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Couple Reforms with Penalties to Checkmate Benami
- Published on 17 January 2017
Facts contradict PM’s claim on Benami Transactions law
(Image courtesy: nationalmuseaumindia.gov.in)
Prime Minister Narendra Modi has distorted the country’s multi-law battle against benami deals in his zeal to take jibes at the Opposition particularly the Congress and Left parties.
Benami Transaction Prohibition Act (BTPA),1988 has been enforced and repeatedly taken cognisance of by the judiciary except for the unimplemented provision that enables authorities to seize benami immovable property.
Moreover, the anti-benami/anti-fictitious provisions have been incorporated into corporate, banking and other enactments & regulations over the decades.
Modiji’s digitally-supercharged advisors should have searched Supreme Court (SC) website to access judgements that have factored in BTPA. Such an approach might have restrained PM from using BTPA gun to take pot shots at his political rivals.
Before putting the entire domain of benami (literal meaning without name) in perspective, consider what Mr. Modi has stated on BTPA post-demonetization. In his ‘Mann Ki Baat’on 25th December 2016, he stated: “You are possibly aware of a Law about Benami Property in our country which came into being in 1988, but neither were its rules ever framed, nor was it notified. It just lay dormant gathering dust. We have retrieved it and turned it into an incisive law against benami property”.
Speaking at BJP Parliamentary meeting on 16th December 2016, PM referred to BTPA and quipped: “For some reason or the other no regulations were issued under the act. In other words, it remained unimplemented for more than twenty five years.”
A plain reading of BTPA would show that our beloved PM is twisting facts.
Demonetization Hacks Direct-Indirect Taxes Synergy
- Published on 14 January 2017
Botched Demonetization of high denomination notes in India & Venezuela should spur development of a zero-disruptive global strategy to tackle tax-evaded income and bribe money.
The strategy should be such that it complements growth of both direct and indirect taxes. It should discard blind zeal for increase in direct taxes that adversely affects collection of indirect taxes as has happened in India. Demonetization should not let monetary policy overshadow the growth-stimulating fiscal policy.
Even in normal circumstances, the tax policy experts should always strive for an optimal mix of direct and indirect taxes that contributes maximum to economic growth & overall revenue buoyancy. Compartmentalized focus on direct taxes as is evident under demonetization is shortsightedness.
It is here pertinent to quote the findings of a research paper captioned ‘The growth trade-off between direct and indirect taxes in South Africa: Evidence from a STR (smooth transition regression) model’ authored by Economist Andrew Phiri in February 2016.
The Paper says: “Direct and indirect taxes are only significantly related with economic growth when the indirect tax-growth ratio is below a threshold of 10.24 percent. Below this threshold, we observe that indirect taxes are positively related with economic growth whilst direct taxes adversely affect growth. Moreover, it is within this lower regime that we find resources collected by government can be efficiently used and that the labour growth variable has a positive effect on economic growth.”
The Paper continues: “By policy implication this presents a case for fiscal authorities to exploit the nonlinear tax-growth relationship to their advantage by specifically exploiting the positive relationship found between indirect taxes and economic growth below the established threshold. This, in turn, would entail a gradual shift of reliance in collecting government revenue from direct taxes to indirect taxes”.
Farm Policy Shifts Through Budget Pronouncements
- Published on 07 January 2017
The Finance Minister’s annual budget speech has emerged as the prism through which one can discern the policy drift or direction of the government of the day. As the speech is also an ideal platform for political posturing, the discerning eye has to segregate wheat from the chaff of budgetary announcements.
Do budget speeches, right from the Independence, reflect any strategy for agricultural development? Do they constitute changing and random initiatives announced with an eye to vote bank? Does the political rhetoric about farmers get transmitted to the ground as inclusive, robust growth of entire farming community? Do the specific measures to mitigate agrarian crisis have the desired impact in the long run? How often is the old wine passed off as new wine to humble farmers?
The answer to such questions would help the farming community take budget speeches in the right perspective. It would be worthwhile to analyze the agricultural content of budget speeches right from the first one, for 1947-48, to the latest one for 2016-17.
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Imagine Cashless India transforming as Queueless India
- Published on 30 December 2016
(A Voters' queue - Image Courtesy: PIB)
“Dreams are not seen when you sleep, dreams are those that don’t let you sleep.” This quote from Mr. Narendra Modi, when he served as Chief Minister of Gujarat, is an inspiration for ‘Mind Manufacturing’ focused entity named Gujarat Vittal Innovation City.
I visited this SEZ’s website, which was perhaps last updated in 2010, because demonetization has put me in sleep-struggle mode. I have been facing huge problem in sleeping normally. Regular intake of a nerves-soothing medicine has proved ineffective. And this problem surfaced only after I started dreaming about queueless India as logical extension of Cashless India.
I am just not able to shake off from my mind Prime Minister’s vision to transform India into a queueless wonder. This vision has helped me quash fear over prospects of India dislodging China as the world’s most populous country by 2022.
Before depicting queueless India in different spheres of life, let me quote what our beloved PM stated and which no country’s CEO has perhaps ever dared to dream.
Ridiculing demonetization critics on 3rd December, Mr. Modi reportedly stated: “We had to stand in queue to buy sugar. We had to stand in queue to buy kerosene. We had to stand in queue to buy wheat. Thanks to those who ruled for 60 years, this country was wasting away in queues.”
In obvious reference to queues outside the banks & ATMs since the announcement of demonetization, Mr. Modi said: “What I have done is to start a queue to end all queues.”
I am unsure whether Finance Minister Arun Jaitley would deride me for not understanding that queueless means less queues. Don’t forget he recently chided the Opposition for its inability to understand cashless as less cash.