Impact of Covid 19 on Indian Economy

It has been more than a year and a half and the world is still struggling with a novel coronavirus pandemic. The nation went into strict lockdown for the first time in March 2020, which brought the urban economy to a standstill in the first quarter of FY 2020-21. A slow recovery was seen from the second quarter. The resurgence of demand in festival season and bumper agricultural output provided some support to the Indian economy and GDP in FY21 contracted by 7.3%.

With the development of vaccines and a lower number of cases, it was estimated at the beginning of FY22, that India will grow around 12% this financial year but the second wave of the pandemic, made things take turn for the worse. While there was no nationwide lockdown this year, local restrictions in major states impacted various sectors of the economy.

Sector wise impact

AGRICULTURE – With the second wave, the virus also penetrated rural India and this is a matter of concern as last time, GDP contraction was limited to some extent, due to support from the rural economy. In the second wave, stricter restrictions were placed in rural regions. Mandis stayed closed. Farmers could not sell their output and crops were rotting in the field. This also impacted the vegetable vendors and processing industries.

MANUFACTURING – The manufacturing sector was also impacted in both waves. Factories had to work with reduced workers. Due to fear of lockdown, many casual laborers went to their homes. The supply chain was also disrupted due to varied lockdowns in different states. This pushed the cost of the products and ultimately lead to inflation in the country. 

SERVICE – The service sector also provided relief and helped in recovering the economy. Thanks to the digital revolution, the majority of the businesses in the service sector shifted online. Employees could work from home and this helped the economy going on even during lockdowns. However, those businesses which require physical contact, like spas, salons, cinemas, etc. had to suffer during the pandemic.

AVIATION – This is the sector that is most hit by the pandemic. Flights get banned as soon as several positive cases begin to soar. People are avoiding unnecessary travel and tourism and the number of footfalls in airports is reducing. 

UNEMPLOYMENT – Unemployment in the country also increased during the pandemic. Companies were working at low capacity. To reduce costs, employees were laid off. Casual laborers went home, which put pressure on rural jobs, especially jobs under MGNREGA. In July, the unemployment rate is around 7.68% in India.

INFLATION – Due to increased prices of crude oil abroad, low supply of casual laborers, and restrictions in transportation, lead to an inflation of prices of goods. To boost liquidity, RBI is also increasing the money supply, which is also leading to an increase in the prices of goods and services. CPI Inflation in the country is around 6.2%, which is more than RBI’s commitment to tame inflation under 6% under the monetary policy agreement.


So overall, all macroeconomic variables are showing negative signs during the pandemic. Some online businesses like Zomato, OTT platforms have benefited from people staying home. But most of the businesses have suffered due to pandemics. Both government and the central bank are trying to control the impact of the coronavirus on the economy. Both the health and economy of the nation are important. Let’s hope that due to stricter compliances and widespread vaccination programs, India can avoid the impact of the third wave, as another wave will further weaken the economy.

Crisis in the Telecom Sector

You must have read in the news about the plight of the Vodafone-Idea company. None of us could have ever thought, the companies which were so successful in their fields, would have to face such miserable days. If I had asked you 4 to 5 years back, which mobile telecom operator you use. Your answer could have varied between Airtel, Aircel, Vodafone, Docomo, Idea, Reliance, BSNL, Videocon, and even more. But if ask you the same question today. You would not have any answer other than Airtel, VI, or Jio. The Telecom sector now has a trioka system operating in it. (or Rule of 3). Don’t be very surprised if there is a duopoly in the near future as lenders of VI are considering taking the company to insolvency firms to get back their dues. So why this happened? Why is an industry that used to be so dynamic and competitive, is left only with two major players, and every other company is wiped out? We will find out in this article.

Fall of Telecom Companies – Role of Jio

In 2016, Reliance Industries limited made an ambitious announcement. They were ready to enter the telecom sector and promised to provide lucrative offers to everyone. Unlimited internet, Unlimited messaging, Unlimited voice calls. And all this at the cost of nothing. When Jio was launched, crores of Indians came to get the sim of Jio. Who knew, that this new player in the telecom industry will change the fate of all the existing players. Existing companies were not aware that their future was not left for years now and they were going to end soon. As soon as people started shifting to Jio, it became even difficult for then market leader Airtel to compete with Jio. Companies that had less than 10% share simply could not survive and they simply had to exit.
This is known as a predatory pricing marketing strategy. Basically, if you have huge cash to burn, then burn it to such an extent, keep your cost low, and once the competitors are out of business, you start making your profit. Customers who were now habituated to free internet and free calling, cannot agree to less than that. Therefore, if other companies had to stay in business, they have to agree to the demands of customers. Companies like Airtel and Idea, which once used to charge Rs 200 for 1 GB of data for 1 month of internet, now had to start taking losses to compete with the Jio.

