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Gauge Twin Shocks of Demonetization & GST Through Corporate Eye
- Published on 03 May 2019
(Image Courtesy: BJP)
Modi Government “has been able to take many decisions which are historic and has ushered in a comprehensive and fundamental transformation”. Such decisions include Demonetisation and GST, according to BJP Manifesto for Lok Sabha polls.
Prime Minister Narendra Modi himself continues to defend twin disruptive decisions. He rubbishes reports of their negative impact in his speeches & interviews.
The Opposition, on the other hand continues to bemoan the problems resulting from these decisions. The Opposition stance is aptly reflected in a recent headline: “Rahul Gandhi says NYAY (minimum income guarantee scheme for poor) will revive the economy hit by demonetisation, GST”.
Amidst these contrasting positions, how do citizens capture apolitical picture of impact of twin decisions on economy? Leave aside independent studies, reports of multilateral institutions & credit rating agencies and authoritative opinion of experts?
The answer lies in researching and analyzing what companies think about it quietly. The companies share their perceptions about economic outlook forthrightly before the international investors. They do so miserly before domestic investors, taking advantage of weak disclosure requirements in India.
A glance through corporate disclosures to foreign investors in 2019 show that companies are indeed worried about the negative impact of both demonetization and goods and service tax (GST).
They have also voiced concern over uncertainty about likely impact of income tax-related General Anti-Avoidance Rules (GAAR), retrospective taxation and other taxation risks.
Balance Mr. Modi's Phobia of Coalition Governments with Facts
- Published on 23 April 2019
(Narendra Modi. Image Courtesy: PIB)
“Even in coalition governments if proper leadership is there and we can achieve good governance and take strong steps against forces that work for destabilizing the nation. Accountability as we all agree is one of the key components of good governance” stated Narendra Modi while delivering a speech on good governance on 5th June 2010.
Mr. Modi’s wisdom was independently articulated by Commission on Centre-State Relations (CCSR). When Mr. Modi was Gujarat Chief Minister he often hailed 7-volumes report of CCSR and pitched for its implementation.
Mr Modi, however, sustained UPA’s policy paralysis on CCSR recommendations submitted in April 2010. This is a separate story in itself.
CCSR, often referred to as Punchhi Commission, concluded: “Coalition government can be looked at as a sign of genuine accountability of the uniquely Indian polity and its system of governance”.
CCSR observed: “Coalition politics need not be inherently problematic as long as the parties follow the rules of the game and respect the authority of the law and the Constitution. It may slow-down the pace of development occasionally; but the practice of evolving the ‘Dharma’ of common minimum programme did help to overcome difficulties while controlling the excesses of the dominant coalition partners”.
We need to recall such observations of reputed panels & BJP’s own forgotten statements, etc. This might help voters balance Modiji’s sudden phobia of coalition politics. The phobia should also be countered by mulling over failures of regimes led by parties that won absolute majority.
Multilateral Institutions Target Corruption in Fiscal Space
- Published on 20 April 2019
(Corruption. Edited Image Courtesy: India's CVC)
When International Monetary Fund (IMF) splashes ‘Curbing Corruption’ on the cover page of its Fiscal Monitor (FM), analysts are bound to revisit bribery in the fiscal domain.
Breaking Fiscal-Corruption nexus has lately become top priority for other international/multilateral institutions too. These include Asian Development Bank (ADB), World Bank and Organisation for Economic Co-operation and Development (OECD).
They perceive corruption prevention as the surefire way to accelerate global growth & generating more funds for public welfare.
“The fiscal costs of corruption can be substantial for economies at all levels of development. For example, comparing countries at similar income levels, the least corrupt governments collect 4 percent of GDP more in tax revenues than their peers with the highest levels of corruption”, says FM.
It continues: “Based on such cross-country comparisons, if all countries today were to reduce corruption by a similar extent, on average, as those that reduced it over the past two decades, global tax revenues could be higher by $1 trillion, or 1¼ percent of global GDP; the gains would likely be greater considering that lower corruption would increase economic growth, further boosting revenues”.
BJP-Cong War on Poverty Shows No Lessons Learnt From 1971 One
- Published on 06 April 2019
(Extracted Image Courtesy: BJP)
The war to win the poor as a class vote is becoming fiercer with Congress Party resolving to eliminate “abject poverty” by 2030. The war between the Congress & Bharatiya Janata Party (BJP) is reminiscent of the slogans war they fought in 1971.
The Congress won the 1971 Lok Sabha elections with its Garibi Hatao slogan, BJP, in its earlier avatar – Bharatiya Jan Sangh, fought the elections with its manifesto headlined “Jan Sangh Declares War on Poverty”. The Manifesto’s cover page showed an arm holding a danda (staff). One does not know whether the photo tried to invoke spirit of Mahatama Gandhi or of a Chowkidar.
The current war between the two parties is, however, is not a mere battle of slogans. It is serious clash of two approaches to remove poverty.
BJP is banking on all existing schemes plus the assumption for sustained economic growth. This is actually Modi Government’s approach to make India Poverty-free by 2022 under his New India Pledge unveiled during August 2017. This observation is tentative as BJP has not yet released its manifesto for 2019 Lok Sabha elections. It may contain some new initiative in the domain of inclusive growth.
No one is, however, buying Prime Minister Narendra Modi’s idea of poverty-free India by 2022. Not even NITI Aayog that he heads. In a 2016 presentation, NITI stated: “Growing at 10% will transform India – India will be a $10 trillion economy with no poverty in 2032”.