Showing posts with label gst. Show all posts
Showing posts with label gst. Show all posts

Sunday, November 12, 2017

Demonetization: A Year Later

How India Is Moving Toward a Digital-First Economy
On November 8, 2016, India’s government did something that no other government had attempted before at the same scale: It decided to remove 86% of the country’s currency notes by value from circulation. Over the months that followed, more than 1 billion people participated in a “reboot” of the country’s financial and monetary system. .......... a threshold moment in India’s digital transformation. .......... a government payment system created in 2016 that was processing 100,000 transactions per month in October of that year, prior to the sudden demonetization. A year later, after demonetization, the same system is processing 76 million transactions per month. ........ the country’s economy is operating with $45 billion less cash than it did prior to demonization ......... the largest-scale tax reform ever implemented at a single time: the replacement of a complex web of 17 different taxes with a single Goods and Services Tax (GST). ......... in the first month after the introduction of the GST, over 1 million businesses registered with the system. In only the first few weeks after implementation, the increased transparency and digital data availability that are integral to the GST began to open up new sources of lending to small and medium-size enterprises (SMEs). .......... the “India Stack.” ........ At the base of the stack — and thus at the beginning of India’s story of digital transformation — is a nationwide system of digital identity, generically termed the UID (Unique Identification) system, but more often in India referred to by its project name, Aadhaar. ........ Of the systems that have broken the 1-billion-user mark, many originated in the U.S. and are private-sector efforts — Facebook and Google being among the prominent examples. An exception is Aadhaar, which means “foundation” or “base” in a number of Indian languages, including Hindi. ........ Aadhaar is both the only non-U.S. technical system globally to have broken the 1-billion-user threshold and the only such system to have been developed by the public sector. ....... Aadhaar has the distinction of having reached 1 billion users the fastest; the services built on Aadhaar, through the interoperability that defines the India Stack have, in turn, built their own record of scale and scope. ......... India launched Aadhaar in 2009 with the then-improbable goal of giving every Indian a single digital identity in the form of a biometric authenticated 12-digit number. ....... a unique number based upon de-duplication of the applicants’ biometric information, their submitted iris scans and fingerprints. ....... the search for a “killer app” to prove the value of Aadhaar was elusive. While the ability to authenticate identity was now digital, bank accounts and payment systems were still paper-based — requiring separate and laborious Know Your Customer validation procedures that had the result of continuing to exclude a majority of people in India from accessing the benefits of banking. ........ Modi not only backed the system developed by the previous government but also dramatically increased its funding, broadened its scope, and — most important — amplified its impact. ........ Among the first actions the Modi government undertook was to launch the Pradhan Mantri Jan–Dhan Yojana (PMJDY, or Jan Dhan) financial inclusion program on August 28, 2014. On the very first day that Jan Dhan was implemented, the government created 10 million bank accounts using existing Aadhaar IDs in a paperless manner, at a fraction of the minimum previous customer acquisition costs. Since then, the government has created more than 300 million new, no-frills bank accounts. In additional to a free, zero-balance account, the Jan Dhan provides accident insurance coverage of 100,000 rupees (about US$1,500), along with an overdraft facility of 5,000 rupees (US$80) available for account holders — the point being to incentivize people to participate in the formal banking system. ......... Having a biometrically-verifiable identity number and a bank account created the potential for adding another layer to the service stack: mobile payments. With an identity to create a bank account, and a bank account to receive funds, the hundreds of millions of people eligible for the receipt of government services in India suddenly had a way to access those services digitally, from beginning to end. In India this digital infrastructure is nicknamed the “JAM” trinity, referring to innovative interlinking of Jan Dhan (low-cost bank accounts), Aadhaar (identity), and mobile numbers. The India Stack could now have four layers: an identity layer, a documents layer, a payments layer, and a transactions layer. ......... To understand the human impact of these changes, consider the plight of a mother in an Indian village who is eligible for a government subsidy to send her two daughters to school. Until less than two years ago, in order to avail herself of those funds she would have needed to fill out a