Crisis in Telecom Sector

But wait, if you think Jio was the sole reason for the plight of all the telecom companies. Then, you are wrong. In fact, the major reason for today’s crisis is not Jio but policymakers, the government. Government demands huge regulatory fees from the telecom companies, for their operation and spectrum usage. Government charges up to 15% of the Adjusted Gross Revenue(AGR) as regulatory fees. While, in no major economy, it’s more than 3%. In fact, the majority of the dues of VI are AGR dues that are owed to the government.


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So this is the overall scenario of VI. There were already huge costs, telecom companies had to bear by paying regulatory fees to the government. By the entry of Jio, they further had to cut down their price. Since they lost their customers to Jio, which now has the largest market share, they also lost their revenue to pay dues and finding it difficult to honor the debt commitments. Their fate is now left at the mercy of the government. They can only survive if the government decides to bail out the company. As per estimates, VI needs a minimum of Rs 70,000 crores to survive further.

Small Steps, Substantial Results

If you have ever studied finance, you would surely embrace the power of compounding. How money if compounded over several years can turn into an attractive sum. But, have you ever thought this rule of compounding is applicable not in finance but personal life as well? I read a book called “Atomic Habits” by James Clear. The principle of atomic habit will give a different perspective of doing things. Atomic means small, Habit means something which is inculcated in your daily routine that you cannot live your day without doing them. Some of the basic habits inoculated in everyone are like brushing the teeth, taking bath, sleeping on time. Similar to these, we can incorporate new habits in ourselves which will show amplified benefits after multiple years, just like how compounding works. This can be anything like reading the newspaper daily, practicing guitar for 10 minutes, doing a workout for 30 minutes. Anything small, but remarkable.

Why 1% matters

  • If we get 1% better each day, we will get 37 times better by the end
  • The habits don’t show results quickly. Therefore we give up because we don’t see any results coming but you need to understand the 8th wonder of the world. According to Albert Einstein, compounding is the eighth wonder of the world. 
  • Atomic Habits + Consistency = Life Changed

Screw Goals and Focus on System

Another idea the book highlights is focusing on the system and forget the goals. A similar idea has been put by Jeff Haden in his book The Motivation Myth. This is a very contrasting view as from childhood, we have been asked to focus solely on goals. However, the major driver of success is not the goal but something else. Before we find out that, let’s see what are the major problems with the goals.

  1. Winners and Losers have the same Goals. So it can’t be the goals that differentiate the people.
  2. Achieving a goal is only a momentary change.
  3. Goal restricts our happiness. We tend to think that we will be happy only once we reach the goal and thus agreeing to compromise with the present journey.
  4. Goals are at odds of long term success

So, if not goals, what is it that we should be focusing on. It’s the daily system or framework of the path towards the goal. In simple words, instead of focusing on output, focus on inputs. What will be the output is not in our control, but we surely can give our best by focusing only on inputs. The things we have in our hands. So, find a goal, research about the journey, then fall in love with the journey, forgetting about the goal and results. The purpose of setting goals is to win the game, the purpose of the system is to continue playing the game. If we focus on playing, the score just takes care of itself.

How to build Atomic Habits

Here are two of few tips given by James clear.

  1. Cue -> Make it obvious. Design your environment in such a way that you have fewer steps between you and your good behaviors and more steps between you and your bad behaviors.
  2. Craving -> Make it attractive. Do something which makes you enjoy that work.


So this was a reflection of one of the ideas of the best-selling book, “Atomic Habits”. If you have some time to invest, you should definitely read this book once. It will give a new perspective of getting things done and living life happily.

The Biggest Scam of Financial Markets

In October 2020, scam 1992 was released as a major success, which highlighted the story of Harshad Mehta. This is the story where the ambitions of a man shook the entire financial markets of India. So what is scam 1992 all about? Is it possible for one man to commit such a big fraud alone? Let’s solve the mystery in this article?

Harshad Mehta

So let’s start with the background of Harshad Mehta. His full name is Harshad Shantilal Mehta. Born in Rajkot on 29th July 1954, Harshad was an ambitious child. His father was in small-time textile business. In his career, he initially started as a salesman at New India Assurance Company Limited. While doing this job, his love for stock markets brewed up. He kept changing jobs several times, by serving series of responsibilities at the brokerage firms. Slowly, he kept growing and by 1990, he became so famous that media started calling him “Amitabh Bachchan on Stock Market”
After doing the job for many years, he once decided to leave the job and become an entrepreneur. This was when he started his company “Grow More” with his brother. He actively started trading in 1986.

