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With GDP Politics Turning Murkier; Save Statistics from Politicians
- Published on 30 August 2018
UPA’s Tainted GDP vs NDA’s Clean GDP
(Image Courtesy: taxindiaonline.com)
Gross domestic product (GDP) is no longer expressed in black and white. GDP is now painted in different shades. It can be tainted too in Indian political narrative. And this was amply demonstrated last week by Modi Government.
It fired all cylinders to ridicule a news agency story dug from an official report that was lying unnoticed in public domain since 25th July 2018. The story quoted data from the report of Committee on Real Sector Statistics (CRSS) to show that GDP grew faster under UPA than under NDA.
The story also referred to UPA recording double digit growth in two years. This emerged after CRSS linked old GDP data series with new data series.
CRSS was one of the five committees constituted by National Statistical Commission (NSC) for statistical improvements. The fifth panel is yet to submit its report.
Apart from phoo-phooing the story, the Government also downgraded the official report from final one to the draft one. It did the same for three other NSC reports too. As an after-thought, the Government inserted an identical page in all reports, seeking public comments on the reports.
All the four reports were shifted from prominent display on home page of website of Ministry of Statistics and Programme Implementation (mospi.gov.in) to a spot that most visitors would miss (http://www.mospi.gov.in/nsc_draft_reports). This is ultimate proof of Government’s half-hearted commitment towards transparency.
Where Are The Jobs?
- Published on 13 August 2018
(Edited Image Courtesy: Uttrakhand's Directorate of Training & Employment)
“Let us assume the reservation is given. But there are no jobs. Because in banks, the jobs have shrunk because of IT. The government recruitment is frozen”.
Union Minister of Road Transport Nitin Gadkari recently admitted this bitter truth while commenting on Marathas’ agitation for jobs reservation.
Mr. Gadkari has thus touched soul of crores of unemployed & under-employed persons across India. His statement would also strike the right cords with countless people who work below Government-notified minimum wages.
The picture one thus gets is of “angst” to borrow a word from Rajasthan Chief Minister,Vasundhara Raje.
The other day she told a TV news channel: “Lynchings are a result of inability to find jobs”. She observed angst is spreading everywhere, and people are reacting angrily to their circumstances.
Apart from big guns within BJP empathizing with the jobless youth, others within and outside the Government are also chipping in their concern.
Last month, Swami Ramdev stated: “Unemployment is a big question in the country and the Centre and the state governments are not able to do much as they were supposed to solve this issue”.
Swami Ramdev, who last year conferred Prime Minister Narendra Modi with title of RashtraRishi, has obviously failed to convince the latter.
No wonder Mr. Modi went hammer and tongs against those who see joblessness. Replying to no-confidence motion in Lok Sabha against his Government on 20th July 2018, PM reeled off dubious statistics & guesstimates to claim that one crore jobs have been created in one year.
Regulation of Virtual Currencies Would Be A Cat-&-Mouse Game
- Published on 02 August 2018
(Edited Image. Courtesy: Deloitte)
Legitimatization of Virtual /crypto-currencies (VCCs) is set to gather pace with G20 lauding their benefits while seeking regulations to prevent their misuse.
Tax authorities in developed countries and emerging economies including India have legitimized VCCs by taxing VCC-based transactions. They look for new opportunities to widen the tax net on VCCs. There anonymous ownership makes them easy option for tax evasion.
As put US Internal Revenue Service (IRS) in a reminder dated 23March2018 to taxpayers, “Virtual currency (VC), as generally defined, is a “digital representation of value that functions in the same manner as a country’s traditional currency. There are currently more than 1,500 known virtual currencies. Because transactions in virtual currencies can be difficult to trace and have an inherently pseudo-anonymous aspect, some taxpayers may be tempted to hide taxable income from the IRS”.
International Monetary Fund (IMF) has also pointed out that VCs have a high potential as a means for tax evasion. It notes: “This is particularly the case with cryptocurrencies, where participants need not disclose their identity, and transactions are peer-to-peer and can take place across borders. Given that tax evasion is already illegal in most jurisdictions, the key problems in this area relate to developing effective means of enforcement”.
Monetary authorities, on the other hand, have not formally recognized VCCs as legal means for commercial transactions in most countries. Many have, however, allowed them to mushroom and flourish. A few jurisdictions such as the ones in Indonesia, Iran and India have frowned upon them.
Central Banks know decentralized VCCs might pose a challenge to sovereign currencies in the long run. Some of them are thus themselves considering launching their own digital currencies.
The tone for guarded promotion of VCCs has been set by G20 Meeting of Finance Ministers and Central Bank Governors (FMs-CBGs), who met in Buenos Aires for two-day conference ending 22th July 2018.
Railways Caught in Vortex of Troubles
- Published on 23 July 2018
(Image courtesy: narendramodi.in)
The Railways’ cup of financial woes is brimming. It does not expect turnaround in the situation over a couple of years. The merger of Rail budget into Union Budget has not facilitated any operational improvement in its working.
Missed revenue targets, expenditure overshoots and revenue leakages, including digital payment of salaries to ghost employees, have put the Railways Ministry on the edge.
It is also rattled by pension backlogs & excess payments, accounting discrepancies, digital slippages and GST accounting errors. The list of challenges is long and daunting.
Today, even the Railway Board (RB) does not have full grasp over the magnitude and diversity of the problems. Such irritants flow & grow seamlessly through Railways’ gargantuan network. In the current financial year, RB has thus embarked on a journey to discover true picture of State of Railways.
To facilitate “truthful reporting of asset failures & train punctuality” by 17 zonal railways (ZRs), RB is treating current financial year as “Zero Year”. It means RB would make no comparison of any ZR’s performance in 2018-19 with past record of failure indicators such as diesel loco failure, wagon detachment and signal failure. Such failures & safety indicators are specified in the annual memorandum of understanding between RB and ZRs.
As put by RB in an internal communication, “this move should encourage zonal railways to report truthfully and not worry about adverse comparisons with last year’s figures. It may be appreciated that until and unless an honest and realistic picture of the present state of affairs prevailing on the system is generated, any kind of improvement will not be possible”.