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GST – Government must ensure the benefits are passed to consumers

shshanksaurav
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GST – Government must ensure the benefits are passed to consumers

3rd August 2016 became a historic day for economic reforms when Rajya Sabha passed the constitutional amendment bill to GST and paved the way for major taxation reforms. Almost all the political parties have broadly agreed on the concept of Goods and Service Tax (GST) and it is expected to become a reality from the next fiscal year. Initial target of introduction of this ambitious legislation was set for April 2010 and now it may see light of the day after 7 years, all thanks to our political maturity.

Finance ministry has released the draft GST law on 16th June and concerns have been raised on some provisions which is likely to be addressed by the ministry before this law is enacted. I have tried to highlight the key benefits which this legislation is expected to bring and the requirement of a vigil mechanism to ensure that the benefits are passed on to consumers also.

Benefits which are expected from GST

1. Central and state taxes will be subsumed after introduction of GST and will bring uniformity in indirect taxation across the country.

2. Seamless credit of taxes paid in the entire supply chain will be available to producer of goods or provider of services in which will eliminate the cascading effect of taxes on inputs and therefore price of products is expected to reduce.

3. Compliance burden will be reduced in the long run as there will be one platform for filing of returns, payment of taxes and assessments.

4. Tax evasion will be easy to trace as all the records will be uploaded on single platform and thus cross verification of purchase claimed by one dealer Vs sale declared by other dealer will be easy to corroborate. This will increase transparency and will check the black money circuit.

5. Reduced costs to manufacturers will increase the competitiveness of our products in export market.

Precautions need to be taken before GST is implemented

The report submitted by the committee headed by Dr. Arvind Subramanian suggested a standard rate of 16.9-18.9% for GST and the final rate is expected to be ~18%. Currently tax on goods is approximately 25% (Excise plus Sales Tax) while services are taxed @15% and accordingly services are expected to be costlier under GST regime. However cost goods is expected to be lower due to reduction in tax. Government should ensure that this reduced cost is passed on to the consumers and businessmen don’t indulge in profiteering.

Analysis of the impact of GST in countries like Australia, New Zealand, Singapore, United Kingdom etc. shows that implementation of GST will increase the inflation in medium term. In India, tax on services will increase therefore it becomes necessary for the government to ensure that benefit of reduced tax on goods is passed to consumers. Table 1 given below shows a trend in CPI after implementation of GST in some economies.

CPI Trend
CPI Trend

India is a free market economy and government intervention is not necessary in normal scenario to regulate the prices but taking a clue on inflationary impact of introduction of GST in other economies and expected increase in price of services, the government should setup a mechanism to check profiteering, otherwise this new legislation will come as a double whammy for the common man. Global experience shows that whenever there is an upward revision in taxes, business houses pass it disproportionately to the consumers but only a part of the benefit was passed on when tax rates were reduced (refer Table 2).

Pass through trend

Pass through trend

GST was introduced in Malaysia from April 2015 and The Ministry of Domestic Trade, Co-operatives and Consumerism (MDTCC) urged the business owners to adjust their pricing of goods and services and pass on the benefits to consumers. The ministry announced that investigations will be carried out for anti-profiteering checks as per their law to ensure the fairness. Similarly when GST was introduced in Australian the government also setup a commission to monitor the prices and protecting the interest of consumers.

GST will create a common market in India for goods and services but considering the vast geography of our country, prices of goods/services will not be similar at different locations. This will be on account of difference in direct cost (e.g. labour etc.) and overhead costs (e.g. transportation, warehousing etc.) at different locations which add to the total cost of goods/services and therefore state-wise review and monitoring should be done for price effects post implementation of GST. Central Government can consider the following to regulate and monitor profiteering-

1. Sector-wise and commodity wise data should be monitored for various locations or states. It will provide the details needed to assess ground reality.

2. Monitor the price change after implementation of GST. Retail price of the goods should be compared to check whether the ultimate consumer is getting the benefits.

3. Carryout the pass-through test (i.e. net profit margin analysis). Information from the published quarterly results of various companies across all industries can be taken for this purpose to verify that the net profit margin as percentage of sales or cost has not increased due to change in tax.

4. Quantum of pass-through may not be equivalent to the decrease in tax but it should not be the case that the overall tax amount is reduced but the price of the goods remain unchanged. During the transition phase there should be signs which show that the benefit of reduced tax incidence has been passed on to the consumers. In the long run, price levels will automatically become market driven.

5. Though CPI index provides a visibility about the price change but analysis of CPI index alone will not give the true picture after GST implementation. This is because weightage of services are low in the CPI basket and even a higher price increase for services will push the CPI by relatively lower proportion. Therefore head-wise price movement should be monitored in the transition phase and more attention should be given to those items which are of daily use.

6. GST implementation will take time even if it is passed by Parliament and enforcement agencies should ensure that business men don’t increase the price in advance in anticipation of GST implementation because once the price is increased and accepted by the market it becomes a benchmark for the seller.

 

By: – Shshank Saurav (Chartered Accountant and Anti-Money Laundering Specialist)

 

The time is right for Uttar Pradesh to be divided into smaller states

Gaurav Sansanwal
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The time is right for Uttar Pradesh to be divided into smaller states

Fertile land, productive terrain, natural water resources, large consumer base, political clout, rich culture, and an authoritative presence, in books of history- Uttar Pradesh (UP) has everything, that an administrative unit needs, to write its growth story. And yet, it continues to fall short of its development potential. If it were a separate country, UP would be the fifth most populous in the world. And yet, nowhere have the dividends from our demography been as low, as in UP. This points to a fundamental flaw in the state’s governance architecture.

Low economic development, and disappointing social indicators

According to the Ministry of Statistics and Programme Implementation, the per-capita Gross State Domestic Product (GSDP) of UP, is the second lowest, among all states and Union Territories of India. [1] Its growth rate is no better. At constant prices (2004-05), UP once again hits the rock bottom of the list, with a dismal 4.95% state-level growth rate. [2]

Source: statisticstimes.com

It comes as no surprise then, that its performance in social development indicators, is equally disappointing. Poverty alleviation statistics are a fine indicator of the success of long-term development, and UP’s failure in reflecting progress must be noted. According to a study by Reserve Bank of India (2013), with a total of 29.43% poor (BPL estimates), UP sits at the 20th position overall, way below the All India average of 21.92% (based on MRP consumption). [3]Niti Aayog’s estimates (given in the latest Economic Survey, tabled before the Parliament) tell the same story. The percentage of population, living Below Poverty Line, is estimated somewhere between 30-40 percent.[4]

The disappointing story continues. According to Census (2011), only 27.3% people have access to tap water, and a dismal 35.7% have access to toilets, both well below the national average of 43.5%, and 46.9% respectively.[5] On most other indicators, UP’s performance remains way below the national average.

