The Indian government has promised to make an India a $5 trillion economy in the next five years, but the current economic situation of the country suggests something else. Government’s vision to develop India as a digitally empowered country in the field of technology was met with a contradictory ruling from the Central bank when it decided to ban all the cryptocurrencies. While other countries, especially in Asia, are turning to cryptocurrencies for economic development, India has taken a backward step.
Five Trillion dollar economy a fantasy?
According to economic times report country’s economy will slow down quite rapidly in the coming days. Large companies Hindustan Unilever, ITC, and Godrej only saw single-digit growth in the last quarter. There are all signs out there that suggest India’s economy could fall down further. Reserve bank of India has been cutting down the repo rate continuously to ease the market. Ram Venkataramani, president of the Automotive Component Manufacturers Association of India (ACMA), has warned that if the trend continues auto sector could see a million job cuts. 2,294 out of 2,664 stocks that are listed in BSE are in red.
This would be a stretch to say that cryptocurrencies could have saved India’s economy from slowing down. But the potential use and adoption of digital currency could have definitely eased down the effect in the long run.
According to experts, the ban on cryptocurrencies is a bad idea in many ways, this would drive the crypto transactions underground, as the government does not have control over the transactions and they cant be traced easily. Making a fair regulatory framework would have been a better approach instead of banning them altogether reckons Sathvik Vishwanath, CEO, and co-founder of Unocoin. The Indian government also blamed illegal activities that cryptocurrencies assist worldwide for the ban.
A solution to the dollar-based economy?
Currently, the dollar is treated as a global reserve, and it is essential for international trade. Cryptocurrencies provide a solution to break this barrier and make international trade dollar free. Many countries are already experimenting with this payment system to avoid the dollar. If India does not lift the ban cryptocurrencies, it might not be able to participate in such trades. It seems unlikely that the Indian government would lift the ban on cryptocurrencies soon.
