What is new
Shuddhi Yagna of PM’s Speech on Borders Yields Glittering Truth
- Published on 18 February 2023
Time Ripe for PM to Signal Revival of Stalled Fiscal Reforms
- Published on 07 January 2023
Fiscal Deficit-Heavy Budget Papers (Image Courtesy: PIB)
Would Prime Minister Narendra Modi apply his Gujarat Model of commitment to fiscal reforms at the national level? The trigger for this question is the mothballed fiscal law reforms at the Centre and its knock-on, adverse impact on States.
Both International Monetary Fund (IMF) and Comptroller & Auditor General (CAG) have flagged this inertia in their relevant reports released last month. These muted reports, however, don’t reveal three disturbing facts.
These are: A) Four-years’ holiday in presenting statutory, annual Medium-term Expenditure Framework (MTEF) to Parliament, thereby fueling economic uncertainties. B) The Finance Ministry’s (FM’s) blow-hot, blow-cold stance on amending Fiscal Responsibility and Budget Management Act (FRBMA), 2003. 3) Deafening silence on fiscal and debt reforms recommended by 15th Finance Commission (15thFC). Its final report was made public in February 2021. (https://bit.ly/3qOaNyo)
Before detailing these facts, recall what Mr. Modi, as Chief Minister, stated during June 2013. He articulated Gujarat’s fiscal reforms at an interaction with Mr. Jim O’Niell, a world-renowned economist who coined the name BRICS. The interaction was aptly captioned ‘Achieving India’s Full Economic Potential’ .
Mr. Modi recalled how he turned around Gujarat state finances from “severe fiscal deficits” into revenue surpluses. He also referred to enactment of the Fiscal Responsibility Act by the State. His government was thus able to allocate more money on the development front, he explained.
Mr. Modi agreed with Mr. Jim’s 2008 research paper titled ‘10 Things for India to Achieve its 2050 Potential’. The fifth item in this agenda was ‘Introduce a Credible Fiscal Policy: A Medium-Term Strategy’.
At that time, Mr. Jim was top-notch expert at Goldman Sachs and he had co-authored this paper with Tushar Poddar, then Chief Economist at Goldman Sachs’ Indian office.
On 23rd May 2019, Mr. Jim wrote a gentle reminder on this invaluable vision at a Bloomberg website. The article was captioned ‘Will Modi Turn To The Ten Things Needed To Deliver India’s 2050 Potential?’
Pitching for “A Credible Fiscal Policy”, he wrote: “I tried to persuade Modi’s advisors, and have publicly stated many times since, that India should consider some ‘Golden Rule’ for its fiscal policy framework.”
Decode Freebies Maze to Free Growth Genie
- Published on 04 December 2022
Revisit Constitution to Reform GST
- Published on 03 December 2022
Goods and Services Tax (GST) has the potential of being a cornucopia of goodies for all stakeholders. But it requires an innovative constitutional makeover in the true spirit of cooperative federalism. (This article is excerpted from '5 years of GST -The buggy Chugs on!' It is special publication from TIOL Knowledge Foundation. It was released during TIOL Tax Congress held during 7-8 November 2022.)