Wednesday, 5 July 2017

GST: Making Indian Economy A Bahubali  

The mere word ‘Tax’ puts me off. Throughout my graduation and PG, I just scraped through taxation and was propped up by economics & banking which gave some meaning to my otherwise aimless yonder. I dislike anything knotty or convoluted and thus taxation was out of my orbit of understanding. This being a mild prequel of my educational background, you would understand my horror when one fine day my daughter wanted to know everything about tax. “You are too young for all this, you don’t even have to pay taxes yet”. “My teacher asked me the full form of GST & I don’t know, Just Imagine”. This was some three months back.

After demonetization our political pundits would not have believed that GST would be rolled out on the dotted date and that too hassle free. Sensex and the Nifty saluted by soaring 1% on Monday, the very next business day, 3rd July. GST and its successful rollout has even shifted the focus from our soaring banking woes, NPA mess and loan waiver spree among state governments. Why? Are these issues less important or have they lost their meaning and have been accepted as a congenital disorder having no remedy. Moving on with GST, which is no more a burning issue but has become a reality of our daily economic lives. Adopted on 1st July 2017, Goods and Service Tax has unified India into an economic behemoth ready to move with stupendous alacrity in global trade & economic warfare. Foreign analysts have been gaping with amazement of how seamlessly 29 states and 7 union territories have adopted GST without any scandalous disruption. 

So going back to my daughter’s inquisitive enquiry, I was forced to unravel the mysterious multilayered single tax regime now effectively functional in our economy. The basis logic of GST is that the tax under this regime will be collected at every stage of value addition and the credit of tax paid at the previous stage will be available to set off tax to be paid at the next stage of transaction. Thus GST has subsumed the obnoxious 17 central and state taxes and 23 cesses leading to higher efficiency, lower retail prices and greater ease of doing business. The GST tax rates 5%, 12%, 18%, & 28% have been categorized by the GST council, the all powerful decision making body which has demonstrated in itself the potency of Indian federalism in its true spirit. 

Removal of inter-state economic barriers, expanding tax base, easy and transparent compliance are some of the apparent rewards of GST, the larger impact will be felt through the benefits of input credit, unwinding of corrupt bureaucratic machinery, accounting shadow economy and hitting black money hoarders which will tighten the nuts and bolts of the Indian economy making it more agile in the long run. Implementation of GST & digitalization has de-cluttered the Indian taxation system paying way for higher investment and growth. So what next, Let’s just enjoy the ride with automakers & real estate reducing their prices and FMCG companies ready to pass on the benefits to the end consumer. Don’t forget we belong to the fastest moving economy in the world, 1-2% rise here and there should not matter. Yes, Indian economy is BAHUBALI in the making.


Monday, 26 June 2017

Tuesday, 20 June 2017

HEY MR. BARNIER, WE ARE ALL THATCHERITES

Though I was a great fan of her’s since childhood, I never got a chance to write anything about one of the most charismatic leader of her times, Margret Thatcher. And so, I should be thankful to the current UK Prime Minister for urging me to go back to the golden years of Thatcherism. From a grocer’s daughter she became the first woman prime minister of United Kingdom. Had she been there at this very moment negotiating with EU Brexit Secretary, Michel Barnier, she would have said just three words, “ NO, NO, NO” which the EC had heard loud and clear in 1990.  Anyways, there would have been no BREXIT, WHY? Because she would never have promised a referendum to win an election. No referendum, no snap elections and no BREXIT. She would have simply said, “We are out, You Take Care of Yourselves”. And the people of Britain would not have been so uncertain about their future under her command especially the 18-35 year olds who voted for Labour.

Democracy is defined as, “Of the People, By the People and For the People”. This being one of the famous statements by Abraham Lincoln summarizes the inherent uncertainty in every national economy today. Though the power vested in the respective national governments is of the people and by the people but, Is it for the people, which is the major dilemma in every global citizen’s mind who struggles on everyday basis against racisim, gender inequality, religious intolerance or economic consequences of rising automation. But where has this “For The People” gone, was it ever there. Was it only followed by Gandhi, Karl Marx, Lincoln and thus forgotten like an unwanted ancestral article left in the attic and used only in celebratory speeches on national events.

Global economy has always been influenced or shaped by individual economic policies followed by powerful nations in the name of world economic stability inherently suiting their own economic agendas. Whether it was Bretton woods or Petrodollar system, World Bank, IMF or the EU formulated to amend the world pecking order have resulted in mass economic turbulence worldwide resulting in financial crisis plaguing the entire western world even today.


So, right now what should the Tories do, keep staring at the half empty glass or the lost 8 seats. For God’s sake its ALMOST A MAJORITY. While Mr DD (UK Brexit secretary) negotiates a soft landing for his country, his Premier can Google in her precious spare time of how the Indian Government managed its economic crisis in 1991 in spite of being in minority for five full fledged years. If that seems to be more time consuming, there is another option of just envisioning of what Baroness Thatcher would have done. Had she been alive, she would have taken this European bull by the horns to reignite the whole conservative party, not apologize publically and instead would have said, “You turn if you want to. The lady's not for turning”.