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Indian Economy Needs Wholesome & Timely Bail-Out
- Published on 20 March 2020
Pandemic-Causing Covid-19 (Image Courtesy: nih.gov)
What is the difference between 2008 recession and unfolding 2020 recession? What is the difference in the magnitude of economic cost for India due to these two slowdowns? Would Modi Government’s fiscal smugness add to the miseries suffered by daily wager earners & temporary workers?
Such issues have to be addressed to understand all elements of unfolding economic crisis & why it is gravest for India.
The September 2008 recession was triggering by Lehman Brothers’ collapse-led global banking failure. It was quickly followed by Swine Flu, which originated in Mexico in April, and became a pandemic in two months. It led to 5-day lockdown of Mexico and moderately affected travel & tourism across the world.
Unlike 2008 recession, the present one was brewing since 2019 as pointed by several entities and economists. The recession has been accelerated by Covid-19 pandemic.
It is far more severe than swine flu or 2003 bird flu. Covid-19 might ultimately turn to be most severe one after the 1918 Spanish flu, which killed 40 million persons & wreaked havoc on global economy.
Both health experts and economists have predicted severe influenza pandemic even before arrival of Swine flu. It is important to recall their studies to get an idea of direct and indirect cost of Covid-19 menace.
It is equally important to recall the cost of fiscal and monetary stimulus unleashed by UPA regime to fight 2008 recession. Such an exercise should help Modi Government shift gears from wait-and-watch to rapid action to arrest & reverse economic meltdown.
Protest Culture Overshadows Work Culture In India
- Published on 20 March 2020
(Image Courtesy: Congress Party)
“The major problem of human society is to combine that degree of liberty without which law is tyranny with that degree of law without which liberty becomes license”.
Greek Philosopher, Heraclitus of Ephesus, stated this about 2600 years ago. His balanced vision is highly relevant to India where Freedom of Expression has blossomed into protest culture. This, in turn, endangers the liberty of others who want to carry on with their daily struggle for survival.
Disruption, when accompanied by destruction, wreaks havoc on economy as happened during countless instances of riots since 1947.
This right to disrupt other citizens’ right to work is best exemplified by Shaheen Bagh-branded protests across India. The hall-mark of these protests is grabbing of public spaces for days or months in total disregard for rights of other citizens.
The protest culture is also articulated by Members of Parliament during each session. They do so by posing in front of Mahatma Gandhi’s Statue within Parliament complex.
The peaceful protests against Citizenship Amendment Act (CAA) 2019 & CAA, 2003 often morph into riots and arson across India in recent months. CAA, 2003 envisaging creation of National Population Register (NPR) & National Register of Indian Citizens (NRIC). NPR already exists & has to be updated. NRIC rules have not yet been notified.
The first and the original Shaheen Bagh dharna on a major road was launched immediately after arson and stone-pelting indulged in a demonstration called by Jamia Millia University students. There were in fact two separate demonstrations – one from Jamia & other from Shaheen Bagh on 15th December 2019, if we recall news stories.
After riots & police’s entry into Jamia to chase & arrest rioters, protesting women sat on dharna on Shaheen Bagh road. Under a parallel initiative, hundreds of citizens gheraoed police headquarters for release of arrested accused rioters. The rest is history about Shaheen Bagh protests – dharna by women at strategic public places in several cities.
Railways Fails to Stop Downslide on Uphill Route
- Published on 16 February 2020
(Image Courtesy: Indian Railways)
Indian Railways (IR) is unable to check its slide-back despite herculean efforts. There is nothing concrete available to show that merger of Railway Finances with General Finances (RF-GF) in 2017-18 has changed IR’s fortunes.
The merger drew curtains on tradition of presenting separate rail budget in Parliament. This has derailed exhaustive debate and analysis of railways’ health that always followed presentation of the Rail Budget.
RF-GF integration, of course, fits well into NDA Government’s bigger game-plan to disclose minimum on economy to avoid criticism. The decline in transparency in the performance review of Railways is, however, letting its problems fester and worsen.
IR’s finances have been mentioned in Union Budget in the same way as the references to other departmental undertakings. The ‘Railways Budget at a Glance’ (RBAG) that used to a separate document under the Rail Budget Set of papers appears on 260th page of Expenditure Budget 2020-21 Volume I.
RBAG shows IR’s net revenue at Rs 3811 crore under revised estimate (RE) for 2019-20, which is 57.81% lesser than Budget Estimate (BE) of Rs 9035 crore. RE is slightly higher than actual net revenue of Rs 3773.86 crore earned in preceding year.
India’s Tax Reforms Fall Short of Expectations
- Published on 09 February 2020
(Edited Image. Courtesy: incometaxindia.gov.in )
How to avoid messing up reforms & check slowing down of a booming economy? If an international study on this issue is written, Indian taxation reforms would figure in it prominently. And evidence on this count especially on the big-bang goods and service tax (GST) keeps piling up.
A case in point is Indian Railways, the largest departmental enterprise. It is now struggling to replace more than 410 existing contracts with new ones (novation) to achieve tax efficiency with help of its GST consultant. Corporates of all sizes from different sectors are grappling with one GST issue or the other.
Another case in point is cautionary insight on GST & other taxes reforms issued by 15th Finance Commission (FC). It is a constitutional body constituted every five years to recommend distribution of divisible taxes between the Central and State (provincial) governments. Factor in too the Central Government's Budget for financial year 2020-21 that has, among other thing, hinted at fresh tinkering with GST rates.
Before elaborating on GST flux & resulting uncertainty, consider the fact that the outcome of all taxation reforms since 1991 is nothing to crow about if the tax revenue is measured as a percentage of gross domestic product (GDP). FC has pointed out that combined tax revenue of central and state governments has largely stagnated at 17.5% of the GDP since the early 1990s. This level is “far below India's estimated tax capacity”, it says. “In contrast to India, tax revenue has been rising in other emerging markets”.