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Created on Sunday, 24 May 2020 16:23
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(Image Courtesy: taxindiaonline.com)
Is India's first electric typewriter (ET) show-cased in any museum as a symbol in Self-reliance? Does the company that produced it exists as a public enterprise now?
The answer is No. And there hangs countless tales of self-reliance (SR) goals that failed or fizzled out for different reasons including shifts in political perception of SR.
Before latching on to Prime Minister Narendra Modi’s SR vision, we should understand why our quest for SR has been a mixed bag of failures and successes. SR has never been addressed as a complex challenge, requiring initiatives at all levels of economy, governance and society. It thus often gets reduced to a mere political slogan spun in a challenging situation or at best a burst of disjointed initiatives.
The sweet, sour and bitter lessons from the past right from British India’s days of Swadeshi should lay the foundation for PM’s “clarion call for Atmanirbhar Bharat”.
Mr. Modi has actually pitched for self-reliance ever periodically ever since he became PM. Recall his speech captioned “Self-reliance (aatma-nirbharta) in defence offsets essential for the security (aatma-raksha) of the nation” delivered on 4th July 2014.
Before discussing SR’s complexity & disconnect between slogan & actions, we need to recollect SR tales. They can serve as the building blocks for a wholesome aatma-nirbharta.
Revert first to ET tale. On 9th May 1975, Communications Minister Dr. Shanker Dayal Sharma, presented to Prime Minister Mrs. Indira Gandhi, India’s first ET. She described it as “a small but significant step in our progress towards self-reliance”.
Read more: Learn From Past To Make Atmanirbhar Bharat Abhiyan An Eternal Quest
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Created on Saturday, 10 August 2019 03:41
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The Government’s Johnny-come-lately plan to enter global sovereign debt market (SDM) has stirred a lively debate.
Is it an attempt to create new link to converge resource pools for managing fiscal deficit (FD) and current account deficit (CAD)? If not, then what is the big deal in appearing on a platform on which many developing countries such as Maldives and Benin have already made their mark?
Are there not better alternatives to reduce cost of servicing government debt, thereby making easy FD management? Is indirect, regular tapping of global debt market through Government enterprises such as EXIM Bank, State Bank of India, Power Finance Corporation not aiding management of twin deficits?
Is the Government geared to make full disclosures to foreign regulators for seeking approval of maiden overseas bond offer?
Before taking up such questions, recall what Finance Minister Nirmala Sitharaman stated in her maiden budget speech on 5th July. She said: “India’s sovereign external debt to GDP is among the lowest globally at less than 5%. The Government would start raising a part of its gross borrowing programme in external markets in external currencies. This will also have beneficial impact on demand situation for the government securities in domestic market”.
This sounds over-simplistic.It does not give correct picture of underlying challenges in managing macro-economy.
Read more: Hard Facts Don’t Justify Need For Overseas Sovereign Bonds
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Created on Sunday, 18 May 2014 19:45
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Jignesh Shah Image Courtesy: FTIL
The ‘selectively censored’ summary of the report of special audit of MCX has created ripples in the media. Several dailies have splashed stories about the questionable related party transactions between MCX and its parent company Financial Technologies (India) Limited (FTIL) disclosed in the Summary.
FTIL group founder Jignesh Shah, contested the findings of special audit conducted by PricewaterhouseCoopers (PwC) in interview with a pink daily published a few days before his arrest by the Mumbai police for his alleged involvement in the frauds relating FTIL subsidiary, National Spot Exchange Limited (NSEL).
FTIL has also issued a detailed rebuttal to the findings of summary of special audit. FTIL’s rebuttal has to be taken with a pinch of salt as the full report of special audit has not been put in public domain. The Forward Markets Commission (FMC), which commissioned the study, must put the full report in public domain to enlighten all stakeholders of the financial markets.
FTIL’s contention is that technology-centric transactions between FTIL and MCX were in the public domain. It says these were disclosed in the red herring prospectus of MCX in February 2012. What FTIL has not disclosed is that vital agreements were signed when MCX was 100% owned by FTIL. And these agreements and the consequent transactions were thus initially not in the public domain.
Nevertheless, the NSEL scam and related controversies about FTIL group could have been prevented had all the stakeholders cared to read the aborted draft red herring prospectus (DRHP) that MCX filed in February 2008. DRHP and the annual reports of FTIL and MCX gave a fairly good indication of the Mr. Shah’s dubious revenue model of creating a durable umbilical cord between FTIL and the exchanges-owning subsidiaries/associate companies.
These documents also gave inkling about the corporate strategy of FTIL group. The strategy included clever affiliation with the financial legends and the reining big names of the finance world. The documents also gave an idea of the trouble that was brewing for FTIL group.
Hardly any stakeholder including the media at that time cared to aggregate critical information about FTIL group available in the public domain and raise relevant issues. This columnist had, however, raised some of the issues that figure in PwC report in an unpublished article written in October 2010 for a magazine. The magazine that commissioned the write-up, never published it.
Read more: Regulators, auditors, investors & media all responsible for NSEL-MCX-FTIL scam
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Created on Tuesday, 07 May 2024 08:10
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Bharatiya Janata Party (BJP’s) fusillade against inheritance tax (IHT) has four underlying messages. First the obvious one: electoral rallies are the best platform to take the public for a ride with emotions-fueled rhetoric.
Second and most important message is: IHT has created a silver lining for direct tax code (DTC) to get traction in raging electoral campaign. This is because DTC & IHT/wealth tax are connected.
DTC is indeed a glittering instance of policy paralysis that six regimes failed to end since 1992. The Congress party, fighting on the back foot with back to the wall, has failed to capitalize on this issue. Lapsed DTC Bill, 2010 provided for taxation of wealth of rich and super-rich including their overseas assets.
The wealth can be taxed during the life of rich persons as wealth tax, a concept that got booster shot during the Covid pandemic. The second way to tax wealth is to impose estate duty on real estate after the demise of its rich owner. The third way to tax wealth is IHT that covers all net assets including equity shares & jewellery left by a deceased person.
The Gift tax serves as a tool to prevent evasion of both IHT and Wealth tax, apart from being anti-money laundering mechanism. All these taxes help capture income which often gets avoided or evaded.
The third message is that 2024 elections have downgraded the national exchequer, the ultimate Kamdhenu, as a muddy football for politics. Exchequer should instead be worshipped as Lakshmi and its revenue streams discussed responsibly at public platforms.
All leaders should introspect over the long-term adverse impact of casual approach towards tax & non-tax revenue. It is the key to our collective survival & growth. Doubting Thomases can read the World Bank’s report captioned ‘Sri Lanka Development Update -Mobilizing Tax Revenue for a Brighter Future’ October 2023.
Read more: Inheritance Tax row - A golden opportunity to end 32-years long Policy Paralysis on DTC
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