The administrative challenge of governance

The administrative challenge of governing a state as big as UP, cannot be over-stated. With 18 Administrative Divisions, 75 districts, and more than one lakh villages, Uttar Pradesh holds the distinction of being the largest state, in any country of the world. By contrast, Bihar has 9 divisions, Maharashtra- 6, Assam-5, and smaller ones like Uttarakhand, and Haryana, have 2, and 4 divisions, respectively.

Delivery of governance happens through institutions of democracy, most of which run from the state capital. Travelling over 600 kilometres, to reach the state capital, makes no sense. It alienates the people from those governing them, and vice versa.

Capitals also have a ripple effect on the state economy. They constitute the definition of ‘good life’ in any state, and give its aspirational middle class, reasons to dream. As they expand, new centres develop, and efforts are made to connect far-flung areas to them. This, over a period of time, leads to widespread urbanization. Urban areas give people a better standard of living, and diversify the economy of the state across the three sectors, putting it on the path of all-round development. More states will translate into more capitals, which may all become centres of development, and lead to the revival of ancient cities like Varanasi, and Allahabad.

The dismal state of UP’s industrial centres

Despite of all odds, Uttar Pradesh has given to India- many industrial centres, some would argue. Firozabad is known for glass and bangle works; Varanasi for Handloom; Moradabad for Handicrafts; Kanpur for leather, an impressive Noida for IT, and so on. But the reality is that the state has failed to bring its traditional craftsmanship into the 21st century, and has lost its dominant industrial position, to other (smaller) states. Take Kanpur, for example. During the times of British Raj, it was known as the ‘Manchester of the East’. Those booming cotton mills, are now a thing of the past.[6] It comes as no surprise, that while India is doing all it can to revive its nearly extinct labour-intensive textile sector, countries like Vietnam, and Bangladesh have leaped on to the opportunity, and established themselves as the dominant players in this sector.

Determining the potential of a state

It is important to understand the potential of a state, when making state-wide comparisons. Many states in India are battling Left Wing Extremism, and Insurgency. Some others do not have the requisite political clout, and hence lose out on necessary attention, and revenues. Others cite lack of resources, and difficult, unproductive terrain as possible reasons for lack of social development, and economic growth. Uttar Pradesh qualifies under no such excuse, and that strengthens the case of its division.

Ambedkar’s three-state plan

(Source: ‘Thoughts on Linguistic States’, Dr. Bhimrao Ambedkar)

In his book, ‘Thoughts on Linguistic States’ (Bhashayi Rajya), Babasaheb Amebdkar highlighted the ungovernable character of Uttar Pradesh, and suggested:

“My proposal with regard to the Uttar Pradesh is to divide it into three States. Each of these three States should have a population of approximately two crores which should be regarded as the standard size of population for a State to administer effectively. Where the boundary lines of these three States should be drawn, I have shown in the accompanying map.
The three States of Uttar Pradesh could have as their capitals (1) Meerut (2) Cawnpore (now Kanpur) and (3) Allahabad. They are situated quite in the centre of each of these three States.”[7]


The four-state formula:

Culturally, geographically, administratively, and politically, it makes most amount of sense to divide the state into four parts. The formula was last given some political value by Mayawati, in the run-up to the 2012 state elections. The 75 districts of Uttar Pradesh, can be divided across four states:

  1. Western Uttar Pradesh (Harit Pradesh)-  comprising the areas of Upper Doab, Middle Doab and Rohilkhand regions;
  2. Central Uttar Pradesh (Awadh Pradesh)- comprising the areas of Awadh and Lower Doab;
  3. Eastern Uttar Pradesh (Purvanchal);and,
  4. Southern Uttar Pradesh (Bundelkhand).

This widely discussed formula, is the most ‘natural’ division possible; for it represents a sense of geographical contiguity, and cultural distinctiveness, which is hard to ignore.

Small States: The experience so far

Making small states, is not enough. Good, and stable leadership is essential to consolidate the gains, that such states are capable of producing. It is no surprise that Madhya Pradesh prospered over a period of time, after Chhatisgarh was carved out. The track record of Jharkhand is not equally convincing. Even so, the apparent under-performance of any state should not be seen as a failure of the ‘small state’ policy. If anything, a case should be made out of it, for strong and able leadership- the kind that Jharkhand has failed to produce, so far.

Another point to remember is that a decade and half, is not enough time to judge the impact. A good comparison can be made with, Maharashtra-Gujarat, or Punjab-Haryana, which were divided in 1960, and 1966, respectively. A comparison with these states also makes more sense because Uttar Pradesh, as argued previously, does not deal with day-to day insurgency that states like Jharkhand and Chhatisgarh face. The two account for nearly two-thirds of all the insurgency, prevalent in the country. A comparison with them is unfair, when discussing the merits of UP’s division.

That targeted governance fuels equitable growth, is a fact no one can ignore. Once divided, each consequent state of present-day Uttar Pradesh will be made answerable to its own citizens. The resources of Bundelkhand will, for instance, belong solely to Bundelkhand, and to no one else. Additional revenue support can be provided by the Centre, as and when it is needed, till the time the state finally becomes self-reliant.

Time to let go off the Nehruvian politics of division

The Congress party, post the division of Andhra Pradesh, has once again revived the old-age Nehruvian politics of dividing states, only when people’s movements are built around the said demand. Such a vision harms the cause of decentralised administrative governance. The argument that a division will lead to weakening of India’s unity, and integrity, does not apply; for it only carries some merit in states where secessionist movements are present. The ruling Bharatiya Janata Party (BJP), therefore, need not wait for a people’s movement to emerge.

BJP will be the biggest gainer; others will find it difficult to oppose the plan

Given that Mayawati advocated it in the last election, she will find it difficult to justify her opposition to a division. Samajwadi Party, which will be facing anti-incumbency, may find it tempting to have not one, but four shots at power. The smaller parties will be definitely on board; for they will see in division, the opportunity to hold greater sway, in a smaller state.