form verifying her daughters’ attendance, get that form validated by the school, and bring that form to a government office. Assuming there were no impediments in the processing of the form — a big assumption — she would then have waited as the form traveled up the system to the point when a check would be issued to her in the amount of her benefits. To collect the check she would have needed to travel to a government office. If there turned out to be corruption in the office, she would have needed to produce a sum in cash equal to 15%–20% of the total amount before finally receiving the check. Then, of course, she would have needed to travel to a bank to cash the check. In the end, of the 2,000 rupees to which she was entitled, she would (in a good outcome) have received about 1,400 rupees, with the balance having gone to travel and corruption money........... If we consider this same situation using India Stack, the mother can use a tablet or smartphone to validate her identity using her Aadhaar number in the office of her daughters’ school. Her eligibility for the program is already in the system, and her Aadhaar number is now linked to the zero-balance bank account created for her under the Jan Dhan financial inclusion program. The workflow approves her request in a batch process. Within 24 to 48 hours she gets an alert on her phone that the full 2,000-rupee amount has been transferred to her bank account. ............ the India Stack is envisioned as new social infrastructure with the capacity to increase the resilience of Indian society to change, and thus to help propel India into the 21st-century digital economy. The deployment of the India Stack was one significant precondition for major structural reforms undertaken by the Modi government. This brings us back to demonetization and implementation of tax reforms. ........ The idea of accomplishing a dramatic shift in the nature of the economy with a set of suddenly implemented policies is not new. The “shock therapy” programs of the early 1990s, intended to accomplish the shift from socialist to market economies in Eastern Europe and the former Soviet Union, were based on a similar premise. However, where those programs created an environment in which a few powerful individuals were able to appropriate vast quantities of formerly government-held assets, India’s digital shock therapy has — measurably and verifiably — accomplished the opposite: It has eliminated vast concentrations of “off-the-books” wealth, resetting the clock of development at a more equitable starting point. ........... When India underwent demonetization, the India Stack was suddenly and dramatically thrown into action. India’s own payments corporation launched the BHIM application, a digital payments platform using the Universal Payments Interface underlying the JAM trinity. BHIM became one of fastest-downloaded financial payments applications in recent history. The Universal Payments Interface system is very inclusive, such that it serves both smartphone and non-smartphone users, so every Indian can access banking and make payments digitally. .......... the Indian economy is operating with about $45 billion less cash than if demonetization had not taken place. Banks have far greater liquidity, SME lending is at an all-time high, and digital transactions have multiplied 760 times over in some cases. ......... Prior to the introduction of the GST, companies of any size in India had to keep track of no fewer than 17 different categories of taxes on sales and transactions, including state-level value-added taxes and levies on the interstate transportation of goods. On July 1, 2017, all 17 of those taxes were subsumed into one tax: the GST. ......... an opaque and irrational system that had developed over decades, and that varied across states, was replaced by a simple, transparent system applicable nationwide. ........ India is adding almost 110 million smartphone users every year, and is on the verge of launching Aadhaar-compliant devices with biometric authentication built into phones and tablets. The power of the JAM trinity will come into full force when transactions are enabled using Aadhaar and biometric authentication, creating a system that is not only cashless but cardless. Already, a new entrant into telecommunications service in India has succeeded in using the India Stack to enroll 108 million consumers in 170 days with a totally paperless, mobile-centric manner — in the process achieving customer acquisition costs of less than $1 (USD) per customer, compared with the prior industry standard of $25. ......... India’s development was inequitable and inconsistent for far too long; the country still has a long way to go. The societal challenges created by digital disruption, challenges both expected and unintended, are real. They will be addressed only with a combination of administrative humility and entrepreneurial determination. But the long-term benefits are real. The reality is that India is moving into the future at an unprecedented rate. And the path it is taking to get there is digital.
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Thursday, September 28, 2017