Scam of 1992

The scam of 1992 was first reported by Sucheta Dalal in the second quarter of 1992. This was unprecedented and “scam” became a buzzword back then.
At that time, brokers were not allowed to borrow funds from the banks. This is because that money could be used for manipulating stock markets and make gains. However, Harshad under the table colluded with the banks, showed them an opportunity to make a bonanza by investing in stock markets. This is how he, illegally started diverting the government’s banks’ funds to the stock market.
With this amount, he was able to control the market at his fingers and could make desirable gains for his company and clients.
Banks also gave some funds to traders’ accounts, so that they could use the trading opportunity and make gains for the banks. However, Harshad used that amount to manipulate the prices. However point to be noted is, this is not something Harshad was doing alone. Other brokers in the financial markets who had the power were also doing the same. RBI was aware of this, however, it didn’t do anything because of the structural problems in the markets back then.

Greed of Harshad Mehta

The growth Harshad Mehta was seeing in his career was infallible. He became so ambitious, that he didn’t even realize when he crossed the line. His aspirations grew, he became greedy and wanted to become the richest man in India. This greed made his ambitions do things that were irreversible and which would make his career fall for nothing. He took 500Rs crore money from one of the employees of SBI and didn’t issue requisite documents against it. He used that money, but unfortunately due to the closure of the stock market, at that time, he could not repay it. When this matter came under notice, an amount was missing from the books and Sucheta Dalal on investigations found about this and reported on it.
He took money from another bank to repay the amount of Rs 500 crores and then from the third bank to repay to the second bank. He kept doing this until CBI found about this and his career came to an end.


There are different views on this scam and this case could never be unwrapped properly. There were also political allegations made against then prime minister. Many experts still believe that Harshad just used loopholes in the system to his advantage. This is unethical but not illegal. Moreover, Harshad was not alone who was exploiting the loopholes. What are your thoughts on this?

Virtue of Mobile Computing

In this article, we will see how mobile phones, which are an integral part of everyday life have evolved over decades. How computing devices which once took a room space to operate, now can be operated in the hands.
So before we go into the concept of mobile computing, let’s see what is computing. In simple terms, if I have to say, computing is any algorithm, which takes some input, performs processing on that input, and gives the craved output.

Mobile Computing

Computers and Computing have a very wide application. Everyone uses computing whether it is for personal purposes or business purposes. All the businesses who want to scale, diversify or become efficient are becoming more and more automated by using computing technologies. We can see revolutionary change, in the way various business sectors work, which has happened in the last couple of years. For example In the industries like banking, financial, education, entertainment, and hospital. There are many more applications.
But in earlier times, computers that were used to do computing were quite big. They used to be fixed at some particular place and if anyone has to do some computational work then, a person would need to visit that place to work on a specific computer. But as the time passed, the size of computers decreased, decreased to such smaller size that computers with a good amount of processing capability were made portable and therefore this made possible that computing can be done from anywhere, anytime. So doing this computing from anywhere due to available portable devices is what mobile computing is. Basically, you can do computing while being mobile.

Laptop, Workspace, Desk, Workstation, Work Place

Benefits of Mobile Computing

In general, Mobile Computing is a dynamic technology that increases flow of information and its quality. More specifically, it leads to a range of benefits. Some benefits are provided below.

  • (1) Mobile computing has enabled users to work from anywhere as long as they are connected to a network. Employees have access to the organization’s database from remote locations. This has provided flexibility in working – for example, enabling home working, or working while traveling. Some companies like Facebook, Twitter, and Shopify have even allowed some of their employees to work from home permanently.
  • (2) Mobile computing has reduced the traveling time. Now employees don’t need to go their office place for every task they need to carry.
  • (3) Employees’ productivity has also been enhanced due to the fact that employees can now work in an environment in which they feel comfortable and productive.
  • (4) Management also has increased the flow of information. This improves management effectiveness, as information processing is key to any business success factor.
Woman, Brain, Laptop, Smartphone, Lady

Problems with Mobile Computing

But of course, nothing is perfect altogether. So yes there are some problems that are associated with mobile computing.

