Both former Finance Minister Yashwant Sinha and his minister son, Jayant, are exceedingly bright. They seem to know what they are talking about. Their views on the current state of the economy, expressed by Yashwant Sinha in a column in The Indian Express, and by Jayant Sinha in the Times of India, were bound to attract notice. Despite the disparate distance between the contents, focus and emphases of the two columns, it is possible to locate some common ground: the economy is under stress, all right, but, as Jayant Sinha underlined, acchhe din might not be too far away on the horizon.
Where the 80-year-old Sinha seemed to have gone horribly wrong was to allow his own personal prejudice and pique to cancel out some very valid criticism of the recent economic decision-making. Particularly painful for the country was the abrupt and ill-implemented demonetisation followed virtually on its heels by the roll-out of the half-cooked GST. Nobody in his right mind would deny that both well-meaning and far-reaching reforms could have done with greater preparation and better imagination.
But if Yashwant Sinha were to put himself in the shoes of decision makers, he would immediately realise that when you have 30-plus cooks rustling up a meal, the end product cannot be most edible. Yes, the GST in its present form is far from being “one nation, one tax” it was billed out to be. But it is better to press ahead with a half-baked reform than none at all. Yes, there are a thousand glitches, a thousand headaches in understanding and implementing the new-fangled tax at the level of individual tax-payers. But to suggest that we should have waited till the 30-odd cooks—that is the 29 states and seven UTs together—came up with a perfect version of GST is foolhardy. Once implemented, it is expected that the rough edges will be smoothed and enforcement made easier for faster and hassle-free compliance. It is harsh and unjust on millions of small- and medium traders to file monthly returns in triplicate, especially when they haven’t felt the need to pay any sort of taxes all their working lives.
Right now those crying the loudest against the poor implementation of GST constitute the core of the BJP constituency. The we-couldn’t-care-less attitude of the Modi government has spawned angry protests by various traders’ associations, particularly those dealing in textiles, milk products, and even garment exports. This requires immediate attention of the authorities. Requisite changes to accommodate the genuine concerns of the people even if it entails a temporary loss of revenue and diminution of the GST concept ought to be made. Making it a prestige issue can only lead to further alienation of the ruling party’s support-base.
It seems that the government proceeds on the assumption, not easy to dismiss though, that everybody is a thief and would do their worst to avoid paying their due to the public kitty. However, this belief has led to an across-the-board blacklisting of shell companies not all of which were in the illegitimate business of money-conversion and not all of their directors were culpable of wrong-doing. The single-minded enforcement of honesty in taxation matters needs to be tempered with considerations of equity and justice in order to ensure that the innocent do not suffer.
Now, for the criticism that the GDP is down to 5.7% in the last quarter. As any economist would tell you, not all of it is due to demonetisation and/or GST. Some of it is certainly due to the global cyclical decline. The Federal Reserve is threatening to unwind soon. Global crude prices are once again inching upwards. Foreign funds are pulling out money from the BSE. Contrary to early Met predictions, monsoon has been deficient and uneven. Despite general price stability, food inflation is beginning to rise. And lack of fresh job opportunities in the organised sector is directly linked to the financial anarchy and crony capitalism that had reigned unchecked in the previous UPA decade.
Therefore, it does not lie in the mouth of someone like P. Chidambaram to blame the current government for the downward spiral in the economy after the mess he had left behind in May 2014.
Poor credit off-take is the direct result of the yeoman’s efforts by the Modi government to recover lakhs of crores of public funds lent at the say-so of ministers in power or their near and dear ones for hefty commissions. Ever-greening of dud loans was rampant under the UPA. Those who now pillory Modi for the slowing economy should pause to consider how the big borrowers are now being made to cough up bank funds at the pain of jail and loss of their business empires.
No other regime in free India has gone after the big fish as this government has. Give credit where it is due. Modi has shown zeal to enforce honesty in the conduct of business. It is an uphill task. But you can rely on Modi to heed genuine criticism and make necessary changes.
As an adviser to Arvind Kejriwal, Yashwant Sinha’s peevish cry could well be justified. Also, its ready endorsement by the likes of P. Chidambaram might reflect the poverty of ammunition in the Gandhis-owned party. But what the senior Sinha needs to ponder is whether it was proper for a leading light of the ruling party to air his vituperation through the columns of a newspaper. Again, by complaining that for ten months, Modi had refused to meet him, he only detracted further from whatever little conviction he could have carried with his angry swipe at the Finance Minister. Not being where Arun Jaitley is causes heartburn to a lot of people in the BJP, Sinha is not the only one. Jealousy, Sinha ought to know, is a most wasteful emotion.
Fake news
One, the Modi government will soon make it mandatory for every adult Indian to tattoo the Aadhaar number on his right forearm and PAN on his left, while the GST number is to be tattooed on the forehead. Two, when Rahul Gandhi last met Sachin Tendulkar, he commiserated with him, saying that though he was senior, his name did not figure in the national anthem while Dravid’s did. And he promised to make suitable amends once he became prime minister.
A Freudian slip?
One of the several companies of Karti Chidambaram under the CBI-ED scanner is named Advantage Strategic Consulting Pvt Limited. Pray, what advantage was he advertising other than the fact that he was P. Chidambaram’s son?