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World Needs new GDP Forecast Norms to Reduce Economic Uncertainty
- Published on 10 March 2017
The computation of gross domestic product (GDP) has come under fresh, intense scrutiny. Stakeholders across the world are pitching for improvement in its quality & reliability.
The four major factors propelling the urge for GDP reform are: 1) persisting uncertainty over global recovery, 2) new developments in globalization of manufacturing and services, 3) widespread perception & contention among economists against GDP numbers of countries such as India & China and 4) the limitations of existing methods of estimating GDP discovered over the years.
The stakeholders pitching for GDP reforms include multilateral institutions, national statistical organizations (NSOs) and leading economists.
Reliability of GDP, which is most important macro-economic indicator of national accounts systems, is vital for managing global uncertainty. It is also crucial for government of each country to take appropriate policy action such as changes in tariff on products or tax incentives to improve the economy’s working.
Countries largely claim to be measuring their respective GDP in keeping with in keeping with System of National Accounts 2008 (2008 SNA), a global standard released by United Nations Statistical Commission (UNSC).
Govt’s Limitation in Demonetization Analytics Should Rekindle Tax Reforms
- Published on 27 February 2017
(Excerpted Image from ITD's Black Money Advt.)
Demonetization has turned torchlight on the Finance Ministry’s handicap in minimizing black money generation and in catching tax evaders.
The handicap is glaring in Ministry’s ongoing process to hire three consultancy firms to analyze demonetization data for netting income tax evaders.
The private firms’ work would thus overlap Operation Clean Money (OCM) launched by Income Tax Department (ITD) on 31st January. OCM was rolled out a month subsequent to Prime Minister Narendra Modi promise that he would give a ‘clean country’ after December 30, 2016.
The ground realty is that dream of ‘clean country’ and ‘clean GDP’ is far as the moon. Daily reports of post-demonetization seizure of black money and fake new notes are a telling commentary on the Dream.
Ironically, ITD’s move to hire three consultancy services comes in the run-up to scheduled commissioning the first phase of its 3-phase computerization project named Insight in May 2017. The Project envisages strengthening and consolidating ITD’s data warehousing and business intelligence (DW&BI) infrastructure and skills.
In July 2016, ITD stated Insight “would play a key role in widening of tax-base and data mining to track tax evaders.”
Transform NGOs-linked Spoils System into Credible Public Welfare
- Published on 02 February 2017
(Edited Image courtesy: Financial Action Task Force)
The Supreme Court has put the Establishment on the mat for its laxity in accounting for thousands of crores of public money it doles out to Non-Government Organizations (NGOs) every year.
Now that the Apex Court is turning the heat on the Centre to audit grants, it is apt to pitch for probity into the larger domain of spoils system operated under the garb of societal change.
The domain comprises 1) governmental dole-outs including tax exemptions to NGOs; 2) corporate donations that go under high-sounding label of corporate social responsibility (CSR); 3) donations collected (at times extorted) from citizens by diverse entities as disaster relief and as aid to conferences, cultural and sports events. Superficial or non-auditing of these funds often facilitates defalcation.
This diffused form of corruption has flourished due to policy paralysis that is handed over seamlessly from one regime to another. Yes, right from first Government under leadership of Mr. J.L. Nehru to the present one led by Mr. Modi.
An instance of policy paralysis is the failure to enact a law as recommended by Law Commission in its report titled 'Regulation of Funds Collected for Calamity Relief' submitted in December 2004. More of this later.
The robust spoils systems nurtured by Neta-Babu combine has transformed India into fertile ground for NGOs, trusts, charities, civil societies, non-profit organizations (NPOs) and voluntary organizations (VOs).
Modiji, Please walk the talk on Corruption
- Published on 19 January 2017
(Image Courtesy: narendramodi.in)
'GIVE me time till December 30, I will give you a clean country: PM Modi'. 'Won't stop even if burnt alive: PM Modi on fight against corruption'. 'Demonetisation move to create corruption-free India, PM Narendra Modi says'. 'Narendra Modi signals step up in anticorruption agenda'.
Such steely resolve by our bhavuk (emotional) Prime Minister has made billions of Indian hearts turn bhavuk with his crusade against graft.
Modiji's quote, as reported by news agency, promised the dawn of new India: "This suffering is only for 50 days. Once there is cleanliness (swachhata), not even a mosquito can fly..... This is a 70years old disease and I have to remove it in 17 months. I will expose corruption going on since Independence; even if I have to employ one lakh youths for this, I will do it."
The daunting target of 17 months is more ambitious than 2-year target that was set by late Gulzarilal Nanda, Home Minister in Congress Government during November 1963. It is needless to say that corruption increased by leaps and bounds even after Mr. Nanda's initiatives.
Aam Aadmi (the common man, not the political party) expects more fireworks from our beloved PM while day-dreaming about Acche Din in cash queues. Many like this columnist are willing to join Modi Bhakts in fight against corruption, provided PM agrees to walk the talk on anti-corruption.
From Ist Prime Minister (Nehru) to the present one, the political will to take on corruption has been missing. And the best proof of this is non-implementation of recommendations of Santhanam Committee regarding formation of Lokpal and provision of protection to informants (whistleblower).