Skip to main content

A reform at risk (thehindu)

Finance Minister Arun Jaitley is keeping his fingers crossed about sticking to the April 1, 2017 target to implement the Goods and Services Tax regime. The GST Council he heads meets again on December 11-12 to try to reach a consensus on three pieces of legislation that need to be cleared by Parliament in this session for a rollout in April. In its previous three meetings, the Council failed to resolve an impasse between the States and the Centre on who would have administrative control over taxpayers in the new tax regime. The Finance Ministry has proposed a dual control model where both vertically split the taxpayer base for administrative purposes. But States including West Bengal, Kerala and Uttar Pradesh are keen to retain control over all goods and services providers with an annual turnover of less than Rs.1.5 crore. At the last meeting, the States hardened their position by flagging the loss of revenue on account of the demonetisation of high value currency notes.

While the Council is yet to discuss the legislation that deals with compensation for loss of revenue, it has gone over nine chapters each of the two other proposed laws that Parliament needs to pass to ring in the GST, including the model GST law. For a rapprochement with States on these bills, the Centre may have to be more generous in responding to their demands. It could also resort to a vote for the first time in the Council instead of seeking to forge unanimous decisions. Parliament is expected to function for just three days next week. Unless its schedule is extended, with the currency crisis stalling proceedings so far, the GST’s April timeline is looking increasingly tricky. It is true that the government is likely to push the three GST bills as Money bills, so they only need a Lok Sabha nod, and the GST regime can kick in as late as September 2017. But implementing such a big-ticket tax reform without bringing all States on board or getting the new regime going in the middle of a financial year would inspire less confidence than otherwise. It would also be a headache for industry as well as the taxman. Opposition-ruled States, on their part, must resist the temptation to derail the tax reform, and work to ensure that the fine print actually boosts investor sentiment. For instance, there is a proposal to set up an anti-profiteering authority that could penalise businesses if they are deemed to have not transmitted GST benefits to consumers. Just as States should compete for investment, businesses should be allowed to compete freely. Suggesting that the profit motive itself is evil would undo the fundamental intent of the GST, which is to remove the space fo r discretion and rent-seeking.
Post a Comment


Popular posts from this blog

SC asks Centre to strike a balance on Rohingya issue (.hindu)

Supreme Court orally indicates that the government should not deport Rohingya “now” as the Centre prevails over it to not record any such views in its formal order, citing “international ramifications”.

The Supreme Court on Friday came close to ordering the government not to deport the Rohingya.

It finally settled on merely observing that a balance should be struck between humanitarian concern for the community and the country's national security and economic interests.

The court was hearing a bunch of petitions, one filed by persons within the Rohingya community, against a proposed move to deport over 40,000 Rohingya refugees. A three-judge Bench, led by Chief Justice of India Dipak Misra, began by orally indicating that the government should not deport Rohingya “now”, but the government prevailed on the court to not pass any formal order, citing “international ramifications”. With this, the status quo continues even though the court gave the community liberty to approach it in …

Khar’s experimentation with Himalayan nettle brings recognition (downtoearth)

Nature never fails to surprise us. In many parts of the world, natural resources are the only source of livelihood opportunities available to people. They can be in the form of wild shrubs like Daphne papyracea and Daphne bholua (paper plant) that are used to make paper or Gossypium spp (cotton) that forms the backbone of the textile industry.

Nothing can compete with the dynamism of biological resources. Recently, Girardinia diversifolia (Himalayan nettle), a fibre-yielding plant, has become an important livelihood option for people living in the remote mountainous villages of the Hindu Kush Himalaya.

There is a community in Khar, a hamlet in Darchula district in far-western Nepal, which produces fabrics from Himalayan nettle. The fabric and the things made from it are sold in local as well as national and international markets as high-end products.

A Himalayan nettle value chain development initiative implemented by the Kailash Sacred Landscape Conservation and Development Initiati…

India’s criminal wastage: over 10 million works under MGNREGA incomplete or abandoned (hindu)

In the last three and half years, the rate of work completion under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has drastically declined, leading to wastage of public money and leaving villages more prone to drought. This could also be a reason for people moving out of the programme.

At a time when more than one-third of India’s districts are reeling under a drought-like situation due to deficit rainfall, here comes another bad news. The works started under the MGNREGA—close to 80 per cent related to water conservation, irrigation and land development—are increasingly not being completed or in practice, abandoned.

Going by the data (as on October 12) in the Ministry of Rural Development’s website, which tracks progress of MGNREGA through a comprehensive MIS, 10.4 million works have not been completed since April 2014. In the last three and half years, 39.7 million works were started under the programme. Going by the stipulation under the programme, close to 7…