Modi's 2019: Contested And Won Already

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Sunday, January 17, 2016

India: GST Bill

सरदार पटेल ने जिस तरह भारतका राजनीतिक एकीकरण किया और उनको बिस्मार्क कहा जाता है, उसी तरह अरुण जेटली भारत का आर्थिक एकीकरण करना चाहते हैं इस GST Bill के रास्ते। तो देरी किस बात की? काँग्रेस कहती है ये बिल तो पहले हम लाए। आप लाए तो पास करने में और आसानी होनी चाहिए। दोनों मिल के क्रेडिट ले लो। लेकिन पास तो करो।



What is the GST Bill? What does it mean to you and me? The Good and Services tax in the biggest indirect tax reform since 1947 and it has potential to lead the economic integration of India.
This will be levied on manufacture sale and consumption of goods and services. ...... the GST bill will lead to the economic integration of India. ..... The main function of the GST is to transform India into a uniform market by breaking the current fiscal barrier between states. Thus the GST will facilitate a uniform tax levied on goods and services across the country. ..... Currently, the indirect tax system in India is complicated with overlapping taxes levied by the Centre and the State separately. ..... two components- the Central GST and the State GST. They will both have separate powers to legislate and administer their respective taxes. Thus equally empowering both. ....... Taxes such as excise duty, service, central sales tax, VAT ( value added tax), entry tax or octroi will all be subsumed by the GST under a single umbrella. ..... With passing of the GST bill, we can expect a climate of improved tax compliance...... Thus, the GST will basically have only three kinds of taxes, Central, State and another called the integrated GST to tackle inter-state transactions........ The first mention of the bill was in 2009 when the previous UPA government opened a discussion on it. ...... the current challenge facing the bill is that it needs two-third majority of both houses and 50 percent of the state assemblies will have to ratify it. ..... the GST will be instrumental in helping the GDP of India to grow by 2 percent. ......

The GST also offers a solution to the multinationals as it breaks down the indirect tax structure into one single tax payable by the companies.

Ten things to know about the GST Bill
The Bill seeks to shift the restriction on States for taxing the sale or purchase of goods to the supply of goods or services. ...... The GST Council will be the body that decides which taxes levied by the Centre, States and local bodies will go into the GST; which goods and services will be subjected to GST; and the basis and the rates at which GST will be applied. ......... The Centre will levy an additional one per cent tax on the supply of goods in the course of inter-State trade, which will go to the States for two years or till when the GST Council decides. ..... Parliament can decide on compensating States for up to a five-year period if States incur losses by implementation of GST.
GST will be cleared in 15 minutes if govt agrees to our terms, says Rahul
At the core of the dispute between the ruling party and the principal Opposition party is not just the demand for a constitutional cap on the GST median rate, as it is called, but also two other conditions put forward by the Congress.
“We don’t want a GST Bill where there is no cap on taxes. We want a limitation on the maximum tax people can be charged with.” ....... The Congress has demanded withdrawal of an additional one per cent tax on inter-state movement of goods, which has been proposed to provide comfort to manufacturing states that fear a loss of revenue. The party has also demanded a dispute resolution panel headed by a Supreme Court judge. ....... Stating that the GST legislation was conceptualised by his party, Rahul said: “For seven years, Jaitley didn’t allow it to pass. The current Prime Minister, when he was chief minister, too, didn’t allow it to pass. The BJP blocked everything. It has never been the strategy of the Congress to block Parliament.” .......

“This government doesn’t believe in a conversation”

, he said, adding that a compromise on GST was possible. “It is sitting on the table. But the government is not taking it,’ he said. He said that work is yet to begin on the necessary infrastructure that can make GST work. - ........ The Congress has hit back, pointing out that some of its concerns were reflected in the report of Chief Economic Advisor Arvind Subramanian on GST.

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Wednesday, December 23, 2015

ये क्या हो रहा है? American Style Gridlock?

