At the cross-roads

G.Srinivasan

Yashwant Sinha With the economy in the midst of the crucial second half of the current fiscal, there is a sense of frenetic pace of activities from the Modi Sarkar, stung by the criticism of resident dissidents of stalwart stature such as former Finance Minister Yashwant Sinha and former Union Minister of Commerce, Industry and Disinvestment Arun Shourie.

Arun Shourie Sinha's outpourings manifest in his onslaught against the inept economic policies and the concomitant slowdown of the economy by the NDA government headed by Prime Minister Narendra Modi and his man Friday Finance Minister Arun Jaitley

Arun Jaitley expressed through a newspaper column made the normally salubrious month of September and the one followed by festival seasons in the country tumultuous with invidious interchange of points and counterpoints between not only biggies within the BJP party and the ones sidelined but also between the NDA and the motley number of scattered Opposition parties who were able to gather their scattered wits to highlight the real issues plaguing the polity on the ground for once.

P. Chidambaram Even as the government fielded cabinet ministers including Rajnath Singh Piyush Goyal, Yashwant Sinha's son Jayant Sinha, BJP President Amit Shah with the wounded Jaitley describing Yashwant Sinha's bonfire of the NDA economic policies as the frustrated remarks of an octogenarian's failed bid to get a place in the government, the nub of the attack remained irremovable from discerning minds because of the transparency and truthful nature of the charge. It was given to former finance minister P. Chidambaram to quip that the BJP and its government could no longer "hide behind the rhetoric of the prime minister and the slogans of the party and it is small mercy we no longer hear the slogan 'acche din aanewale hai".
Not the one to take criticism lightly, the Prime Minister responded to his detractors immediately at a function organized by the Indian Institute of Company Secretaries of India (IICS) in the capital to denounce them as "people who sleep well only after spreading pessimism".

Fortunately, the macroeconomic fundamentals of the economy appear to be robust now with indices of factory output during October 2017 showing up a salutary performance and September inflation numbers based on the wholesale price index declining too. The country's exports during the first half of the current fiscal too perked up with the prospects for the full year showing up a good performance on the back of the World Trade organization's (WTO) recent revised positive assessment of global trade growth for the second half of the year.

While stoutly defending his government's management of the economy with a pledge to reverse the slowdown in the economic growth, Modi took pride in the fact that India is no longer part of the so-called Fragile Five(an allusion to the BRICS bloc comprising Brazil, Russia, India, China and South Africa) or countries that stood to lose the most in 2013 from the US Federal Reserve indication to withdraw ultra loose monetary policy that led to taper tantrum. He recounted the government's reformist initiatives since he took over the office which numbered 87 reforms across 21 sectors and highlighted latest data to demonstrate the nascent green shoots in the economy.
Interestingly, the Prime Minister used the podium to scotch wild canards that his government will go all out to hound out companies joining the formal economy, particularly through the goods and services tax (GST) regime. "People keen to join mainstream (from the informal economy) fear that their old records may be reopened. We will not let that happen because earlier their old way of business was necessitated by prevailing circumstances. Nothing is more sinful than blocking those

Narendra Modi who want to come to the mainstream. Let bygones be bygones", the Prime Minister reassured all those apprehensive of the long arm of the laws. He further contended that "if any sector needs temporary assistance, on account of demonetization or the advent of GST, the government would give it, whether it is small and medium enterprise (SME), exports or the informal economy".
Not being defensive alone in words, Modi immediately followed in action by ensuring the return of the Economic Advisory Council (EAC) to the Prime Minister so that it could proffer important policy prescriptions and wise counsels to steer the ship of the economy in these troubled days when both internal demand and external markets for trading our goods remain tepid, lacking in traction to benefit by.
As a welcome pre-Diwali gift to trade and industry, the Goods and Services Tax (GST) Council, meeting on October 6, came out with a raft of decisions which include modification in the rates of 27 categories of goods and offer of a clutch of concessions to small enterprises and exporters .It needs to be recalled that small enterprises and exporters were finding it intractable to cope with the onerous burden of filing three GST returns very month and securing input credits. Those below an annual turnover limit of 20 lakh of rupees were finding it arduous to sell to registered businesses. Since the latter, as per the principle of 'reverse charge', would pay the GST, they would rather transact with a registered entity.
By keeping 'reverse charge' in abeyance, the GST Council, prodded by the Centre under burgeoning pressure to revive the economy and foster employment, has provided relief to small enterprises. Similarly, the increase in the threshold limit of the 'composition scheme' would reduce cumbersome compliance processes. Permitting units below a turnover of 1.5 crore of rupees to file quarterly rather than monthly returns comes as a breather for small units. Also, service-providers whether interstate or exporters have been given relief by making the 20 lakh of rupees threshold applicable to them. It is not fair in a digital age to presume that only large players transact across borders.