The biggest gainer will, however, be BJP itself. It can keep the dilemma of choosing a Chief Ministerial face aside, and go with not one, but four of them. Given the varied electoral arithmetic of the four regions, such a plan will help its electioneering. By making the division, the talking point, it can drive home the promise of development, even as it attacks the law and order failures of the Akhilesh-government, and benefits from the consequent identity politics. It should fight the election on the plank of division, win popular support, and then preside over it, only to initiate the process of division, by passing a Resolution in the Assembly.

There are two kinds of states. One, states which celebrate the size of their demography. The second category is of states that take pride in the rich dividends that their demography produces, no matter what its size may be. It is time, for Uttar Pradesh to bite the bullet, and be the one- that is known for realising the true potential of its demographic dividend.

[1] http://statisticstimes.com/economy/gdp-capita-of-indian-states.php

[2] http://statisticstimes.com/economy/gdp-growth-of-indian-states.php

[3] https://www.rbi.org.in/scripts/PublicationsView.aspx?id=15283

[4] http://indiabudget.nic.in/es2015-16/echapter-vol2.pdf

[5] http://indiabudget.nic.in/es2015-16/echapter-vol2.pdf

[6] http://www.newsgram.com/why-this-indian-town-once-known-as-manchester-of-east-is-struggling-hard-to-find-its-relevance/

[7] https://www.scribd.com/doc/6841324/THOUGHTS-ON-LINGUISTIC-STATES-B-R-AMBEDKAR (Comment, on pg. 20; Map, on pg. 49)

Congress brings back Soft Hindutva

Ullas
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Congress brings back Soft Hindutva

Many intellectuals had analyzed that one of the main reason for PM Modi’s win in 2014 was due to the Hindutva factor. They may well be correct. Rather, they assume that they are correct. Because, if other factors are analysed, it is difficult for the Congress or its partners to initiate corrective measures. With the Uttar Pradesh elections on the horizon, it seems that the Congress has bought this argument fed to them by these intellectuals.

So, project “soft hindutva” is back on track – lest, Congress will end up fighting for the minority votes and being one of the many parties vying for the same. Congress is no stranger to Soft-Hindutva. In fact, Congress was the first party to ban cow slaughter in 1955. It is a different matter altogether that they are now busy appeasing the minority vote-bank.

Here are some of the decisions taken recently by the Congress, that incontrovertibly proves that they are bringing back Soft-Hindutva.

Rahul Gandhi’s visit to Kedarnath Shrine
To be fair to Congress, Rahul had diagnosed the vote erosion among the electorate before Prashant Kishore joined him. It is no coincidence that Rahul undertook a yatra to Kedarnath Shrine on foot in 2015. No wonder he felt a “fire-like” energy when he visited the temple. His quote: “Aam taur par Mandir mein jata hun to mangata nahin hun. Main andar gaya, aag jaisi shakti mili“. Having seen Rahul on TV over the years, I am pretty sure he could not come up with this. Well, the first steps towards “soft hindutva” were taken. This also is a marked departure from his statement in 2014 saying: people who go to temples, molest women.

“Brahmin” Sheila Dixit’s anointment as UP CM candidate
A beneficiary of the 2014 election results was one Prashant Kishore. His words are now sacrosanct in the Congress. So, now the perennially minority appeasing Congress, has been convinced to name a Brahmin daughter-in-law – Sheila Dixit – as it’s CM candidate. The key word: Brahmin. If UP still votes on religion/caste basis, BJP must expect some erosion of its votes.

No pundit worth his salt, gives a chance for Congress to win UP elections. This means Mrs Dixit will not be the next UP CM, come hell or high water. The arithmetic is simple. SP retains the Muslim-Yadav combine. BSP gets its share of Dalit votes. The remaining Hindu-OBC-Dalit Modi coalition needs to be broken, so that another Mahagathbandhan can be formed, on the lines of Bihar model. Meanwhile, enjoy the silence of liberal intellectuals, who do not question Congress on why a muslim or dalit was not named a CM candidate by Congress.

For now, BJP seems to be obliging the strategy by neither naming a CM candidate nor talking decisively on the Ram Mandir issue. With the recent verbal diarrhoea between BJP and BSP leaders and workers, chances of a post-poll coalition between these parties also appears slim. So, unless Amit Shah smells the tea leaves, get ready for Maya-Akhilesh-Rahul coalition.

Raking up Dalit issues
It must be said that the atrocities on Dalits need to be condemned, without reservation.

PM Modi has diligently worked towards the dalit cause since he assumed office. Be it the #StandUpIndia initiative or his participation in the DICCI (Dalit Industrial Chambers of Commerce and Industry) event or the MUDRA scheme or the buying of the house where Ambedkar stayed in London for Rs 40Cr. He has been relentless. OpIndia’s related piece on Dalit politics can be read here.

In the recent months, atrocities on Dalits is getting lot of mainstream media coverage. However, the nuance isn’t lost among the voters. There is a definite plan to divide the Hindu-Dalit-OBC coalition that Modi built during 2014. Raking up every dalit issue in the parliament and linking it with the central government has become a trend. Also, some of the comments from the political parties have explicitly tried to blame Hindutva (and/or RSS) as the perpetrators of the crimes against Dalits. Update: Investigations are still ongoing, much like they were on going during the peak of the “Christians under attack” routine, which was later exposed.

Recent incident at Una in Gujarat is another notable marker. Who is backing them against the BJP? Of course, one of Congress’ primary vote-bank –  Jamiat-e-Ulema-Hind. Of course, the abetters in the media are happy to play along.

Sonia’s visit to Varanasi
One thing I will ever be thankful to Modi was, breaking the unwritten code or Omerta of not campaigning in other party’s bigwigs’ constituencies, by going to Amethi. That he did not campaign in Rae Bareli still hurts. Nevertheless, now we have Sonia visiting Varanasi. Before she cut short her trip due to illness, she was planning to visit the Kashi Vishwanath Temple for the Aarti. This alone calls for a “Har-Har-Mahadev”. Who says Achche Din aren’t here?

I am pretty sure, a has-been anchor who desperately lobbies for an opportunity to be invited on Newshour debates on Times Now, would not have requested Sonia to visit the Gyanvapi Mosque. After all, mission “soft hindutva” cannot be polluted with small things like secularism.


