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Created on Sunday, 04 December 2022 19:42
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(Image courtesy: taxindiaonline.com)
There is no reason why a national consensus cannot be reached on core issues that endanger the survival of the nation.
There is no justification for the ruling party's inability to overcome political inertia on core issues after twice getting overwhelming people's mandate.
Three freshly raked-up cases in point are the uniform civil code (UCC), population control and political compulsions-fuelled freebies. The cobweb of freebies persists due to complex interplay of several factors.
These include: 1) lack of holistic understanding and approach by the powers that be, 2) alarming rise in populism across the political spectrum, 3) Centre-States competition to woo vote banks, especially farmers and women through freebies, 4) the Centre's reluctance to grapple with core challenges such as linking and limiting dole-out of freebies with size of family, 5) fiscal opacity at all levels of governance leading to ballooning of public/govt debt and 6) explosive mix of population growth, poverty, illegal immigration and liberal issue of Aadhar card to any person who resides in India for 182 days, 7) the citizens' addiction to freebies that result in outcry for more. Call it an aspirational revolution if you wish.
The Supreme Court has been hearing for the 2nd time in a decade several petitions against freebies over the last several months. In its order issued on 26th August 2022, Supreme Court observed: "Freebies may create a situation wherein the State Government cannot provide basic amenities due to lack of funds and the State is pushed towards imminent bankruptcy. In the same breath, we should remember that such freebies are extended utilizing tax payers money only for increasing the popularity of the party and electoral prospects".
The observation about bankruptcy risk is corroborated by Punjab's White Paper on State Finances published in June 2022. As put by WP, "Today, Punjab is in an economic morass and debt trap."
Read more: Decode Freebies Maze to Free Growth Genie
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Created on Friday, 05 July 2019 03:34
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(Growth Image Courtesy: taxindiaonline.com)
“For the last 18 months there had been paralysis on the economic front. The last two governments postponed taking vital decisions. The fiscal position was allowed to deteriorate”, stated Prime Minister P.V. Narasimha Rao on 9th July 1991 in a broadcast to the Nation explaining rationale for reforms.
If late Mr. Rao served as PM today, he might have made a similar about observation about policy paralysis (PP) in the arena of independently verifiable urban reforms (UR). PP led to cancellation of two world Bank-aided, UR projects - one in 2006 under UPA and another in 2019 under Modi-led NDA Govt.
These & similar other cancelled projects have ensured that urban rot persists. The rot explode periodically as it is now: Over two dozen deaths due to recent wall collapses in Maharashtra and Odisha, average 10 pot-hole deaths/day across India, avoidable fire tragedies, water crisis as in Chennai and other cities and unstoppable growth in slums. Monsoon mirrors state of Governance in India.
All problems are due to multiple flaws in urban governance for which Centre, States & cities need to share the blame. On paper, the Union Government is executing wonderful urban reforms.
Cancellation of two successive UR-linked, cities development projects is not an isolated case of India dropping project proposals. Such developments happen every year after long negotiations with multilateral financial institutions (MFIs) such as World Bank (WB), Asian Development Bank (ADB), etc.
Read more: Catalyze Growth by Optimizing use of Multilateral Loans
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Created on Friday, 24 November 2017 14:22
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Moody’s upgrade of India’s sovereign ratings is serving as a super-booster dose for National Democratic Alliance (NDA).
Moody’s Investors Service (MIS) upgrade release has prompted Finance Minister Arun Jaitley to ridicule and admonish critics of Modi Government’s economic governance. He stated: “Many who had doubts in their minds about India's (economic) reform process would need to now seriously introspect on their thinking”.
Modi Government and BJP also ought to introspect over this juvenile flaunt of dubious certificate. They should know there are also other such certificates that might freeze them in their zero-gravity track, if not leave them red-faced.
A case in point is civil unrest that can drag economic growth and put off potential investors. The UK-based global risks observer, Verisk Maplecroft, ranked India 4th after Syria, Yemen and Libya on its civil unrest index released during August 2016.
According to Maplecroft, “it is striking that Brazil, France, India, Mexico and South Africa, which have all witnessed substantial disorder in the last year, lack adequate structures to avoid grievances escalating into wholesale protests”.
Recall how angrily the Government had officially dismissed a report from Moody Analytics (MA) during November 2015 that cautioned the Government against hurting minorities in India. MA and MIS are two arms of Moody’s Corporation.
Read more: Introspect over Irrational Exuberance over Moody’s Mood Swing
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Created on Monday, 19 September 2016 14:38
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(Edited Image Courtesy: ICMAI)
“Cost accountants are engaged in a much more difficult and complicated kind of task, a task in which the country is much more interested. In the other case, it is a question of shareholders not being defrauded or the owner of a concern knowing that his accounts are correct or the Government getting the income-tax properly; otherwise, the amount may be incorrect. But in this case, the matter concerns the whole country. It affects our whole economic development. An industry should have the lowest cost of production so that its products may be able to compete in the world markets and in our own markets also. So, this subject of cost and works accounting is very important. It is a very advanced and specialised branch and it should be treated separately. There is no doubt about it. I am also glad that the Government has now taken the trouble of organising it into a Separate body and setting up a new Institute of Cost and Works Accountants.”
That was Parliamentarian Dr. P.J Thomas sharing his vision for cost audit as omnipotent facilitator for economic development while participating in a debate on the Cost and Works Accountants Bill, 1958 in Rajya Sabha on 10th December 1958.
Another MP, R.P. Sinha struck a similar chord. He stated: “it is not enough to have cost accounting on the whole, but, Sir, it is important that we should have cost accounting, as explained by the previous speaker, for every stage of production. Then alone we can have a correct appraisal both of the productivity of labour and of management.”
This perspective, which didn’t get requisite attention in the past, is more relevant today. Cost efficiency is vital for success of Modi Government’s ‘Make in India’ initiative. It has been launched to reverse the alarming decline in share of manufacturing in gross domestic product over the last 20 years.
Post economic reforms beginning mid-1991, many companies stopped production or went of business as they realized that they were not cost competitive against imports. Low-cost imports of components, sub-assemblies and finished products became the liberalization-age mantra.
Read more: Set up National Council for Cost Competitiveness to Harness Benefits of Cost Audit
