough?
For a long time, Government has been trying to achieve its GST collection target of INR 1 lakh crore per month and recently, the government has been able to achieve so for consecutive months, passing record for highest collection each month. Besides, for the first nine months of the year, the GST collection has summed to INR 7.8 lakh crore. If the trend persists, the deficit in collections shall be truncated and the final shortfall would be in the region of INR 80,000 crore to INR 1 lakh crore for the current period. Given the very slow start, this will be an achievement. However, apart from screwing the GST laws to extract maximum possible tax collection from the businesses, Government spending has been a key feature behind the GST collections.
There were liquidity infusions by Reserve Bank of India (RBI), free food being given to the poor, increase in the MGNREGA wages and payouts, credit guarantees to various business segments, increase in capital expenditure of the government, advances to government employees for spending, and many others. Intuitively, all these measures led to higher spending, which was the main objective of the stimulus and automatically generated revenue for the government in the form of GST collections. However, if the numbers are put in perspective, it seems that the GST collections still fall short of the expectations, though they are higher than ever before, especially when Government provided INR 2 lakh crore credit guarantees, INR 30 lakh crore through production-linked incentive (PLI), INR 1.43 lakh crore through Kisan Credit Cards, and through many such other schemes. Besides, the growth in GST collections is being driven by Government spending and not the market players. Thus, it seems there’s still a long road to be travelled before the Government can celebrate the success of GST implementation. Please note, GST laws have completed 3.5 years and we are still talking about its breakeven.
Why the cryptocurrency bitcoin rallied during the recent past?
Bitcoin is a digital currency that runs on a blockchain and thus, isn’t controlled by any regulator. Bitcoin has been on a rally in recent past and just a few months back when it was hovering around USD 10,000, it peaked at USD 40,625 last month. There was a similar rally in 2017 when the bitcoin rallied and all of sudden when the entire world was talking about it, the bitcoin price dropped from USD 20,000 to USD 3,000. Bitcoin is incredible and apart from its great features, it is highly unpredictable which makes a lot of people feel it is just a bubble which might burst someday soon. However, this time bitcoin is rallying on a different note. In 2017, the retail investors helped the rally of Bitcoin to make some money out of the bull run. People weren’t invested in the long run and were primarily investing because of FOMO — the fear of missing out. However, this time it seems the participation is driven by institutional investors .
Fidelity’s survey of large institutional investors in the United States and Europe found more than a quarter owned Bitcoin. Paypal announced in October that it would allow its customers in the United States to buy and sell using Bitcoins. And so on many institutional investors might have joined the league this time which is the reason why the Bitcoin’s rally this time, is different. Meanwhile, the Indian government is planning to ban Bitcoins and consider bringing its own Central Bank Digital Currency (CBDC). The concept of digital currency certainly will go a long way. And given the current trends, it is prudent to stay put and watch the change happen.
WHY are the airlines moving towards smaller airports?
IndiGo, SpiceJet, GoAir and others have all announced new flights and interestingly, a majority of these flights connect to tier-2 and tier-3 cities. IndiGo surprisingly announced seven new stations including Leh, Darbhanga, Agra and also Kurnool and Bareilly which will be connected by air for the first time. IndiGo will directly kickoff with SpiceJet in Darbhanga and other peers such as Vistara, Air India, and GoAir, on routes like Leh and Rajkot. The government has been trying to push regional aviation for a long time, however, the same didn’t prove much fruitful. However, there has been a spur in the number of flights connecting to the tier-2 and tier-3 cities after the COVID-19 pandemic. It’s becoming a fierce competition and finally, India is now entering into regional aviation. So what made the aviation companies drive this change?
Post-pandemic more and more people have preferred to travel through flight, even for shorter durations, for safety reasons. This has increased the demand for the flights such that the tier-2 and tier-3 airports have already reached the pre-pandemic traffic. People have become more open to spending on flights to reduce their travel times. Besides, railways have been irregular and riskier during the post-pandemic period. FlyBig, the recent addition to the aviation sector, also has its primary focus on surrounding the Government’s UDAN scheme which encourages tier-2 and tier-3 connectivity. Thus, overall the regional aviation has kicked off in India and it would be interesting to see if the same continues after railways start full-fledged once the country is vaccinated.
WHY the privacy concerns around WhatsApp doesn’t make sense?
Websites don’t earn from your usage, as much they earn from their advertisers. However, advertisers need data to target customers and there begins the hunt for collecting data. Now, the data collected by the sophisticated apps and large companies such as Google or Facebook is anonymized meaning though your specific data collected (which is also mentioned on its apps and websites) it does not reveal your identity to the advertisers. It only reveals the relevant data such as age, gender, preferences, approximate location, apps installed, services used, etc. along with some numerical id assigned to you. This helps advertisers target you with appropriate products. However, there are many apps which do not anonymise your identity. There are many small and large associations where you might have signed up even offline and the data collected through forms might have been sold to other advertisers – it’s becoming customary!
WHY recommending stocks itself is a sham business?
On January 13, CNBC Awaaz co-host Hemant Ghai, his wife and mother were barred from the stock markets by the Securities and Exchange Board of India (SEBI). According to the SEBI, an analysis of the trading pattern of the two entities – Jaya Hemant Ghai and Shyam Mohini Ghai for the period between January 2019 and May 2020 show a high correlation of the trades of the aforesaid entities with the recommendations furnished in their show Stock 20-20 aired on news channel CNBC Awaaz. These trades violate provisions of the Securities and Exchange Board of India (SEBI) Act and the SEBI (Prevention of Fraudulent and Unfair Trade Practices) Regulations. The co-host through his family has prima facie earned proceeds amounting to INR 2.95 crore through the limited trades during the aforesaid period. CNBC Awaaz has terminated Hemant Ghai as soon as the order was passed for misleading unsuspecting viewers.
Keeping this case apart, the whole system of predicting a company’s share price and recommending stocks seems sham business as the process of analysing stocks itself is a long and difficult process involving assumptions, availability of data and a lot of opinions. However, when you see the television anchors they hard do any analysis but offer you recommendations based on technicals and merely indicators. While many consider technicals a scientific/statistical method, do note that the whole prediction is based on one unrealistic assumption – ‘Stock patterns shall repeat themselves because humans react to market events with remarkable consistency.’ Thus, the whole analysis behind scrip recommendations is bound to fail any day.