Modi has failed miserably in delivering on his promise [made in his speeches in the run up to the general elections in 2014] of creating 20 million jobs every year. To demonstrate their point, the critics often point to hundreds of thousands youth submitting applications for a few vacancies of peon or clerk in government departments/ministries. They cite this yawning gap as an indicator of alleged joblessness in the country. The underlying assumption behind this inference is that all those hundreds of thousands youth who applied for the available vacancies do not have any work at hand or any source of income. Such an assumption is fallacious. Had it been so i.e. millions of youth without an income source, there...
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Category: Growth & employment
80 million jobs in 4 years – Modi has kept promise
As Modi – government completes four years of its term in this month, it is time to take stock of its performance particularly, on the jobs front which has been at the centre-stage of criticism by opposition parties all along and will be a major plank of campaigning in the run up to the next general elections in 2019. During his speeches in 2014, prime minister, Modi had promised job generation by a mammoth 20 million every year. The electorates especially, the unemployed youth were overwhelmed and accordingly gave him an absolute majority to run the country. Now, when we look back, there is a perception that he has not lived up to this promise; critics go that far to...
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Don’t kill Aadhaar at the altar of privacy
The Comptroller and Auditor General [CAG] has exposed diversion of subsidized food meant for poor households under the National Food Security Act [NFSA] in Delhi – using fraudulent means such as fake ration cards, fake mobile numbers etc – causing loss of over Rs 7000 crore to the exchequer. This is one among several such scams resulting in massive leakage from Rs 145,000 crore being the food subsidy spent by the union government annually. Likewise, there are monumental leakages from other welfare schemes such as fertilizer subsidy, LPG subsidy, MGNREGA [Mahatma Gandhi National Rural Employment Guarantee Act], education subsidy, pension, power subsidy etc. In other areas such as real estate, a handful of persons appropriate public land in prime locations...
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GST/Demonetization/IBC – the trio behind inclusive growth
While, presenting the budget for 2017-18, the finance minister, Arun Jaitely had fixed a target of Rs 9.8 lakh crore for collection of direct tax. Against this, the government has already touched Rs 9.95 lakh crore and is expected to reach Rs 10 lakh crore by the time figures for the last few days of March, 2018 get confirmed. Under the Goods and Services Tax [GST] rolled out on July 1, 2017, out of total collection of Rs 7.20 lakh crore till February, 2018, centre’s share is Rs 4.60 lakh crore which is Rs 16,000 crore higher than the target [Rs 4.44 lakh crore]. This is despite the fact that various tax evasion and safety measures such as electronic-way [e-way]...
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Salvaging failed banks – don’t punish depositors
The unsustainable high NPAs [non-performing assets] of banks – most of these with public sector banks [PSBs] – have caused massive erosion in their capital. This in turn, has forced the government to come out with massive infusion of fresh capital to bail them out. But, this has led to serious concern about the impact it will have on the center’s balance sheet and its fiscal consolidation efforts. No wonder, international financing agencies such as International Monetary Fund [IMF] and World Bank as also rating agencies have flagged ballooning NPAs as major area that could mar the prospects of India embarking on a high growth trajectory [notwithstanding fundamental reforms such as demonetization and GST implemented by Modi – government]. The...
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Fiscal roadmap abandoned midstream
In his budget speech for 2016-17, finance minister, Arun Jaitley had announced the government’s intent to review Fiscal Responsibility and Budget Management (FRBM) Act with a view to make the target flexible to make it range bound instead of a fixed number as had been the position hitherto under the extant Act in vogue since 2003. Accordingly, a committee under NK Singh was set up to examine this issue besides revamping of the Act. The committee recommended a fiscal deficit target of 2.5% of gross domestic product (GDP), revenue deficit of 0.8%, a combined centre-state debt ceiling of 60% and a central debt ceiling of 40% by fiscal 2022-23, under a six-year medium-term fiscal roadmap. It also recommended a fiscal...
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Fight against corruption – targeting crusader is unconscionable
After taking charge, in his very first Independence Day address on August 15, 2014, prime minister, Modi declared himself as ‘Pradhan Sewak’ – a colloquial term for principal servant. Coining yet another term ‘chowkidar’ [security guard], Modi roared that all of country’s resources – physical and monetary – belong to the people and that he was duty bound to protect these resources. In the same breath, he vowed to bring back all the resources that were looted by corrupt politicians, bureaucrats and industrialists and re-deploy for welfare of the poor. A cursory glance at the actions taken by his government during the last 45 months or so, would show that he has walked the talk. Be it demonetization, Goods and...
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Taxing discounts – a conundrum
Giving discounts on sale of products – purportedly with a view to lure customers and boost sales – has been an age-old phenomenon. Most of the companies operating under competitive market environments take recourse to this practice. With the advent of e-commerce however, and players in this segment [especially those with deep pockets either of their own or supported by MNCs in case of domestic players] in a hurry to capture a good chunk of the retail market in shortest possible time frame, are offering substantial discounts which in some cases could be 50% of the maximum retail price [MRP] or even more. Until hitherto, these were allowed to be deducted as business expenses leading to corresponding reduction in the...
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NPAs – will the patient survive surgery?
Replying to the debate on President’s address during the opening of the budget session of the parliament, prime minister, Modi squarely blamed the erstwhile UPA dispensation led by Congress for the most serious problem of NPAs [non-performing assets] of the banks – mostly public sector banks [PSBs]. What Modi was alluding to was that there had been massive proliferation of loans given by the banks on the directions of the ruling political establishment to favored industrialists and businessmen without conducting due diligence, assessing the viability of the projects/businesses and seeking mortgages. During 2008-2014, loans worth Rs 3500,000 crore were given. A big slice of these loans turned in to NPAs. Yet, these were kept under cover even as a host...
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Resurrection of long-term capital gains tax – a welcome move
The long-term capital gains tax [LTCGT] or tax on capital gains made from investment in equity shares and units of equity oriented funds [whose underlying investment is in shares] held for more than one year was withdrawn in 2004-05. This was to encourage long-term investment in equity shares and give boost to the capital market. In budget for 2018-19, finance minister, Arun Jaitely has re-introduced LTCGT @ 10% on capital gains made in excess of Rs 100,000/- annually. However, the gains accruing from existing investment in equity shares prior to January 31, 2018 will be grandfathered. This implies that any appreciation in the value up to this date will not be considered for computing the taxable gain. For instance, investment...
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