RBI Issues Circular On Levying Unfair Interest Charges On Customers

Financial literacy in India is yet to become an important aspect of the lives of citizens. The concepts of investment, savings, loans and retirement plans are alien to majority of Indians. In a recent survey conducted by Money9, it emerged that most respondents lack sustainable investment habits.

Nilesh Shah, Member, Economic Advisory Council to the Prime Minister, in an interview with Money9 during the launch of the Money9 Budget Conclave, highlighted the importance of financial planning and also expressed his views on the upcoming Budget.

Edited excerpts: 

Q: What would you like to say about Money9’s initiative to spread financial literacy in India?

Nilesh: Clearly, we’re living in an era where there is lot of noise and little news. People keep getting misguided with false news but only true knowledge can empower people. In India, financial literacy, despite all the attempts by regulators and players has not seen great success. We did a study which showed Indians have lost more than 1 lakh crore in collective investment schemes, chit funds, etc. A platform like Money9 can definitely reach out to a lot of people and spread credible information regarding financial literacy in the country.

Q: Recently you wrote an article about your personal financial journey wherein you spoke about meeting a marketing practitioner who taught you several money lessons. Can you share a few of those for our readers?

Nilesh: I was blessed to meet kaka, a man with immense common sense, in very early days of my career. He was a market practitioner who used to say, “We workship goddess Lakshmi on Diwali in the Dalal Street. But we should worship goddess Saraswati every day.” He stressed on the importance of knowledge and research before buying a stock and cautioned to never become too greedy. One of his favourite lines was, “To make money, all you need is common sense. But common sense is not available easily”.

Back then, I was studying chartered accountancy and kaka used to say that one’s investment career is independent of their professional degree. His wisdom had a deep impact on my life and I’m glad to have met him.

Q: What did you make of the Economic Survey?

Nilesh: Our economy has definitely picked up some speed. There are issues but things are recovering for sure. GST collection was on an all-time high last month; power consumption is on a high this month, active cases due to Covid-19 have significantly declined. All these things hint at the recovery rate of our economy.

Real estate and construction have been sloppy for the past few years. At one point, these sectors contributed 15% of the GDP while today it has come down to 6%. Stars are aligned for the revival real estate today. Housing loan is available at 7% interest rate and common man’s income has also increased over the last few years. Many such factors put together seem to create a favourable atmosphere for real estate. Its revival will boost the economy furthermore.

Q: Talking about the upcoming budget, the central government has said ‘there will never be a budget like this’. What is your advice to the FM for Union Budget 2021?

Nilesh: Finance Minister is presenting the budget in an era not seen in last hundred years. There is a medical crisis; there is an economic situation, which is now improving rapidly. There’s huge expectation from this Budget. I’ll recommend finance minister to do three things. Firstly, raise resources without raising taxes. Second, spend money to stimulate those sectors of the economic retail impacted by COVID-19 and third maintain part of fiscal prudence in reassuring investors about India’s commitment to fiscal prudence and macro ballots. This is sounding a little bit conflicting and impossible for now.

But if we think innovatively and raise the sources, we will be able to spend and maintain part of fiscal prudence. So let’s focus on how to raise the resources we make. You know, Indians are sitting on 25,000 tonnes of gold, which is valued at more than $2 trillion. The bulk of this savings is frozen individually. If you can come out with a disclosure scheme, which brings the majority gold into white economic, this will bring taxes to the government and give money in the hands of potential businessmen.