Arvind Subramanian It must be set in perspective that according to the Chief Economic Advisor Dr. Arvind Subramanian's 2015 report on GST, enterprises with a turnover of less than 10 crore of rupees account for 18 per cent of the total sales turnover and 98 per cent of enterprise assesses, whereas conversely, those above 10 crore of rupees (and above 100 crore of rupees) account for 82 per cent of the sales turnover and just two per cent of taxpayers. It therefore makes eminent sense not to slap stifling norms on a large section of the assessees if invoice details could be provided on a half-yearly or annual basis and summary returns on a monthly basis to the vast majority of GST asseseees.
As for rate revision, tax on 27 items including sliced dried mangoes, khakra, plain chapattis, unbranded namkeen, man-made yarn, stationery, diesel engine parts and services such as zari job work have been whittled down to mollify irascible small industries before the onset of polls in many States.
Even as the rush to implement the GST on July 1 has resulted in much avoidable confusion from the day one with a series of revisions, ambiguity on many facets still persisting, the alterations made in mid-course do point to the fact that the authorities are not totally insensitive and stubborn and that they do learn by mistakes to make the dream of one India one tax a potential success story India would be scripting in the foreseeable future to the marvel of the world, policy analysts say. With the Government's freshly appointed PM EAC admitting the economic growth slowdown in its first full meeting chaired by the Prime Minister, the stark reality to initiate action and keep the wheels of the real sectors of the economy moving are now incumbent upon the Modi Sarkar.
Fortunately, the macroeconomic fundamentals of the economy appear to be robust now with indices of factory output during October 2017 showing up a salutary performance and September inflation numbers based on the wholesale price index declining too. The country's exports during the first half of the current fiscal too perked up with the prospects for the full year showing up a good performance on the back of the World Trade organization's (WTO) recent revised positive assessment of global trade growth for the second half of the year.
The BJP-led NDA government has its priorities cut out and it has no alibi for putting up a good performance on the economy before it seeks a fresh mandate in 2019 and in between a few major State Assembly polls intervening. The party secured a thumping majority in Parliament in 2014 and more than half of the 26 State governments today are in the hands of the BJP, a scenario seldom seen in post- Independence era when the Congress party dominated the landscape like a colossus.
It is up to both the national parties to challenge each other on the terrain to wrest control in the polls only through a credible policy plank and creditable stalwarts to take India to a pole position in the global economy before long.



