Here are a few nuggets from Economic Survey in order to prevent frauds

Invisible hand of market…
 

• The exponential rise in India’s GDP and GDP per capita after liberalisation coincides with wealth generation in the stock market
• Sectors that were liberalised grew significantly faster than those that remained closed
• Pro-business policies provide equal opportunities to new entrants, enable fair competition, and ease of doing business
• Efficiently scale up the banking sector to be proportionate to the size of the Indian economy 

…supported by ‘trust’ as a public good

• Citizens can enjoy its benefits at no explicit financial cost
• Non-rival consumption: The marginal cost of supplying this public good to an extra citizen is zero
• Trust grows with repeated use and therefore takes time to build
• Lack of trust represents an externality, where decision-makers are not responsible for some of the consequences of their actions

Ease of doing business improves, but...

• Continues to trail in parameters such as ease of starting a business (rank 136), registering property (rank 154), paying taxes (rank 115) and enforcing contracts (rank 163)
• Enforcing a contract in India takes, on an average, 1,445 days compared to just 216 days in New Zealand, and 496 days in China
• Logistics are inordinately inefficient at Indian sea ports. The process flow for imports, ironically, is more efficient than that for exports
• Turnaround time of ships in India has been on a continuous decline, almost halving from 4.67 days in 2010-11 to 2.48 days in 2018-19

To protect creditor’s collateral, leverage data

• Geo-tagging — the process of adding geographical identification such as latitude and longitude to photos, videos or other media — can help lenders keep track of the location of assets
• It can also help verify the value of pledged land or property
• Integrated data on collateral across all lenders in geography may be particularly useful in curbing double-pledging of collateral
• If mandated to share geo-tagged evidence of collateralised assets with their lenders periodically, borrowers would find it difficult for them to remove these assets by stealth

Bilateral netting of financial contracts

• Two counterparties in a financial contract can offset claims against each other to determine a single net payment obligation
• Under instances of default, close-out netting enables the non-defaulting counterparty to terminate the financial contract prematurely
• Current RBI guidelines require banks to measure credit exposure to a counterparty, based on gross marked-to-market (MTM) exposure instead of net MTM exposure. This increases credit risk for financial market participants
• Bilateral netting arrangements could have helped 31 major banks participating in India’s OTC derivatives market save about Rs 2,257.9 crore in regulatory capital during FY18

Develop offshore fund management industry
 

• Financial services exports have remained stagnant, averaging about $5 billion in recent years
• The share of financial services exports in overall services exports has almost halved from 4.2 per cent in FY12 to 2.3 per cent in FY19
• Generate employment for high-skilled finance professionals, including fund managers and support service providers such as custodians, fund specialists, risk managers, research analytics professionals, and tax advisors
• A conservative assumption of 1 per cent management fee (compared to 2 per cent globally) could yield about $2.2 billion in fund management fees in 2020