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For 10 years of UPA rule, and for period long before, Iftar parties were the norm at Lutyens. No one accounted for how the taxpayers money was wasted on such social gatherings. In 2016, for the first time, UP Congress did not organize its own Iftar party for its primary vote bank. Sonia too did her bit by not hosting one in Delhi – apparently, she remembered the poor to whom the ration was distributed. Did someone say “soft hindutva”?

All you need to know about GST

Gaurav
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Inception

It all started in the year 2000 when then Prime Minister Atal Bihari Vajpayee set up a committee which was mandated with facilitating the states to switch from sales tax to the value-added tax (VAT) regime. On April 1, 2005, state-level VAT replaced sales tax in many states. Subsequently, the committee was mandated with facilitating states to switch to Goods & Service Tax (GST), in consultation with the Centre. GST works on the exact same principles as VAT, hence in many countries it is in fact called VAT. Under the UPA, successive finance ministers promised GST in successive years, with the deadline being extended year on year without any headway.

Why the delay for so many years?

GST is a tax which subsumes many state and central taxes. In effect, it reduces the power of states to tax their citizens. Hence it was essential that all the states and the centre were on the same page at every stage of the GST Act. This did not happen during the UPA rule. Expectedly, states were worried that they would lose a big pie of their revenue by getting into GST.

Even till the fag end of 2013, nearing the end of UPA’s tenure, along with BJP states, few Congress states and few other states with Non-Congress Non-BJP Governments, were opposed to certain provisions in the UPA’s version of GST. Till the last discussion of GST under UPA in November 2013, the states had some major demands:

1. Keeping Petroleum out of GST ambit
2. Keeping Alcohol out of GST ambit
3. Keeping Entry Tax out of GST ambit
4. Some sort of guarantee from Centre for potential revenue loss

The UPA could not negotiate with the states on the above demands and hence even after being 10 years in power, GST could not be brought under the UPA rule.

What changed?

The new BJP Government was desperate to get GST rolled out as soon as possible. So, it decided to accept some of the states demands, and give them some comfort, so that they can agree with the centre at other places. Out of the above 4 demands, 3 were accepted, and a bonus benefit was passed on to the state:

1. Petroleum was kept out of GST
2. Alcohol was kept out of GST
3. A proposal was sent to law ministry to work out a “Constitutional Guarantee” to compensate states
4. And the Bonus: The power to states of levying additional 1% tax levy, for maximum 2 years, to help augment state revenues

In exchange for this, the Centre convinced the states to allow Entry Tax to be subsumed into the GST ambit. All this was achieved some time in late 2014, barely 6 months into the tenure of the new Government.

Why the delay now?

With the states on board, the GST bill was passed in the Lok Sabha, where BJP had an absolute majority, in May 2015 itself. At that stage Congress walked out of the house before voting, demanding that the Bill be sent to the standing committee.

Later, although Congress states were on board, the Central leaders of Congress came up with new demands for GST, among which were the demand to scrap the additional 1% tax levy, and to peg the GST rate at 18%, that too in the Constitution Amendment Bill. Next, the bill had to be passed by a two-thirds majority in the Rajya Sabha, where the BJP did not have the numbers.

What has changed now?

For one, the composition of the Rajya Sabha has slightly changed, with BJP having more seats than before. Further, on negotiations with states, it seems the Centre has accepted some of Congress’s demands. It is expected that the 1% additional levy will go, but the 18% cap in the bill itself may not be accepted. Despite this, it appears Congress will back GST.

Why is BJP hurrying with GST so much?

Right from day one, the new BJP Government has shown a lot of intent in getting GST cleared as soon as possible. There maybe 2 reasons for this. GST will be the biggest Indirect Tax Reform since Independence. With so many taxes getting subsumed, doing business in India will become easier. The Government has set itself extremely ambitious targets of moving up in the World Bank’s Ease of Doing Business Rankings, and GST is expected to help in that direction.

Secondly, although GST will bring a lot of cheer for organised industries, it will, in the short run, be a disruptor for the unorganised sector. The GST implementation mechanism is largely network and computer based, and is targetted at minimising tax evasion. This will have a direct impact on all the traders and businessmen who have been avoiding taxes by hook or by crook. Bringing this section into the tax net will definitely harm the political support being received from them, and BJP is traditionally seen as being backed by traders and businessmen. Hence, it would make sense to get GST rolled out much before the 2019 Lok Sabha, so that whatever negativity arising from it, is diluted.

What will change under GST?

Think of it as a super-all-inclusive tax, which will eliminate most other Indirect taxes. Its aim is to standardise taxation across the country and remove cascading effect of taxes i.e. Tax on tax egs: VAT is charged on Excise too. GST is already in place in over 160 countries world wide, so India is late to the party. Experts say, GST could increase GDP by 1-2% and reduce costs of inputs by around 10%.

Untitled
taxes to be subsumed

With this, compliance will ease out, free flow of goods over state boundaries will increase. Credits for inputs will be more easily available, paving the way for reduction in costs. A common national market will emerge, where in less developed, but consumer driven states will benefit. Make in India will get a huge push, as also Ease of Doing Business.

So are we set? All is well?

Legally, we still have to wait for the Rajya Sabha to pass the GST Constitution  Amendment Bill, and at least half of the state assemblies will have to pass for the Constitution Amendments. The model GST Act will have to be finalised, along with the allied laws and rules.  Lok Sabha and Rajya Sabha have to pass the GST Bill (which is not the same as Constitution Amendment Bill) and the states have to pass their own GST bills. All of this needs to be done before April 2017 if we are looking at 1st April 2017 as the date for roll-out.

Successful implementation of GST will almost entirely depend on a robust IT system. As per reports, the IT network is ready and undergoing testing. But the proof of the pudding is in the eating and we will have to see how one single system can take the load of assessees from Excise, Service Tax, Sales Tax etc.

The current GST is an improvement over the current scenario but it is not perfect. We still wont see a 100% free flow of credits due to the Dual-GST structure. Further, all goods need to be brought under GST, to reap full benefits, and one expects that after GST rolls out and stabilises, states will agree to bring in goods like Alcohol and Petrol.