  • (1) Insufficient Bandwidth: Mobile internet is slower than using direct cables connections. However better using better networks like 4g or in the future, 5g can help to overcome this problem to a certain extent.
  • (2) Security: Mobile computing has weak security, since data travels through the spectrum in the air, there is the risk of data being hacked. This can be solved if there is the careful use of VPN i.e. Virtual Private Networks.
  • (3) Power: Mobile devices also have to rely on battery power. If the power source is not available, then the battery can only work for a limited amount of time.
  • (4) Health hazards: There are cases where people have been distracted while driving and using mobile phones. There are also serious allegations on mobile devices having harmful effects on health.


And lastly to summarize and conclude, mobile computer is nothing but one network that is not limited to the fixed location. Though it has some disadvantages, but as the technology is advancing, we are overcoming those problems and mobile computing is the future technology as it allows constant contact with the internet and data that needs sharing. The mobile world ensures that we are all connected at the touch of a button. The industry associated with mobile computing is worth more than a trillion dollars and being smartphones available at such low prices is beneficial as it ensures that nearly everyone has access to at least “basic computer” at all the times. What are your thoughts on this?

Vodafone Tax Case Study


In this article, we will discuss about the Vodafone tax case. This tax case was started more than 13 years back and even today this case has not been solved out. We will now find out what makes this case so complicated.

Tax Haven

So before we begin with the case, Let me give a small brief about what is a tax haven. So, A tax haven is generally an “offshore country” that offers foreign individuals and businesses little or no tax liability in a politically and economically static environment. This means Tax havens provide the advantage of little or no tax liability. Why do these countries do so? Tax Haven Countries benefit by way of attracting capital to their banks and financial institutions. Individuals or Businesses benefit by saving tax, which in tax haven countries may range from zero to low single digits. This is a win-win situation. There are many tax havens all over the world. A list of some of the most popular tax haven countries includes the British Virgin Islands, the Cayman Islands, the Cook Islands, The Isle of Man, and Mauritius.

The Deal

  • Four companies were involved in the transaction.
  • First is Hutchison Telecommunications International Limited (HTIL). It is situated in Hong Kong. It holds 100% shares in CGP Investments Holdings Ltd.
  • CGP Investments holdings ltd is situated in Cayman island, Mauritius, and holds 67% shares in HEL.
  • The third company is Hutch Essar Limited (HEL). It was situated in India and was formed by the merger of HTIL and Essar groups.
  • The fourth company is Vodafone International Holdings (VIH). It is situated in Netherland.
  • Before 2007, HTIL owned CGP investments completely and CGP investments had a major stake in HEL in India. This means HTIL was owning HEL indirectly through CGP Investments. Vodafone wanted to acquire HEL. Now if it straight away buys the shares of HEL, then that would attract huge Capital Gains tax in India under the Income Tax Act. To save tax, Vodafone opted to acquire CGP, which is holding company of HEL. So, after the deal, Vodafone became the owner of HEL but indirectly through CGP.
Tax Return Form and Notebooks on the Table

IT Department view

But this transaction came under the notice of our Income Tax department and they did not like it. Their contention was simple- CGP was created just to take benefits of tax exemption. According to them, this was the case of Tax Evasion. They were looking at Substance over form. Substance means reality and form mean what is there on paper. So according to them, the transaction was to transfer rights in HEL to Vodafone. This is because though Vodafone paid 11.9 Billion dollars in consideration for a stake in CGP. But CGP in itself was not doing any business. Therefore Vodafone was served a legal notice as it failed to deduct tax. IT Department issued Rs 11,200 crores plus interest Notice to the Vodafone.

Vodafone goes to Supreme Court

Vodafone however, did not relent. The company approached the Supreme Court where the discussion largely revolved around one subject— Was this a deliberate case of tax avoidance or was it simply prudent tax planning? After all, if Vodafone had designed the transaction in a deliberate ploy to avoid taxes, they could be held liable. But if they could prove they had simply executed the transaction without ill intention, maybe they’d get some reprieve. And after lengthy deliberations, the Supreme Court opined that the sale did not amount to tax avoidance. The judges ruled that Vodafone no longer had to pay taxes on this transaction and that should have been the end of this conversation. The government, however, brought retrospective amendments in 2012, which made Vodafone liable for taxes. Vodafone sued the Indian government at the International arbitration court at Hague and this case is still going on.


So, to conclude this is a very complex tax case and for years, this case has been evolving. Recently a bill was tabled in the parliament to revoke the retrospective effect of 2012 amendments. The International court ruled in the favor of the Vodafone and it is at the discretion of the government whether to comply with that or not. If India taxes Vodafone for that transaction, it will ruin India’s image in ease of doing business ranking. Let’s wait for how government ultimately reacts and what will be the fate of the Vodafone. What do you think? Should government drop the case and pay damages to the Vodafone or should it demand the taxes?