		EDITOR'S MAIL MATTERS OF PUBLIC POLICY FRANKLY SPEAKING CHANGING ORDER SOCIETY & RELIGION STATE OF ARMED FORCES REALPOLITIK INDIAN ECONOMY US OIL EXPORT OTHER BACKWARD CASTES SIGNS OF THE TIMES SIKHISM DIRTY ADVERTISEMENT HITS & MISSES SPORTS APPOINTMENT OF LOKAYUKTA HIMACHAL POLL SOLAR SCAM CHANDIGARH DIARY CHINA WATCH PAK POWER STRUGGLE AMERICAN DIARY BOOK BAZAAR POLLUTION AND RESOLUTION YOGA IN DAILY LIFE A SINGER'S JOURNEY ART OF LIVING Issue:Sep' 2017 Subscribe Now	INDIAN ECONOMY At the cross-roads G.Srinivasan Yashwant Sinha With the economy in the midst of the crucial second half of the current fiscal, there is a sense of frenetic pace of activities from the Modi Sarkar, stung by the criticism of resident dissidents of stalwart stature such as former Finance Minister Yashwant Sinha and former Union Minister of Commerce, Industry and Disinvestment Arun Shourie. Arun Shourie Sinha's outpourings manifest in his onslaught against the inept economic policies and the concomitant slowdown of the economy by the NDA government headed by Prime Minister Narendra Modi and his man Friday Finance Minister Arun Jaitley Arun Jaitley expressed through a newspaper column made the normally salubrious month of September and the one followed by festival seasons in the country tumultuous with invidious interchange of points and counterpoints between not only biggies within the BJP party and the ones sidelined but also between the NDA and the motley number of scattered Opposition parties who were able to gather their scattered wits to highlight the real issues plaguing the polity on the ground for once. P. Chidambaram Even as the government fielded cabinet ministers including Rajnath Singh Piyush Goyal, Yashwant Sinha's son Jayant Sinha, BJP President Amit Shah with the wounded Jaitley describing Yashwant Sinha's bonfire of the NDA economic policies as the frustrated remarks of an octogenarian's failed bid to get a place in the government, the nub of the attack remained irremovable from discerning minds because of the transparency and truthful nature of the charge. It was given to former finance minister P. Chidambaram to quip that the BJP and its government could no longer "hide behind the rhetoric of the prime minister and the slogans of the party and it is small mercy we no longer hear the slogan 'acche din aanewale hai". Not the one to take criticism lightly, the Prime Minister responded to his detractors immediately at a function organized by the Indian Institute of Company Secretaries of India (IICS) in the capital to denounce them as "people who sleep well only after spreading pessimism". Fortunately, the macroeconomic fundamentals of the economy appear to be robust now with indices of factory output during October 2017 showing up a salutary performance and September inflation numbers based on the wholesale price index declining too. The country's exports during the first half of the current fiscal too perked up with the prospects for the full year showing up a good performance on the back of the World Trade organization's (WTO) recent revised positive assessment of global trade growth for the second half of the year. While stoutly defending his government's management of the economy with a pledge to reverse the slowdown in the economic growth, Modi took pride in the fact that India is no longer part of the so-called Fragile Five(an allusion to the BRICS bloc comprising Brazil, Russia, India, China and South Africa) or countries that stood to lose the most in 2013 from the US Federal Reserve indication to withdraw ultra loose monetary policy that led to taper tantrum. He recounted the government's reformist initiatives since he took over the office which numbered 87 reforms across 21 sectors and highlighted latest data to demonstrate the nascent green shoots in the economy. Interestingly, the Prime Minister used the podium to scotch wild canards that his government will go all out to hound out companies joining the formal economy, particularly through the goods and services tax (GST) regime. "People keen to join mainstream (from the informal economy) fear that their old records may be reopened. We will not let that happen because earlier their old way of business was necessitated by prevailing circumstances. Nothing is more sinful than blocking those Narendra Modi who want to come to the mainstream. Let bygones be bygones", the Prime Minister reassured all those apprehensive of the long arm of the laws. He further contended that "if any sector needs temporary assistance, on account of demonetization or the advent of GST, the government would give it, whether it is small and medium enterprise (SME), exports or the informal economy". Not being defensive alone in words, Modi immediately followed in action by ensuring the return of the Economic Advisory Council (EAC) to the Prime Minister so that it could proffer important policy prescriptions and wise counsels to steer the ship of the economy in these troubled days when both internal demand and external markets for trading our goods remain tepid, lacking in traction to benefit by. As a welcome pre-Diwali gift to trade and industry, the Goods and Services Tax (GST) Council, meeting on October 6, came out with a raft of decisions which include modification in the rates of 27 categories of goods and offer of a clutch of concessions to small enterprises and exporters .It needs to be recalled that small enterprises and exporters were finding it intractable to cope with the onerous burden of filing three GST returns very month and securing input credits. Those below an annual turnover limit of 20 lakh of rupees were finding it arduous to sell to registered businesses. Since the latter, as per the principle of 'reverse charge', would pay the GST, they would rather transact with a registered entity. By keeping 'reverse charge' in abeyance, the GST Council, prodded by the Centre under burgeoning pressure to revive the economy and foster employment, has provided relief to small enterprises. Similarly, the increase in the threshold limit of the 'composition scheme' would reduce cumbersome compliance processes. Permitting units below a turnover of 1.5 crore of rupees to file quarterly rather than monthly returns comes as a breather for small units. Also, service-providers whether interstate or exporters have been given relief by making the 20 lakh of rupees threshold applicable to them. It is not fair in a digital age to presume that only large players transact across borders. Arvind Subramanian It must be set in perspective that according to the Chief Economic Advisor Dr. Arvind Subramanian's 2015 report on GST, enterprises with a turnover of less than 10 crore of rupees account for 18 per cent of the total sales turnover and 98 per cent of enterprise assesses, whereas conversely, those above 10 crore of rupees (and above 100 crore of rupees) account for 82 per cent of the sales turnover and just two per cent of taxpayers. It therefore makes eminent sense not to slap stifling norms on a large section of the assessees if invoice details could be provided on a half-yearly or annual basis and summary returns on a monthly basis to the vast majority of GST asseseees. As for rate revision, tax on 27 items including sliced dried mangoes, khakra, plain chapattis, unbranded namkeen, man-made yarn, stationery, diesel engine parts and services such as zari job work have been whittled down to mollify irascible small industries before the onset of polls in many States. Even as the rush to implement the GST on July 1 has resulted in much avoidable confusion from the day one with a series of revisions, ambiguity on many facets still persisting, the alterations made in mid-course do point to the fact that the authorities are not totally insensitive and stubborn and that they do learn by mistakes to make the dream of one India one tax a potential success story India would be scripting in the foreseeable future to the marvel of the world, policy analysts say. With the Government's freshly appointed PM EAC admitting the economic growth slowdown in its first full meeting chaired by the Prime Minister, the stark reality to initiate action and keep the wheels of the real sectors of the economy moving are now incumbent upon the Modi Sarkar. Fortunately, the macroeconomic fundamentals of the economy appear to be robust now with indices of factory output during October 2017 showing up a salutary performance and September inflation numbers based on the wholesale price index declining too. The country's exports during the first half of the current fiscal too perked up with the prospects for the full year showing up a good performance on the back of the World Trade organization's (WTO) recent revised positive assessment of global trade growth for the second half of the year. The BJP-led NDA government has its priorities cut out and it has no alibi for putting up a good performance on the economy before it seeks a fresh mandate in 2019 and in between a few major State Assembly polls intervening. The party secured a thumping majority in Parliament in 2014 and more than half of the 26 State governments today are in the hands of the BJP, a scenario seldom seen in post- Independence era when the Congress party dominated the landscape like a colossus. It is up to both the national parties to challenge each other on the terrain to wrest control in the polls only through a credible policy plank and creditable stalwarts to take India to a pole position in the global economy before long.