De Dollarization is happening at a Stunning Pace. India's move so far !!!!!

The exercise of de-dollarisation, which was primarily on the drawing board for decades, is now taking wings. The process  has  accelerated following the  onset of the Russo-Ukrainian war and the subsequent, unprecedented sanctions against Russia. Almost surely the principal factor driving countries to move away from the current global financial system is, the U.S. government’s ability and ever-increasing willingness to weaponize the dollar against its political adversaries and those who refuse to go along with its political program.

The establishment of an alternative global banking system by other countries like  China, India, Brazil are slowly taking steps.  Several days ago China & Brazil  has decided to  dump the U.S. dollar as an intermediary currency &  will now conduct bilateral trade in their own currencies, exchanging yuan for reais.

Beijing has similar currency deals with Russia, Turkey, Pakistan, and several other countries—and it continues to expand that list of countries. Members of the China-led Shanghai Cooperation Organization (SCO)—a bloc that consists of China, Russia, India, Pakistan, Uzbekistan, Kazakhstan, Tajikistan, and Kyrgyzstan—agreed to increase the use of their national currencies in trade between the countries.

India, also considered an ally of the United States, like China, has stepped up its efforts to internationalize its own currency, the rupee, and in doing so is helping to further the de-dollarization trend.

The Reserve Bank of India (RBI) has already given its nod to various banks from 19 countries to open Special Vostro Rupee Accounts (SVRAs) to facilitate transactions in rupees(INR ₹). Latest country joining  is  Bangladesh in addition to Botswana, Fiji, Germany, Guyana, Israel, Kenya, Malaysia, Mauritius, Myanmar, New Zealand, Oman, Russia, Seychelles, Singapore, Sri Lanka,Tanzania, Uganda, and the United Kingdom

Many more countries have also expressed their interest in transacting in the Indian currency ₹. The global acceptance of India’s digital payment systems like the Unified Payments Interface (UPI) has been steadily increasing in the last few months.

 

The BRICS (Brazil-Russia-India-China-South Africa) block is also looking at developing a new reserve currency based on a basket of currencies of the member nations.

Many pundits have opined that the exercise to make the Indian rupee global is still just a dream at this time. There is no doubt that there are several challenges to this exercise but let us take one step at a time. The process has begun, we need to see if this can be a success.

India likely to become third biggest economy by FY28

 

India likely to become the third-biggest economy behind the US and China by FY28, two years earlier than initially expected, overtaking Germany and Japan, according to the International Monetary Fund (IMF) World Economic Outlook database.

India overtook UK to became the 5^th largest economy this year.

India's GDP would match Germany's in size to become the fourth-largest by 2025–2026.

The World Economic Outlook of the International Monetary Fund (IMF) predicts that it will surpass Japan in growth and move up to the third-largest position by 2027-28 (FY28). 

 

India’s rapid progress…

• Most developed economies hit hard by pandemic and war-triggered inflation
• They will grow marginally or even go into recession
• India’s growth also took a knock but economy expected to expand at good pace
• Rupee has depreciated less than many currencies against the dollar

…but not just relative out performance

• India has sound macro fundamentals.
• Inflation high,but is not skyrocketing.
• Current account deficit high but expected to moderate 
• Forex reserves down but still at nearly $550 b Fiscal situation is comfortable 
• Banks are in a strong position and credit cycle is picking up 

Number of crorepati taxpayers up 20% to 97,689 in AY 2018-19: CBDT data

The Central Board of Direct Taxes  of India (CBDT) has now come out with a detailed break-up of data collected from income tax returns (ITR). 

According to the report, the number of crorepati taxpayers in India shot up 20% to 97,689 during assessment year I,e AY  2018-19 or FY 2017-18. 

The number of such individuals having taxable income of over ₹1 crore stood at 81,344 during AY 2017-18.

Here are few   important  statistics:

  India's super-rich club of those earning taxable income of above ₹500 crore has only 3 individuals.  

over 1.7 lakh people filed income tax returns with zero income.

There were at least 89,793 people in India who earned in between ₹1 crore and 5 crore. In the ₹5-10 crore income bracket, India had 5,132 taxpayers while the ₹10-25 crore range had a little more than 2,000 individuals

If the salary break-up is considered, most of the taxpayers (over 81 lakh) seem to be earning a salary in between ₹5.5 lakh and ₹9.5 lakh. The average salary income in this category is ₹7.12 lakh.

If taxpayers across categories like individuals, HUFs, companies, firms, etc are included, the number of those with taxable income of more than ₹1 crore per annum rises to about 1.67 lakh, a 19% jump from the previous year.





Over all, more than 5.87 crore income tax returns were filled, as per the statistics generated from e-filed returns (digitally signed, e-verified or where ITRV has been received) submitted up to August 15, 2019.

The data revealed that over 5.52 crore individuals, 11.3 lakh HUFs, 12.69 lakh firms and 8.41 lakh companies were among those who filed returns. 

Here is the link to the report.