The weather Gods have been unsmiling for a couple of years. . Droughts have been followed by deluges. Penury ravaged the agrarian community in India for two successive years and now deluge has engulfed the maximum cities of the country. Is it the wrath of Indra .......?
But in meantime the God of wealth , Kubera has smiled and has been extremely indulgent as the Monsoon session of the Parliament has engineered perhaps the biggest economic reform since 1991. One nation - one tax is the new economic mantra. The byzantine and labyrinths of indirect tax regimes would get simplified. Some goods and services may end up becoming dearer, others cheaper , but the jury is out that two path breaking changes would take place - a) number of indirect taxes would get reduced and b) the process of collection of indirect taxes would simply and the leakage of revenue would get plugged and it will add precious revenue to the states and central kitty.
In the year 2006, the then UPA government had planned to introduce Goods and Services Tax in the country. It found a place in the Finance Bill. For a variety of reasons, whether political or economic , it has taken ten long years for the baby steps to be taken to amend the Constitution of India( 122nd amendment ) .
Noted economist', Milton Friedman and an expert in the theory of monetary supply economics succinctly put it, 'Inflation is one form of taxation that can be imposed without legislation.' Hopefully the Goods and Services Tax Act will address the problem in the country by increased economic activity. Conservative estimates opine that the passage of the bill and its implementation itself would add to the GDP by around 2%.
Dr Montek Singh Ahluwalia displaying candor aptly pointed out that now the Finance Minister in his budget speech will not have to reel out modifications in the indirect tax regime to a plethora of items. It will simplify the contents of the budget speech many of which he would have drafted in the days spent at North Block.
Rajya Sabha on 3rd August 2016 witnessed a rare bonhomie among politicians and political parties across lines as the final tally was 203-0 in favor of the Goods and Services Tax bill. Politicians across the spectrum , save the All India Anna DMK supported the amendment. I reckon those differences too would be ironed out over a period of time. At one point in time VAT was bitterly opposed but today VAT and Mod VAT are an intrinsic part of our indirect taxation system.
The government of the day by lowering its rhetoric and pitch displayed remarkable sagacity by bringing all parties on the board and on the same page. The Prime Minister and the Finance Minister struck all right notes and chords as the bill was passed in the Rajya Sabha. However it is still a long haul. Woods are always dark and deep. The Intra - States GST, State GST and Central GST bills are yet to be passed . The GST council is still to be formed to look into the dispute readdress mechanism. Fifty percent of the state legislatures have to pass the bill among other things. And all this has been targeted by November during the Winter session of the Parliament for the enactment to roll out in April. Delhi winter is always chilly, but if current portents are any indication , Kubera will prevail over Indra once again.
The act may not be a panacea for all our problems. But as Victor Hugo said.' All the forces in the world are not so powerful as an idea whose time has come.' The time for GST has eventually arrived.
The minds of Indian Parliamentarians , political parties and bureaucrats after a long time were not resorting to scoring brownie points and in any fratricidal war . The minds were calm , peaceful and there was remarkable contentedness.
This momentous occasion contrasted with the recent Brexit by Great Britain ( once known as the nation of shopkeepers ) is quite telling. By exiting European Union , the pound took a pounding and artificial walls of movement in goods and services have been created. And the trigger was the negative sentiment of xenophobia and not sound economics and politics.
India with its pluralistic society and character should never fall in the trap of xenophobia and rigid nationalism. Positive emotions and sentiments are the cherished values of this land and so are the traditions of tolerance and acceptance. Rig Veda emphasized on positive thoughts to flow in from all directions. The concepts of compassion , tolerance and acceptance have been buttressed by Buddha ( perhaps the greatest psychologist ever ) and the Mahatma. Mara as always is lurking in the shadows but let peace prevail for the betterment of India and humanity.
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