What is new
India Bears Colossal Fiscal Cost of Being a Soft State
- Published on 12 January 2020
(Image Courtesy: taxindiaonline.com)
India has paid & continues to pay huge price for being a soft State. We are a nation where good ideas take decades to take-off. We take decades to bite the bullet on strategic issues such as buying planes for Indian Air Force (IAF).
Delays in realm of policies & projects are legendary. Delays have become synonymous with Democracy in India. Delayed Justice is the unwritten rule of the law. Strict enforcement of rules always invites protests from activists & sound-byte hungry media. Many good intentions scripted in directive principles in the Constitution exist as such.
No wonder no one has quantified the fiscal and opportunity costs of delays since the Independence. Even a simple idea as Voter Identity Cards (VICs) has cost the country enormously due to 50-years span between enactment of amendment to a law in 1958 & its comprehensive execution (70% coverage) by 2007 across the country.
The cost of delay got compounded due to corrupt practices in issue of VICs. Illegal immigrants bought VICs with ease – a fact admitted time & again by Government in Parliament.
The right to vote is the last right conferred on aliens-turned citizens in certain democracies. In India, it is the first right sold for a song! Ditto was the case with generous recommendation from MLAs or MPs to issue ration card to illegal migrants in West Bengal – an issue raised by Mamata Banerjee and other MPs in Parliament during the eighties.
Row over Citizenship Should Pave Way for Demographic Code
- Published on 20 December 2019
(Image courtesy: censusindia.gov.in)
The Rhetoric over enactment of Citizenship (Amendment) Act 2019 (CCA, 2019) & ensuing riots call for a serious introspection. We should debate calmly as to why successive regimes & the Opposition have compromised national interest to play vote-bank politics.
Why no regime ever enacted a unified demographic code to govern citizenship, population control, emigration abroad and emigration within the country? Why illegal migrants continue to walk into India? Why infiltrators from countries adjoining both India & China don’t dare to enter the latter nation?
How infiltrators manage to get multiple identity cards including Aadhar and driving licence? This fact was recently admitted by Government in Parliament while answering question on Rohingyas, illegal migrants from Myanmar, staying in 12 States?
If they are being officially cared for as refugees, then why has the Government not enacted a refugee law as recommended by Group of Ministers (GoM) on Internal Security in 2001?
Should India be promoted as the Mecca for refugees in spite of it being on the verge of getting shameful label as the world’s most populous nation by 2027?
Pile of Evidence Shows GST Needs Surgical Strike
- Published on 27 November 2019
Edited Image Courtesy: aces.gov.in
The Government should show political will to re-design & stabilize goods and service tax (GST) system. The Government has so far taken in stride both grave concern and suggestions pertaining to this issue. It didn’t appear shaken by valuable advice from diverse quarters including the World Bank (WB) and Comptroller and Auditor General (CAG)
It should at least now bite the reforms bullet in response to repeated calls from Fifteenth Finance Commission (15thFC) Chairman N.K. Singh for reinventing GST to achieve its original objectives.
On 18th November 2018, Mr. Singh pitched for undertaking GST and other tax reforms. While launching TIOL National Taxation Awards portal, he noted that GST needs to undergo for “fundamental changes” to achieve its intended objective.
Four days later, he articulated his vision for GST reforms while delivering L.K. Jha memorial lecture organized by Reserve Bank of India (RBI).
Mr. Singh is epitome of wisdom on GST by virtue of his long association with the revenue administration. He has had unique honour of being entrusted twice by the Modi Government to lay roadmap for fiscal reforms.
Mr. Singh is now pitching for GST reforms after getting detailed feedback from all stakeholders – the Centre, the States, economists, businessmen and academics.
And the decisive & exhaustive logic for reforms would, of course, be contained in eagerly awaited report of 15thFC.
Instead of waiting for 15thFC report, the Government should first make up its mind to turn GST from growth retardant to growth booster.
Delivering the Lecture titled ‘Fiscal Federalism: Ideology and Practice’ Mr, Singh observed: “GST Council is still in its nascent phase and needs to revisit its design and decision-making process in a more fundamental way. This is also necessary to enable it to fulfil its original purpose”.
PTI quoted him as telling SBI Chairman Rajnish Kumar at the Lecture: “If you do not simplify GST, you will be defeating the very purpose and intention of why we took this far reaching step”.
Global Trade & Economic Growth Lose Speed in RTAs Maze
- Published on 21 November 2019
(Image Courtesy: PIB)
India’s decision to not join the Regional Comprehensive Economic Partnership (RCEP) is generating sound and fury. This should lead to a holistic study of the net global benefits, if any, of thickening jungle of regional trade/free trade/preferential trade agreements (RTAs/FTAs/PTAs).
The total number of RTAs signed during 1948-2018 stand at staggering 681. Of these, 301 are active. Had each bilateral or regional RTA led to rise in respective trade, the global trade would have soared to dizzy height. The situation is actually depressing.
According to WTO release dated 1 October 2019, “Escalating trade tensions and a slowing global economy have led WTO economists to sharply downgrade their forecasts for trade growth in 2019 and 2020”.
World merchandise trade volumes are now expected to rise by only 1.2% in 2019, substantially slower than the 2.6% growth forecast in April. The projected increase in 2020 is now 2.7%, down from 3.0% previously, it notes.
This issue also finds mention in United Nations Conference on Trade and Development (UNCTAD) report titled ‘Review of Maritime Transport 2019’.
Released on 30th October 2019, the Report points out that world maritime trade lost momentum in 2018, with volumes expanding at 2.7 per cent, below the historical averages of 3.0 per cent and 4.1 per cent recorded in 2017.
With these chilling facts in view, we thus need to put common-sensical questions on:1) Correlation between surging RTAs and global slowdown in both trade and economic growth. 2) Hype over RTAs as womb of global value chains (GVCs) and 3) Factors that negate the potential benefits of RTAs.