Modi’s remarks aimed to put across an India that was ready to synchronise itself with the Trump administration’s goals, but the US president made it clear he wanted India to commit to “free and fair trade”.
India’s exports are not matched with world import demand. Shifting our exports to those items on which there is global demand requires a more dynamic trade policy.
In an overhaul of the entire tax system, there are bound to be several hurdles to its smooth transition and implementation.
Ruling out any further slippage in the timeline, finance minister Arun Jaitley said Indian small business has been given enough time to prepare.
Most of the outreach efforts of the finance ministry to explain and create awareness about the GST have been with the bigger industry players.
What analysts and investors are looking for this time is a less hawkish policy statement to reflect reduced fears of inflationary pressures.
While GDP growth was 6.1%, belying market expectations, gross value added (GVA) growth slowed even more sharply in the fourth quarter to 5.6%. Sectors such as manufacturing and construction also took a sharp hit.
While the council’s logic for multiple slabs may run counter to the philosophy of a good GST, it was necessary to get the project off the ground. Its future structure should absolutely avoid the temptation of arbitrary rate fixation.
Although the GST reduced the tax burden on sanitary napkins, there is a need to consider why such a tax exists for what is a necessary good for many.
Once initial glitches in GST implementation are smoothed over, it is likely that only inefficient firms will find themselves in trouble.
After the government cancelled certain cesses that were meant for labourers’ welfare in preparation for the GST, activists suspect that many such moves may be around the corner.
Global experience shows that implementing GST caused severe short to medium term disruption in countries’ economies – we shouldn’t expect better from India’s half-baked version either.
There are a few kinks to be worked out, but if implemented well, the manufacturing sector could be a GST winner while the telecom sector is likely to be worse off.
Will the multiple rate structure go against the very idea of GST? How controversial will the proposed anti-profiteering authority be? How will unutilised money in the compensation be shared?
Despite the strong mandate, Modi still faces a struggle to implement reforms to boost growth and jobs.
There’s very little sensitivity being shown in forcefully shoving India’s small traders and producers into the formal economy. To what extent will this affect the BJP’s support base?
The finance minister’s announcements on moving towards a more progressive direct tax structure and tax incentives for MSMEs are heartening.
The consensus was reached after the Centre agreed to the demand of the states to go in for a horizontal split with regard to taxpayers based on annual turnover.
While Arun Jaitley talks of increased tax collection, banks are battling historically-low credit growth and small and medium businesses are staring at drastically decreased revenues.
Large companies have begun their ground work, but small and medium enterprises don’t seem ready for the new tax regime.
While the army was able to conduct surgical strikes across the border and undertake relief operations during the Chennai floods, India’s bankers have been unable to rise to the battle cry in the aftermath of demonetisation.
Ease Of Doing Business and Paying Taxes: How To Jump a Hundred Positions On the World Bank’s Rankings
If India can bring down the total number of payments to 10 and the total hours to comply to 160, even without changing the total tax rate, the ‘paying taxes’ rank could jump by over a hundred positions to the 60s.
Direct tax reform is necessary to ensure that implementation of the GST doesn’t contribute to stagflation.
A refusal to change our traditional adversarial approach to governance has the potential to hold GST reform hostage. This should not be allowed.
The passage of the bill will pave the way for setting up of a GST council that will decide the tax rate, cess and surcharges.
An early winter session would help get the Central GST and Integrated GST legislations approved, that will pave way for the GST, to be approved within November or latest by early December, government officials said.
There has been no attempt so far to design a comprehensive tax policy for medium and small enterprises, which would take all direct and indirect taxes into account and provide a clear, low-compliance-cost, fair policy option.
Perhaps Jaitley was not over-pitching when he argued that “the whole concept of the GST Council is Indian federalism at play in the best possible mode”.
State governments are elected to make difficult moral decisions on how to pay for priorities and transform society – an ability the GST destroys.
The bill was easily passed, with the Congress Party coming on board, after the government made about six changes including scrapping of 1 per cent manufacturing tax and incorporating clearer provisions for the compensation of states.
The passage of the GST bill through the Rajya Sabha will be a political, and not economic, success. The real task of implementing it still awaits us.
If the Centre needs to adopt a sensitive and reflective approach, the states too need to realise that they are not just competing amongst each other but also face global competition.
In its current form, the GST will have a negligible positive impact on growth, may be negative for the business environment, and may not even be revenue neutral.
A poorly implemented GST could be politically counter-productive. Which is why we should not treat it as a panacea, but as an instrument that may have to be refined in the coming years.
Union minister M. Venkaiah Naidu reached out to Congress leader Ghulam Nabi Azad ahead of the monsoon session, which starts on Monday.
The most vocal campaigner is Rajya Sabha MP Subramaniam Swamy who has publicly said Raghuram Rajan must be removed
Rather than give big business tax breaks, the FM and his new budget should simplify taxes for SMEs, enabling them to better contribute to growth.
Kolkata: What the Congress used to do with the Bengal unit of the party, the BJP is now doing to its parivar in the state. With one eye fixed firmly on the safe passage of bills in the Rajya Sabha, the BJP leadership is wooing the Mamata Banerjee-led Trinamool Congress, causing […]
The Prime Minister can do no better than to follow the advice of Barack Obama and Jawaharlal Nehru
New Delhi: A united opposition is set to corner the government over the issue of intolerance in the winter session of parliament beginning tomorrow but the prospects of a thaw on the crucial GST bill brightened with both sides expressing preparedness for discussing it. The opposition is likely to […]