The biggest question is obviously the rate of GST. While an average manufacturer pays a combined rate of 25-27% on goods, a Service provider pays only 15%, which itself seems high. Getting the rate right would be crucial, to avoid loss of revenue, as well as to avoid burden on consumers. Whatever the rate might be, there will be different rates for different classes of goods and services, hence the impact will be spread out:

1. Merit rate for essential goods and services
2. Standard rate for goods and services in general
3. Special rate for precious metals
4. NIL rate for certain goods and services
5. Floor rate with a small band of rates for standard rated goods or services

In the end, we must realise that although GST is a huge reform, the current version is an incremental reform, which shows us the path to the ultimate destination of having a perfect GST. It is hard to say whether Indian can achieve a perfect GST, given the inherent complexities of our structure, but going forward we must hope that we move closer and closer to the target.

New narrative is being shaped up as Uttar Pradesh elections are nearing

Prashant
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New narrative is being shaped up as Uttar Pradesh elections are nearing

Ray Bradbury, the famous American novelist, once said “I was not predicting the future, I was trying to prevent it”. Closer to home in India, driven by the hate for the man who broke Delhi’s Omerta code, media shops have taken this Bradbury maxim quite literally.

Traumatized with Modi’s astounding victory in the 2014 general elections and wounded further by the assembly results in Maharashtra and Haryana, where BJP tasted unprecedented success propelled by Modi Tsunami, media shops learned a key lesson nonetheless. The lesson was that if BJP was allowed to set the agenda (usually a potent mix of development and cultural nationalism) with the main opposition merely either trying to catch up or negate it, BJP will be unassailable. The media shops quickly recognised that an  agenda like this transcends all socio-economic barriers, appealing to a  much wider voter base. More importantly, it transforms the profile of a voter. A caste conscious voter becomes an aspirational voter.  Such a change causes a wide disruption on a predictable political canvass since pressure groups, nurtured for years by establishment forces to control social bases, cannot deliver anymore. They do not have the answers  sought by this new voter base looking beyond their immediate identity. A simple idea when associated with a doer like Narendra Modi could yield rich dividends.

Having decoded the success of BJP, the media shops along with their masters and sympathisers converged to devise strategies to arrest this growing tide of BJP.  Consequently, they concluded that the following must be done a) find ways to dismember the BJP´s new avatar as a development party, pinning it back as a Hindu party b) instead of viewing BJP´s victory as one big behemoth event, break it down to the incremental voters it added in the 2014 election in each state and try to wean them away c) change the political narrative for egs. development, clean government, etc where the BJP has somewhat good track record to showcase and replace it with a narrative where the BJP could be targeted much more easily d) strike like a guerrilla i.e. swoop down from all sides and then disappear quickly, leaving the BJP puzzled whom to respond.

The benefits of this strategy were obvious; if implemented correctly, this could arrest the tectonic but so far only temporal shift of voters from identity based to development based politics, sap the BJP’s positive momentum generated by victory in 2014 and help escape the wrath of government in any one particular direction enabling them to live to fight another day (read election).

First it started with Delhi, petty news of theft in Churches were given wide coverage, creating a perception that Christians are under siege in the National capital. In no time, a non issue became a matter of life and death in the TV studios of media shops for every secularist worth his/her salt –  in a classical case of agenda setting. Overnight, BJP was bracketed as a communal party for no rhyme or reason. A political “hawa” was created by journalists, some of whom who were recently exposed, by fanning fires over Ghar Wapsi which involved a bunch of fanatics who had nothing to do with the BJP whatsoever. Result? A strong consolidation of minorities, particularly Muslims and Sikhs behind AAP. The entire narrative was shifted largely from development to secularism and somewhat to AAP´s freebies, whose morality in a free economy and need basis in a reasonably wealthy state like Delhi escaped any scrutiny. Moreover, media shops completely suppressed the massive infighting going in AAP (which came to fore almost immediately after the Delhi elections) in order to not weaken the crusader of their choice i.e Kejriwal. 

The strategy succeeded with AAP getting a massive mandate and media shops, their sweet revenge. The liberal troops were ordered back to barracks and no one heard a whimper over attacks on Christians thereafter. Suddenly, everyone was safe under the same dispensation and same police.

Predictably, the Delhi results emboldened the media shops and the next stage was set in Bihar. Earlier during the general elections, the BJP had made big strides in Bihar owing to the incremental vote from a large section of EBC as well Yadav voters i.e traditional voters of Nitish and Lalu. If Bihar was to be redeemed, then this vote base must be snatched back from the BJP. Therefore, as the Bihar elections approached besides usual secular rhetoric over Dadri beef tragedy and Award Wapsi, a narrative was spun portraying the BJP as anti-poor and anti-reservation. Media shops cleverly primed the voters by fronting Lalu as a champion of the downtrodden while projecting Nitish as the face of development pandering to the urban voters. One obscure statement after the other from Lalu and people close to him about how BJP was planning to get rid of reservations was pitched systematically as the election campaign proceeded, lending a sense of credibility to this utter falsehood.

BJP was found licking its wound and by the time it could get itself sorted out, the narrative has already changed from Vikaaswaad to Jaatiwaad. It was left defending reservation on one hand and disowning Dadri incident on the other. Consequence? Incremental voters that came with NDA forces during 2014 deserted it and along with Muslims, consolidated behind Lalu and Nitish, who were effectively projected as their messiahs.

The world has neither heard a whisper ever since about BJP´s plan to get rid of reservation nor about the Award Wapsi gang, who seem to be happy again with how things are in India, that is until the next elections. Perception won, reality lost.

Two out of two, media shops have now trained their eyes now on Uttar Pradesh. The strategy has been activated; scare away the incremental voters i.e. Dalits, change the narrative and frustrate BJP´s plans to build a grand coalition of castes and ability to set UP´s election agenda. When the time is ripe, other forces will be unleashed too. We should just get prepared for a huge propaganda onslaught.

Indeed, when every report becomes report worthy just because media shops can bring in the Dalit identity, then make no mistake that elections in UP are just round the corner!

Anti-Modi cop Sanjiv Bhatt caught spreading Anti-India propaganda on Twitter

OpIndia Staff
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Anti-Modi cop Sanjiv Bhatt caught spreading Anti-India propaganda on Twitter

Sanjiv Bhatt, the controversial IPS officer of Gujarat who made damaging but untenable accusations against the then Chief Minister Narendra Modi, is now reduced to making damaging and downright false allegations against the security forces in Kashmir.

