Best Bitcoin Exchange for India
Again disunity and confusion in India. As was announced earlier this week, the Indian Central Bank (RBI) is planning its own crypto currency. Meanwhile, the Indian police have issued a public statement warning against investing in crypto currencies.
In the world’s second most populous country, the police have now issued a clear warning in favour of investing in Bitcoin & Co. According to the police chief of Jammu and Kashmir, neither the government nor the central financial institutions support these forms of currency as legal tender.
The police believe that investing in crypto currencies can, in the worst case, cause individuals or institutions to lose money permanently. The public should remain vigilant so as not to become involved in fraudulent activities.
Eternal back and forth in regulation
In the South Asian state, reports such as these no longer seem surprising. In recent months, there have been repeated disputes about regulations and draft laws in the actually crypto-affine state. In one case, for example, a whole series of crypto exchanges filed a lawsuit against the government. They accuse the government of trying to stifle the scene in the country by repressing crypto currencies. The Indian government also seemed to want to dispel these accusations by pointing out the existence of a crypto task force.
And what about the international situation?
Meanwhile, the Indian police are not completely alone with their warning. German institutions such as the Consumer Association continue to regard an investment in Bitcoin & Co. as risky. In November 2018, it warned of high investment losses or dubious providers who lure with quick wealth.
The European Union was also critical in February 2018. However, it warned of the high risk involved in trading crypto currencies. Meanwhile, states like Thailand are resorting to bans to stop the run on the virtual gold Bitcoin. Countries such as Singapore, Switzerland and Malta show that there are other ways. Governments have a rather positive attitude towards trading in crypto currencies.
India is a managed economy that has been increasingly deregulated and privatized since 1991. Since then, economic growth has accelerated significantly. According to many observers, the performance of the Indian economy has now reached a top international level in some sectors (information technology, pharmaceuticals).
The growth of production in the Indian economy is hampered in particular by deficiencies in the often outdated infrastructure, above all by bottlenecks in energy supply, which lead to frequent power outages. Despite the liberalization of the economy that began in 1991, industry and the banking sector in particular continue to suffer from frequent state intervention and slow political decision-making processes. The protection of inefficient state-owned enterprises from competition remains an obstacle. Another negative factor is widespread corruption. Moreover, labour market regulations, which make it very difficult to lay off workers, for example, continue to affect the investment climate. Foreign investors are thus deterred. India is also losing a large number of qualified workers abroad (brain drain). On the other hand, it is the largest beneficiary of remittances from emigrants abroad in the world. In 2016 they amounted to US$ 62.7 billion and thus contributed almost 3% to economic output.
India’s integration into the world economy has intensified in recent years. The country is increasingly benefiting from the advantages of the international division of labour and globalisation. However, the Indian economy is still very strongly oriented towards the domestic economy. Its share of the global economy is still just under three percent, although imports and exports have grown strongly in recent years. The low shares of exports and imports in the gross domestic product still indicate considerable growth potential. In 2016, exports of goods and services accounted for just over 19.2 percent of gross domestic product, while imports accounted for 20.6 percent.
India’s medium- and long-term growth prospects are often viewed very favourably. Some studies expect India to grow even faster than China in the future. Apart from the great backlog demand, especially in the area of infrastructure, the age structure of the population in particular suggests that economic growth will remain strong. The current high proportion of young people in the population will ensure a high proportion of people of working age in the coming decades. The expected “ageing” of the population in Europe and China will occur much later in India. Growth will also be supported by the already large supply of qualified workers and the increasingly close integration into the global economy.
The high currency reserves and relatively low foreign debt should strengthen the confidence of foreign investors in the development of the Indian economy. So far, foreign direct investment in India has been low by international standards, especially with China. The government of Narendra Modis, which is regarded as economically liberal, is trying to attract foreign investment with reforms and initiatives such as the Make-in India campaign. In the World Bank’s Ease of Doing Business Index, India ranked 100th out of 190 countries in 2017. India thus improved by 30 places compared to the previous year and was among the top 100 countries for the first time.
The current high level of poverty, uneven income distribution and high unemployment hold potential for conflict. India had 104 billionaires in 2017, the fourth highest number of billionaires in the world behind the US, China and Germany, while over 20% of the population lived in extreme poverty and 96.2% of Indians had private wealth of less than US$10,000. To date, however, India has enjoyed remarkably high social stability.
In the Global Competitiveness Index, which measures a country’s competitiveness, India ranks 40th out of 137 countries (as of 2017-2018). In the Index for Economic Freedom, India ranked 143th out of 180 in 2017. According to Transparency International’s Corruption Perceptions Index, India ranked 79th out of 176 countries in 2016, along with Belarus, the People’s Republic of China, and Brazil, with 40 out of a maximum of 100 points.
Current macroeconomic development
From 2005 to 2015, India’s gross domestic product (GDP), adjusted for inflation, grew by around six to seven percent annually. According to preliminary figures, it rose by 7.4 percent in 2015. Despite the significant acceleration in growth in recent years, the official unemployment rate at that time was still nine percent – although a considerable number of unemployed people are to be expected who are not covered by the statistics. The total number of employees for 2017 is estimated at 521.9 million. A large part of them work in the informal sector. 24.5 % of the workforce is female, which means that women still have a relatively low level of labour market participation.
The development of public finances also remains unsatisfactory. The general government budget deficit is between nine and ten percent of gross domestic product, with a slight downward trend. About half of this is accounted for by the deficit of the central government.
However, India’s creditworthiness is increasingly being assessed better by the leading credit risk assessment agencies against the backdrop of favourable macroeconomic developments. According to the rating agency Moody’s, Fitch also raised its rating of the Indian state’s borrowing to the lowest investment grade at the beginning of August 2006.
In the wake of India’s increasing international economic integration, the country was also affected by the global economic crisis from 2008 onwards. The country’s steady annual economic growth collapsed. The reasons cited are the young, globally active Indian capital market, high private credit indebtedness, rising unemployment figures and falling domestic demand and export figures. Government stimulus packages were launched to combat the crisis, including infrastructure programmes, tax cuts and subsidies for the export industry.
India’s economy has regained momentum in recent years. Economic growth in 2015 was 7.9 %. The gross domestic product in 2016 in the same period was about 2,251 billion US dollars, the nominal GDP per capita about 1,723 US dollars. Inflation fell from about 10 % at times to about 5 % at present. According to experts, India will probably not only be the world’s most populous country by the middle of the century, but will also become the world’s third-largest economy (after the USA and China). Nevertheless, India still has to struggle with a high level of poverty among its population. About 30 % of the population currently live below the poverty line of 1 US dollar per capita per day.