Year 2016 had its fair share of personalities who either influenced events that had a bearing on India’s and the world’s economy or were central to them.
Here are a few among those that made news this year.
Who is he: Prime Minister of India
Why did he matter in 2016: This was Narendra Modi’s year in more ways than one. India’s prime minister can rightfully take some credit for seeing the constitutional amendment for the contentious Goods and Services Tax through parliament, more than a decade and a half after it was first proposed. Although an April 2017 rollout of the landmark indirect tax regime, which will overhaul the current one, looks tough following the government’s failure to get subsequent legislation through parliament, it can safely be assumed that by September the new system should be in place.
But what India will remember Modi most during 2016 will be his decision to abolish Rs 500 and Rs 1,000 currency notes in an ostensible bid to strike at the country’s black money economy. Although the government got a lot of much deserved flak for its shoddy implementation of the move, what cannot be disputed is the fact that Modi staked his own political future on this, and to that extent, showed his willingness to walk the talk. Whether or not this will result in any gains, economic or political, only time will tell.
Ratan Tata and Cyrus Mistry
Who are they: The current and former chairmen respectively of Tata Sons, the holding company of the Tata Group
Why did they matter in 2016: On 24 October, Tata Sons, the group holding company of the $100 billion Tata Group sacked its chairman Cyrus Mistry, and brought back former chief Ratan Tata as the interim head. This sparked what perhaps became the most controversial boardroom drama India has seen in a long time.
Both sides hurled allegations and counter allegations at each other, with Mistry alleging bad business deals, a flawed foreign acquisition strategy and even corruption, and the Tatas questioning his competence and bringing resolutions across listed group companies to oust him from respective boards, eventually forcing him to resign.
Even as Mistry moved the National Company Law Tribunal against the Tatas, the Enforcement Directorate is reportedly probing charges of fraud levelled by him against AirAsia executives.
Who is he: Former governor of the Reserve Bank of India; professor at the University of Chicago Booth School of Business
Why did he matter in 2016: Although economists, punters and journalists typically hang on to every word central bankers utter, chiefs of the Reserve Bank of India (RBI) have seldom found themselves at the centre of a raging controversy. Until Raghuram Rajan came on the scene, that is. Not only was the IIT-IIM-MIT trained Rajan one of the most outspoken Indian central bank chief, he also courted his fair share of political controversy.
Rajan’s decision to hold off on reducing interest rates did not go down well with Bharatiya Janata Party (BJP) leader and Rajya Sabha member Subramanian Swamy who levelled unsubstantiated allegations against Rajan, saying, he was not “Indian enough” and was working against the country’s interests.
In July, Rajan decided not to seek a second term at the RBI and decided to return to his teaching assignment. The following month, the government announced the appointment of his deputy, the Oxford educated Urjit Patel, as the next RBI governor. Citing his comments made some years back, subsequent reports spoke of how Rajan may have been opposed to the government’s move to demonetise Rs 500 and Rs 1,000 notes, but this has never been substantiated as Rajan has chosen to maintain a stony silence following his exit from the central bank.
Who is he: Chairman, Reliance Industries Ltd
Why did he matter in 2016: India’s richest man, Ambani formally re-entered the telecom space in September this year when he launched a $20 billion enterprise Jio, which, besides superior speeds on a 4G platform, offered its subscribers free voice calling and free access for the first four months. Jio’s lower than normal tariff plans disrupted the incumbents, who were forced to follow suit, bleeding their balance sheets in the process.
Yet, this wasn’t without its fair share of controversy, with Jio, already the largest and the fastest growing 4G network in the country, alleging that incumbents including Airtel, Vodafone and Idea had ganged up against it, and were not offering enough points of interconnect, making it impossible for voice calls to go through.
Moreover, Jio’s entry forced the UK-based Vodafone Group to pump in a staggering Rs 47,700 crore into its Indian subsidiary. Ambani’s younger brother Anil Ambani (whose telecom company Reliance Communications is partnering Jio) too joined forces with smaller rival Aircel, to create a Rs 65,000 crore entity and kickstarting a round of consolidation in the telecom sector, that could continue.
Who is he: President-elect of the United States
Why did he matter in 2016: Being a rank outsider to politics, no one gave this controversial real estate mogul turned reality TV show host any real stab at entering the White House. Yet, riding on what has been perhaps the most divisive election campaigns ever, not only did Donald Trump win a Republican nomination, but also defeated a former first lady and secretary of state Hillary Clinton, to emerge as the president-elect of the United States.
While a lot has been written and said about the 2016 US presidential elections, what remains to be seen is what a Trump’s presidency would mean for countries like India.
Although we are not in the business of predicting the future, it can be safely assumed that the Indian IT sector, which exports more than $100 billion worth of software and services to the US, employs almost four million people and gets half of its revenues from that country, will be waiting with trepidation of what a Trump regime might do on immigration and jobs. After all, he rode on a plank of protectionism - tougher immigration laws for blue collared jobs back home and an opposition to the present work visa regime. This would be a double whammy of sorts of the Indian IT sector, which has been battling a slowdown, with future growth prospects looking grim.
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