On Sunday, Bhatt tweeted the following picture from Kashmir claiming that it showed a local child aiming a slingshot to attack a policeman:

Screenshot of the tweet that Sanjiv Bhatt posted at 8:17 PM on 31 Jul 2016
Screenshot of the tweet that Sanjiv Bhatt posted at 8:17 PM on 31 Jul 2016

The picture was soon shared by thousands of people, many of them being Pakistanis, who showcased it as a “proof” of how India was illegally “occupying” Kashmir and that even a child hated the Indian security forces.

The picture was remarkably similar to many other viral images that often show a Palestinian child at odds with Israeli soldiers, and thus it was a goldmine for propagandists who equate India with Israel and exhort people to join Jihad against India.

And such propaganda was enabled by Sanjiv Bhatt because he made a sinister and false claim about the picture. It painted the Indian security forces as heartless beasts who are hated even by a child.

Within a couple of hours of the discredited cop posting the picture, many Twitter users pointed out that he was spreading false information, because the child was not aiming at the policemen, but playing with them:


Another picture of the same child smiling and sitting at ease behind a policeman can be seen here.

So a playful gesture from a Kashmiri child was presented as proof of state failure by Sanjiv Bhatt. What was more shocking is that despite his lie being called out, Bhatt didn’t bother to delete his tweet, which continued to be shared by anti-India propagandists.

Realizing that it could hurt India’s image, senior journalist and editor of ANI news agency Smita Prakash earlier today asked Sanjiv Bhatt to delete his tweet:


The suspended police officer had not removed the picture or tweeted any clarification till the time of filing this report. The tragedy is that even if he were to delete his tweet now – more than 24 hours after he posted it – the picture has now been spread at many places by miscreants to be used for anti-India and anti-Army propaganda.

Looks like Hafiz Saeed will next praise Sanjiv Bhatt for his “good work”.

Meenakshi Lekhi, BJP supporters and how not to react on social media

Editorial Desk
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Meenakshi Lekhi, BJP supporters and how not to react on social media

A few days back, BJP MP Meenakshi Lekhi, lost her cool on Twitter. No, it was not due to some Congress trolls abusing her. Nor was it because some media house had published a hit-job on her. It was because a few BJP supporters questioned her.

It all started when the MP posted this picture from her Twitter account:


It was obviously a matter of pride and honour to be called as a guest at a function organised by our ex-army men. But there was one thing, or rather one person in the picture which perturbed her fans. Controversial journalist from NDTV, Barkha Dutt was also present in the pictures.

Besides beingone of the reasons for lowering Indian media’s credibility, Barkha Dutt was in the crosshairs of many nationalists because of her latest sympathetic utterances towards slayed terrorist Burhan Wani. This was further heightened after Arnab Goswami mercilessly exposed her, without of course naming her. To add this, such a  personality coming to a function related to the armed forces was the last straw. In such a situation many people felt that Lekhi’s presence along with Barkha was untenable.

The natural, and initial assumption of social media users was that it was a program organised by MP Lekhi or the BJP, in which Barkha too was invited. This led to a barrage of tweets questioning Lekhi as to why she was giving importance to such a persona-non-grata at such an event. Some of the messages could have also been insulting to the MP.

Lekhi’s response to the outrage was astonishing. She started off by calling one of her party’s supporters an “idiot”. Another self avowed BJP voter was called a “Kejri supporter”. Then she proceeded to retweet troll tweets, such as images of PM Modi with Barkha and other unwanted people. Some people were called “lobbyists”. Another was likened to Ravana.

In all of the above, the main point, which was also stated, got completely drowned out. The event was apparently not organised by the MP. It was an event of South MCD, the elected councillor of the area was a Congressman and the area was part of Lekhi’s constituency. The MP did clarify this at multiple points, but these clarifications were interspersed with her rude replies to tweets, some of which may have been rude themselves.

Both sides erred in this episode. Social media supporters of BJP and Lekhi erred, in assuming that it was a BJP event. It was a natural misunderstanding which could have been resolved calmly and peacefully. The MP could have abstained from making abusive tweets and stuck to the point: Barkha was not invited by her. An MP should not abuse any person, especially not your own supporters.

Elected representatives to the Lok Sabha, and especially first-timers, should realise that they owe a large part, if not all, of their electoral success to the Modi wave. A large section of voters would have voted for them, just because they wanted to see Modi as the PM. Hence, taking such supporters for granted is a very bad idea.  Secondly, they must realise, BJP owes a large share of its success to its online supporters, especially on Twitter. Twitter may not have as many active users as Facebook, but this is where all memes originate, all jokes start, which target politicians, which mock leaders, which eventually percolate to whatsapp groups and email  chains. Antagonising your strength when a quiet word can do much better is harakiri.

Politicians must also realise it is far better to be surrounded by alert and frank supporters, rather than true-blue yes-men “Bhakts”. Finally, it is the supporters who make a politician and it is always good to have people who will call a spade a spade. What one must adjust to is tolerating the sometimes offensive tone and tenor, instead trying to find the message, and analysing whether it is relevant.

After Lekhi went off track, so did some over-enthusiastic supporters. One cannot expect that an MP will boycott a program with her voters just because one media person who is at loggerheads with her support base is present at the venue.

Social media supporters also must realise the predicament elected leaders, especially spokespersons are in. Social media users expect that some controversial journalists and their channels be boycotted. But it is not as simple. If this criteria is used, 80-90% of media houses would have to be boycotted. The result would be the party would be unrepresented at debates and there would be no one to counter the propaganda. Until and unless there are enough media houses and channels on the other side as well, it is a must that BJP leaders and spokesperson grace such channels and put forth their views.

Also, saying that leaders should individually snub media houses or persons is easier said than done. Media and politicians have an odd relationship. They are often at loggerheads on many issues, yet politicians depend on the media to get adequate publicity. Hence, they always have to strike a fine balance in being tough, yet not adversarial with media persons. Further, if they do get into fights with media persons, then they are inviting even more negative press for themselves and their party. This is the harsh reality which one must understand.

In sum total, while one can fault a section of social media users for unnecessary outrage, they cant be taken to task because at the end of they day they are not honourable MPs elected to the Parliament. An MP on the other hand must understand how to handle such tough situations with tact and patience, instead of making enemies out of friends.

P.S.: On a side note, these category of supporters who question their own leaders are also hilariously tagged as “Bhakts” by leftists.

