✌✌✌✌ THE HINDU ✌✌✌✌
✌✌ A reform at risk ✌✌
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 for discretion and rent-seeking.
✌✌ Europe walks a tightrope ✌✌
raws to a close after Brexit in the U.K. and the election of Donald Trump in the U.S., it is tempting to label it the Year of Resurgent Nationalism. Yet in its dying gasp the global season of elections has produced two surprise results, in Austria and Italy, which give pause. Last weekend Austria rejected far-right candidate Norbert Hofer in its presidential election, instead placing confidence in Alexander Van der Bellen, a former leader of the Green Party who has said he would be an “open-minded, liberal-minded and above all a pro-European president.” In Italy a more mixed result was delivered, with voters resoundingly defeating a referendum driven by Prime Minister Matteo Renzi to change Italy’s constitution by reducing the numbers and power of the Senate. While some in Italy’s political right have seized upon the result as a big victory for anti-establishment forces, the vote defies the simplistic narrative of a “populist revolt against globalisation and elites” that has been applied elsewhere. It is evident that the focus of the vote was Mr. Renzi’s own record in office and the relative merits of the constitutional reforms he was proposing, which also explains why he resigned. The debates leading up to the vote, similarly, hardly touched upon burning issues such as immigration writ large in Britain or America. Instead they thrashed out questions on the potential of the reforms to be anti-democratic and capable of altering in-built constitutional checks and balances.
Despite the election outcomes in Europe being at odds with the broader global surge in pro-majoritarian national politics, there is one common thread that binds the two: a hatefully bitter polarisation of the electorate of each country. In Italy, while the opposition to Mr. Renzi’s plans came from mainstream political figures, including members of his Democratic Party, former prime ministers and academics and judges, the far right Northern League and the Five Star Movement left an indelible mark on the No campaign. These groups and their anti-immigrant rhetoric have thus received a boost. In Austria the flip side of Mr. Van der Bellen’s win was that Mr. Hofer’s Freedom Party managed to pull in some 2.2 million votes despite standing stoutly against the Social Democrats, the Popular Party and the Green Party, besides several among the establishment media. The fact that French far-right leader Marine Le Pen assured Mr. Hofer that he would win the next legislative election is a signal of confidence in the power of the rising anti-establishment mood. As the divide between “elites” and “the forgotten man and woman” widens, the need to rethink liberal politics has become imperative.
✌✌✌✌ THE ECONOMIC TIMES ✌✌✌✌
✌✌ Remove all hurdles to opening new accounts ✌✌
The poor are at the bottom of the food chain and lack, in general, the agency to even to obtain their legitimate due. Thus, if there are Indians who still do not possess a bank account or a phone, they would be the poor. They are the worst hit by demonetisation of Rs 500 and Rs 1,000 notes. Many of them still do not have a bank account. Most of those who do not have a bank account do not have Aadhaar. When the government now launches its campaign to boost digital payments, spare a thought for the poor and help them get Aadhaar, and with the use of Aadhaar, new bank accounts.
Banks refuse to open new accounts till the new year, on the ground that new Jan Dhan accounts are probably being opened to launder black money that belongs to someone other than the one opening the account. In any case, bank staff have their hands full, controlling queues and soaring tempers in the queue. But these are not good enough grounds to deny the poor what has now become a bare necessity in the absence of readily available cash. If they open a new account, they could make payments using debit cards or their phone whose number is linked to the bank account, using the electronic banking infrastructure put in place by the National Payments Corporation of India. Those without accounts must be encouraged and helped to open new accounts, at the earliest.
The government must mobilise its Aadhaar-issuing machinery to issue Aadhaar to anyone looking to get one. It must be included as part of its digital payments campaign. The banking regulator must give express instructions to all banks to open new accounts for all those who want one. Police stations must be asked to act on any complaint about a bank refusing to open an account for a poor person.
✌✌ A reform at risk ✌✌
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 for discretion and rent-seeking.
✌✌ Europe walks a tightrope ✌✌
raws to a close after Brexit in the U.K. and the election of Donald Trump in the U.S., it is tempting to label it the Year of Resurgent Nationalism. Yet in its dying gasp the global season of elections has produced two surprise results, in Austria and Italy, which give pause. Last weekend Austria rejected far-right candidate Norbert Hofer in its presidential election, instead placing confidence in Alexander Van der Bellen, a former leader of the Green Party who has said he would be an “open-minded, liberal-minded and above all a pro-European president.” In Italy a more mixed result was delivered, with voters resoundingly defeating a referendum driven by Prime Minister Matteo Renzi to change Italy’s constitution by reducing the numbers and power of the Senate. While some in Italy’s political right have seized upon the result as a big victory for anti-establishment forces, the vote defies the simplistic narrative of a “populist revolt against globalisation and elites” that has been applied elsewhere. It is evident that the focus of the vote was Mr. Renzi’s own record in office and the relative merits of the constitutional reforms he was proposing, which also explains why he resigned. The debates leading up to the vote, similarly, hardly touched upon burning issues such as immigration writ large in Britain or America. Instead they thrashed out questions on the potential of the reforms to be anti-democratic and capable of altering in-built constitutional checks and balances.
Despite the election outcomes in Europe being at odds with the broader global surge in pro-majoritarian national politics, there is one common thread that binds the two: a hatefully bitter polarisation of the electorate of each country. In Italy, while the opposition to Mr. Renzi’s plans came from mainstream political figures, including members of his Democratic Party, former prime ministers and academics and judges, the far right Northern League and the Five Star Movement left an indelible mark on the No campaign. These groups and their anti-immigrant rhetoric have thus received a boost. In Austria the flip side of Mr. Van der Bellen’s win was that Mr. Hofer’s Freedom Party managed to pull in some 2.2 million votes despite standing stoutly against the Social Democrats, the Popular Party and the Green Party, besides several among the establishment media. The fact that French far-right leader Marine Le Pen assured Mr. Hofer that he would win the next legislative election is a signal of confidence in the power of the rising anti-establishment mood. As the divide between “elites” and “the forgotten man and woman” widens, the need to rethink liberal politics has become imperative.
✌✌✌✌ THE ECONOMIC TIMES ✌✌✌✌
✌✌ Remove all hurdles to opening new accounts ✌✌
The poor are at the bottom of the food chain and lack, in general, the agency to even to obtain their legitimate due. Thus, if there are Indians who still do not possess a bank account or a phone, they would be the poor. They are the worst hit by demonetisation of Rs 500 and Rs 1,000 notes. Many of them still do not have a bank account. Most of those who do not have a bank account do not have Aadhaar. When the government now launches its campaign to boost digital payments, spare a thought for the poor and help them get Aadhaar, and with the use of Aadhaar, new bank accounts.
Banks refuse to open new accounts till the new year, on the ground that new Jan Dhan accounts are probably being opened to launder black money that belongs to someone other than the one opening the account. In any case, bank staff have their hands full, controlling queues and soaring tempers in the queue. But these are not good enough grounds to deny the poor what has now become a bare necessity in the absence of readily available cash. If they open a new account, they could make payments using debit cards or their phone whose number is linked to the bank account, using the electronic banking infrastructure put in place by the National Payments Corporation of India. Those without accounts must be encouraged and helped to open new accounts, at the earliest.
The government must mobilise its Aadhaar-issuing machinery to issue Aadhaar to anyone looking to get one. It must be included as part of its digital payments campaign. The banking regulator must give express instructions to all banks to open new accounts for all those who want one. Police stations must be asked to act on any complaint about a bank refusing to open an account for a poor person.
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