ऐसे देश १०% तरफ नहीं जाएगी। जिस देशमें इनकम टैक्स ठोस नहीं है वहाँ सरलीकृत सेल्स टैक्स का होना बहुत जरुरी है। Informal sector को भी समेट लेती है।



Indian Politics Thwart Prime Minister Narendra Modi’s Tax-Reform Plans For the second time this year, India concludes its Parliament session without legislating a nationwide sales tax
Partisan bickering in India’s Parliament has stalled an important piece of Prime Minister Narendra Modi’s economic agenda: a constitutional amendment that would create a simplified nationwide tax system to replace a commerce-stifling patchwork of state levies. .... The winter session of India’s legislature ended Wednesday without a vote on the measure in the upper house, where Mr. Modi’s Bharatiya Janata Party is in the minority, after lawmakers spent weeks trading jabs over graft allegations involving top politicians. .....

“The economy suffers while politics overrides everything.”

..... Facing opposition protests and fearing a rural backlash ahead of the Bihar vote, Mr. Modi in August retreated from legislative efforts to ease India’s strict land-acquisition law and make it easier for the government to get land for industry and infrastructure. ..... The gridlock is the result, in part, of a tit-for-tat strategy by the main opposition Congress party, whose final years in power were marred by protests led by the BJP.

When Congress was in government, the BJP blocked tax legislation similar to what it is now trying to pass.

..... With major plans stymied in Parliament, Mr. Modi has sought to breathe life into the economy through executive actions and other moves, including a plan to revive heavily-indebted power-distribution companies and ease foreign-investment limits in some industries. .... Congress accused Mr. Modi of a political vendetta after the party’s president, Sonia Gandhi, and her son, Rahul, were summoned before a magistrate to answer a complaint alleging cheating and criminal breach of trust. ..... Emerging from court Saturday, Mr. Gandhi said Mr. Modi had encouraged “false allegations” to frighten political rivals. The government said it wasn’t involved in the case. The complaint was filed by politician Subramanian Swamy in 2012. He later joined the BJP. .....

‘Parliament has become a forum less for debate and more to settle political scores.’

—M.R. Madhavan, president of think tank PRS Legislative Research ...... A post on Mr. Kejriwal’s official Twitter account called Mr. Modi a “coward and a psychopath.” The episode spiraled to include corruption allegations by Mr. Kejriwal against BJP Finance Minister Arun Jaitley, who in turn filed a defamation suit against Mr. Kejriwal. ......

These much publicized spats narrowed the space for a political compromise needed to break the logjam on economic policy-making.

..... On the tax amendment, Congress has said it doesn’t support some key provisions. It argues the tax rate should be capped at 18%—and that number must be included explicitly in the constitution—to prevent a creeping increase by future governments...... It also wants to do away with a proposed 1% additional levy designed to help manufacturing states....... Mr. Jaitley said the government is willing to find ways to address Congress’s second demand, but won’t legislate the tax rate so future governments have flexibility.
Five Things to Know About India’s Proposed Goods and Services Tax
India’s government is attempting to reform its messy web of sales taxes to make doing business across the country easier. ........ This complicated web snarls companies in red tape and slows down the transit of goods around the country because of border checks and other official inspections. ...... replace the patchwork of taxes with a single, nationwide sales levy, known as the goods-and-services tax, or GST.

Economists call the move an epochal lowering of commercial barriers.

..... a broad GST would deliver an immediate boost to output of 1% to 2% and lasting gains to productivity. .....

The bill needs the consent of two-thirds of Parliament and half of India’s 29 states.

Finance Minister Arun Jaitley wants the new system up and running by April 2016, saying it will “play a transformative role in the way our economy functions.” .......

States with large manufacturing bases have been wary of the GST: Receipts from the new tax would go to states where goods and services are consumed, not where they are produced.

........ The Modi government in December agreed to compensate states for lost revenue during the levy’s first five years, and to let them continue taxing alcohol and petroleum separately. Some experts say these and other possible exemptions would curb the GST’s effectiveness, however. ...... Jaitley told lawmakers on Wednesday that the standardized national rate for GST would be “much more diluted” than the 27% estimated
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