Media indulges in malicious reporting of Parrikar’s speech on Aamir Khan

Gaurav
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Media indulges in malicious reporting of Parrikar’s speech on Aamir Khan

Defence Minister Manohar Parrikar was recently in Pune, for the release of the Marathi version of a book written by journalist-author Nitin Gokhale on Siachen. At the function, Parrikar gave a speech, which became the talking point for media houses

Most media reports claimed Parrikar blasted Aamir Khan for unpatriotic comments:

Parrikar blasts actor Aamir Khan for ‘unpatriotic’ comments last year

Parrikar says Aamir Khan’s remark ‘arrogant’

Manohar Parrikar Rakes Up Aamir Khan’s Controversial Remark, Dubs It ‘Arrogant’

Indian Express had a markedly different headline:

Parrikar takes swipe at actor (Aamir): those who speak like this must be taught lesson

The Indian Express claimed Parrikar said:

…anyone speaking against the country must be “taught a lesson” in the same way that an “actor” and an “online trading company” were taught.

“Some of our people are very smart, I know. There was a team which was working on this. They were telling people you order and return it… The company should learn a lesson, they had to pull his advertisement”

Some leftists journalist quickly latched on to the juicy parts to create a narrative. An abusive journalist tweeted this:


A journalist formerly with India Today used the quotes from the Indian Express story:


Sagarika Ghose too harped on the words “Our Team”


So did Defence Minister Manohar Parrikar really say this? The video of that portion of the speech is out for all to see, and it is clear as daylight. A transcript of that part is presented below:

How does someone dare to talk about ill of this country, wrong about Bharat Mata. I am not referring to Srinagar (incident), I am talking about Delhi (incident). How does anyone have guts to speak against the nation? How does he have the courage to speak like this? I am not talking about any university any organisation (audience laughs and claps). When anyone speaks like this, he has to be taught a lesson of his life. And people have done that, with people power…

One actor did this mistake, saying that his wife wants to go abroad and stay there, (audience laughs) It was an arrogant statement, However poor my family is, or however small my house is, I have to love my house and always aim to make a big bungalow out of it, through a right procedure. But you can’t feel ashamed of yourself.

Some things we take it the public in a wrong manner. I remember a story, once a boy was going to school. How, we sometimes (unclear) wrong things. How we have to often correct these things at home only.

When this actor did this, the company for which he was advertising, was an online trading company. Many people broke relations with that their company. Many people quit from the lease, and some over smart people ordered goods and sent them back. There was a team, which I know, which was working on this. They were telling people you order and return it, this company should learn a lesson. That to pull out his advertisement.

Nowhere in this portion of the speech does Parrikar say “our people”. He only says that many people used a legal means of boycotting an organisation, and that he knew of a team of people who was also working on this. Even the organiser of the event tweeted saying that he never heard Parrikar say “our people”:


This completely goes against the narrative created by some media houses and some leftist journalists that BJP’s or Parrikar’s “own people” were behind the Snapdeal movement. This also reveals that most media houses did not even report that Parrikar spoke about the Delhi sloganeering as well as Aamir Khan, and hence not all his comments were attributed to Aamir Khan.

Hence, it may even be argued by some that the “taught a lesson” comment, was a sly reference to JNU, which he comically tried to deny. In fact, this was the exact interpretation of NDTV itself:

According to Mr Parrikar, when the actor made the statement last year, many people had protested against his remark and even uninstalled the mobile application of an online shopping site he was associated with, while the firm had also pulled out the advertisement featuring him.

In an oblique reference to the alleged anti-national sloganeering at JNU earlier this year, Mr Parrikar said those who speak against the nation need to be taught a lesson by people of this country.

The main question then to ask his, from where did the Indian Express report cook up the lines “our people”, which in turn led many to believe that BJP or the Defence Minister had spear headed this campaign, and thus, had the tacit or otherwise endorsement of BJP of the Defence Minister. Was there some other bit of the video which is yet unreleased? Or was this a figment of the Indian Express’s imagination, since no other media reported the “our people” line?

After Arnab’s veiled attack, a desperate Barkha begs and fights for support online

OpIndia Staff
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After Arnab’s veiled attack, a desperate Barkha begs and fights for support online

Just a few days back, in his customary fashion of being loud and over the top, Arnab Goswami launched a monologue against a set of “pseudo-liberals”. He did not name anyone, but asked questions of those “who have been trying to echo the Pakistani line, in the guise of backing Kashmiris”, those “who are using the killing of a terrorist, trying to project Burhan Wani, as an innocent son of an headmaster”, those “who give away operational details, of the movement, the logistical details of the armed forces when they are taking on terrorists”, those “who backed those who chanted Bharat ki Barbaadi in JNU”.

Barkha Dutt of NDTV ticked all the boxes and the informed viewers of Arnab’s show would have guessed the target. Barkha’s initial response came as a desperate spin, claiming that Arnab had asked for media to be “gagged”:


It took time, but people from her own fraternity and others began calling out her bluff:


Barkha tried to shift the goal-post but was caught again:


Eventually, though, Barkha was caught in her own trap. She admitted that the closest thing Arnab had said to “gagging the press”, was last year, when he had asked for censorship of Leslee Udwin’s documentary.


So, is Arnab’s alleged call for censoring a documentary equal to a call for gagging the media? This was Barkha Dutt’s first claim when she sparked off the controversy:


By that logic, did Barkha Dutt also indulge in “gagging” of the social media, when she sued a blogger Chaitanya Kunte, forced him to shut shop and disappear? Further, if the call for “gagging the media” was made last year, why did Barkha Dutt suddenly get so perturbed? Is it to deflect attention from Hafiz Saeed’s endorsement?

Or is she afraid of a “trial”? Why would an honest journalist be afraid of a trial by a judicial process, in her own country? Unless the said journalist is not honest, or doesn’t trust the judiciary…

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Barkha Dutt also claimed that she “didn’t give a toss” for Arnab’s opinion. Ironically this was claimed in a verbose Facebook post. But as we see now, Barkha did indeed get deeply affected by Arnab’s barbs.

Since then, Barkha has over 50 tweets dedicated to this issue, a blog on NDTV, and incessant re-plugging of the her Facebook and blog posts. And inspite of all this, it appears Barkha wants more support. She has now feuded with many journalists, in public, on social media, asking for more support.

