The year 2016 was critically important in determining India’s economic growth; while some business events ensured economic destabilisation of an entire country, others forecasted robust growth momentum supported by expectations of a rebound in the economy. All in all, this year India has seen tremendous advances on the economic front.
From strengthening international economic alliances to sustaining a growth rate of over 7.5 percent in the midst of a bleak global economy, our country has made its mark in the world. As we close this year, let us look back at the significant events that have shaped business and finance in our country.
India’s First Gold Mine Auction
On February 26, 2016, Vedanta Private Limited won the country’s first ever gold mine auction. The Baghmara gold mine in the state of Chhattisgarh was put up for auction in an effort to open up the sector to private companies. Vedanta had quoted the highest bid equal to 12.55 percent of the Indian Bureau of Mines’ price.
Vijay Mallya Left India
Debt-riddled Indian entrepreneur Vijay Mallya escaped prosecution and punishment back home by leaving the country on March 2, 2016. His departure led to much political mayhem and disappointment for Indian banks, which had hoped to recover some of the loans made to him. According to news reports, the liquor baron owes something between Rs 7000 crore and Rs 9000 crore to Indian banks.
Punjab Food Scam Unveiled
In April 2016, the unfolding food scam in Punjab pointed to one of the biggest ever irregularities detected in the state. It was discovered that foodgrain worth about Rs 20,000 crore was missing from the FCI godowns. This was bought by the state with loans from various banks. News reports suggest that Indian banks may have incurred a loss of about Rs 12000 crore due to the scam.
Sahara Land Put Up For Sale
On May 30, 2016, HDFC Realty and SBI Capital Markets announced India’s largest ever pan-India land sale. About 4,700 acres of land owned by the Sahara Group in 14 states of the country was put up for sale. The auctioneers received the go ahead from Securities and Exchange Board of India (Sebi) to auction these 60 properties and raise about Rs 65000 crore.
Flipkart Acquired Jabong
On July 26, 2016, online retail giant Flipkart acquired fashion e-commerce store Jabong for USD 70 million. Flipkart signed the deal through Myntra which it had previously acquired. Not only did Flipkart manage to beat others like Snapdeal, Aditya Birla Group, Future Group, and Amazon to make the acquisition but also went on to consolidate its online customer base. Myntra, Flipkart, and Jabong together now have 15 million active monthly users.
RBI Gets A New Governor
Raghuram Rajan was probably the most popular governor the RBI has had. His hawkish policies are majorly responsible for curbing the free fall of the domestic currency and for bringing down the inflation levels. His decision not to seek a second term was largely disappointing. On September 6, 2016, Urjit Patel took over as the new RBI chief. Patel was Deputy Governor of RBI between 2013 and 2016 and had overseen the central bank’s monetary policy.
Reliance Jio Services Launched
Reliance Jio’s launch of services on September 5, 2016, came as a complete game changer in the Indian telecom industry. Not only did Mukesh Ambani-led Jio start to offer free voice calls, it put out an initial offer between Rs 149 and Rs 4999 for different groups of users. The highlights of Jio’s offering are the cheap pricing and the great amount of data it offers for the 4G LTE customer.
GST Gets President’s Approval
After having overcome insurmountable opposition from all quarters, the Goods and Services Tax Bill finally received President Pranab Mukherjee’s approval on September 8, 2016. The GST replaces the VAT (Value Added Tax), entertainment tax, service tax, central excise duty, and a number of other taxes. By November, the GST slabs (0%, 5%, 12%, 18%, 28% and 28% plus cess) were also unveiled. The GST shall take effect from April 1, 2017.
Union & Rail Budgets Merged
Doing away with a 92 year old practice, the Indian government decided to merge the Union budget with the Railway budget starting next year. On September 21, 2016, the cabinet approved the merger and also approved of advancing the date on which the union budget is unveiled each year. The budget will now be presented on February 1 each year.
ATM Security Breach Revealed
In one of the greatest financial security breaches to affect the country, over 32 lakh debit cards issued by various banks of India were reportedly under threat of financial fraud. By the time news reports announced the breach in October 2016, about Rs 1.3 crore had already been stolen from people in various states. Indian banks recalled and replaced the cards of all the affected customers.
Cyrus Mistry Ousted As Executive Chairman of Tata Sons
Sending shock waves through the corporate world, the board of Tata Sons announced the removal of Cyrus Mistry as its Executive Chairman and instated Ratan Tata as its interim Chairman on October 24, 2016. While initials rumours suggested that there was a clear difference in work ethics between Mistry and the Tatas, the company may see a long drawn legal battle over the issue.
PM Undertakes Demonetization Drive
On November 8, 2016, Prime Minister Narendra Modi undertook what has been called surgical strikes against the menace of black money. The PM announced the demonetization of Rs 500 and Rs 1000 notes with immediate effect sending the country’s banking systems into a deep state of chaos. Crowds have been seen thronging banks and ATMs ever since in an effort to exchange the old notes. New 500 and 2000 currency notes have been introduced.
International Solar Alliance Framework Agreement Signed
On November 15, 2016, over 20 countries of the world including India, France, and Brazil signed the International Solar Alliance framework agreement. Back in 2015, India and France had launched the alliance to promote use solar energy on a global scale. Other nations have three months to join the alliance and which shall formally enter into force after fifteen of the member nations ratify it. The Alliance shall be headquartered in Gurugram, India.