First, she pontificated to CNN IBN anchor Bhupendra Chaubey, on how she expected him to cover her spat with Arnab, and how she expected his support:

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Then Barkha had a fight with ANI News editor Smita Prakash. While Prakash was trying to argue that the debate on Chaubey’s show was tilted towards Barkha, Barkha had a problem that there was even a debate! She expected complete and utter support!


So the great host of the great debate show “The Buck Stops Here”, does not even want a debate on her acts. Barkha in fact hadn’t even seen the concerned show and yet was hyper-ventilating online:


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Next she moved on to Rajdeep Sardesai. She hinted that by choosing to remain silent, Rajdeep was complicit in the attacks on her. Rajdeep had written a post on this issue, titled: “Why I will not speak on the Arnab-Barkha ‘war'”

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Rajdeep claimed that even without saying much, he had said a lot, but Barkha did not seem pleased:


Even non-journalists, were not spared by Barkha. Chetan Bhagat committed the great sin of asking whether he could like Arnab and Barkha both, but of course Barkha arm-twisted him into choosing her.


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This is the same Barkha Dutt, who accuses Right Wing leaders of summoning “twitter armies” whenever there is an argument, when in fact it is mostly ordinary user jumping in using their own free will. While, Barkha is admonishing, sermonising and egging other journalists to come and support her unequivocally, just because she thinks she is right.

Even as we report this, Barkha Dutt is still fixated on this issue, inspite of proclaiming that “she doesn’t give a toss” for Arnab. Clearly, Arnab Goswami has become one of the few journalists to break the code of Omerta, of silence, when it comes to questioning those within the media. And on this occasion, even without naming Barkha Dutt, he has managed to disturb her to an extent that she has been reduced to publicly fighting and begging for support from those within her fraternity.

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Why Barkha Dutt is attacking Arnab Goswami? The reasons go beyond TRPs

Rahul Roushan
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Why Barkha Dutt is attacking Arnab Goswami? The reasons go beyond TRPs

Controversial television journalist Barkha Dutt is on a mission these days. The Consulting Editor of NDTV, whose conversations with corporate and political lobbyist Niira Radia were leaked in 2010, is lobbying with fellow journalists to bring down Arnab Goswami, the always angry Editor-in-Chief of Times Now.

While one may think that it’s the TRPs – the metric to measure how popular a TV channel or a news show is – that is driving this jealousy as Arnab has garnered all TRPs, the reasons go much beyond that.

A sequence of events has led to the current hysterical state of Barkha Dutt, starting with the Indian Army killing Hizbul terrorist Burhan Wani in Kashmir. The immediate reaction of Barkha to this big news was this:


This tweet itself brought criticism to Barkha as people pointed out that not only she skipped the word “terrorist” to define Burhan (instead calling him ‘commander’, as if he held some legitimate post), but painted him as a guy whose father was someone indulged in noble job of teaching and whose primary interest and involvement was within social media.

Deliberately or inadvertently, Barkha appeared to have indulged in harmful distortion. It was soon discovered that Burhan’s father was no ordinary school headmaster, but someone who held jihadist views. While Burhan’s activities went beyond social media and he played active role in many killings and threatened to carry out terror attacks.

Following Burhan’s killing, there were violent protests in Kashmir by separatists against security forces, and there were casualties on both sides. Once again, many felt that Barkha Dutt was soft on separatists in her reporting from the ground zero.

Barkha was, however, almost unperturbed by these criticisms. Until Hafiz Saeed spoke. In a TV interview, the mastermind of Mumbai Terror Attacks thanked Barkha Dutt and Congress leaders for their “good work” in Kashmir.

A note of thanks and recognition from a terrorist is the last thing someone would want. Also, what comprises “good work” in the scheme of things of a terrorist is a further troublesome idea. Barkha knew that this was something she needed to get off from her back.

And she found an alibi in Arnab.

Arnab didn’t really ask for any gag on media – something Barkha is claiming in her current tirade against him, and thus making it a case of press freedom (and giving cue to others to cry Emergency?). Yes, Arnab did ask some in the media to be exposed, investigated, and tried for their links with those in Pakistan who plot downfall of India.

What’s wrong with that? He didn’t name anyone. And it’s absolutely fair to demand that those in cahoots with the enemies of the nation should be investigated and tried. And if they happen to be in media, there is no reason why they shouldn’t be tried.

Remember that the same Arnab had gone ballistic against a Hindi journalist named Ved Pratap Vaidik, who had met Hafiz Saeed two years ago. Vaidik had claimed that he was a journalist and thus his meeting with Hafiz should be seen in different context, but Arnab was not ready to buy that argument.

So Arnab’s stand on this issue is consistent. He is not willing to give any concessions to anyone claiming to be a journalist as far as hobnobbing with the enemies of the state is concerned. And this time he didn’t really name anyone, but Barkha thought it was about her.

Barkha made it all about her (but under guise of defending press freedom) because she desperately wanted to get the Hafiz Saeed’s endorsement forgotten by the public. And the best way to do was to start a bigger controversy – make big statements like being ashamed of being in the same industry as Arnab Goswami and virtually calling him a “chamcha” (sycophant).

This appears to be working. People are no longer talking about why Hafiz Saeed thinks Barkha Dutt or Congress leaders do “good work” in Kashmir, but now it’s all about “good journalism” that Arnab Goswami is not supposed to be doing.

Apart from taking the focus off Hafiz Saeed’s statement, the attack on Arnab by Barkha and her friends serve another purpose – to show the journalists and media persons about who the real daddy is.

Those broadly subscribing to the left-liberal ideology have had a mafia like control on media for long. Arnab is someone who is not a typical left-liberal. Arnab is no right-winger as well, but he is definitely no Adarsh Liberal. He himself underlines that fact by terming the others as “Lutyens Media”.

And thus someone like Arnab ruling the media scene hurts the other side. They need excuses to attack him and to cut him to size, so that others get the message – if we didn’t leave Arnab, who are you? It is a signal to those in junior and middle level positions in journalism – be with us, or you’d be taught a lesson just like we are teaching Arnab a lesson.

So there won’t be easy end to this battle, as this goes beyond TRPs and personal egos of two former colleagues. Perhaps next in line will be a leaked letter or “sources” based story that many journalists in Times Group have written to the top management complaining about Arnab’s attack on press freedom, and that top management is upset with Arnab, and so on.

The nation wants to know what Arnab has thought about it, and how will he deal with this organized attack on him. Right now it seems that he doesn’t give a toss about it.

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