News – Page 20 – Gopal Krishna Agarwal

Contrarian View Is Fine, But Govt Is Trying Hard

October 14, 2017

Any debate on real issues facing the economy is always welcome. So we welcome Yashwant Sinha’s concerns on the state of the economy. Prime Minister Narendra Modi has Acknowledge that the first quarter GDP Figures are a cause of concern. The Economy has problem such as private investment, financial institutions distress and employment. But we have to look at what the government is doing.

One can always have a contrarian view and get statistical data to back it up. It is therefore not surprising that Mr. Sinha chose the wrong figure of 65000 crore as input tax credit demand under GST although the returns for input tax credit claims have not yet been filed. These assumptions of tax credit demand are based on IGST figure alone and therefore wrong estimates.

Second, the negative impact of demonetization was due to the initial liquidity crunch. With fresh currency in circulation by June-end 2017, this was a short term pain.

Also, currency does not have shades of black and white. Black money is determined only on the basis of ownership. With identity now clearly established, tax evasion will be checked and black money traced.

Demonetization has pushed people to move business transactions to banking channels establishing audit trails. This is a prerequisite for successful implementation of the Goods and Services tax (GST). Once the benefits of GST such as impute tax credit and removal of the cascading effects of tax are implemented. Consumer prices will come down. With better tax compliance the government can also lower indirect tax rates. This indication has already been given by the union Finance Ministers.

The complete online structure of the GST network after full implementation by December 2017, will bring ease of doing business (EODB). Once initial transaction are uploaded into the system, other information will be transmitted automatically. With online registration return assessment and refunds without intervention by tax personnel, the day to day life businessmen will become hustle free, similarly, more and more processes. Including e-tendering are being done online through technological innovation. So, Mr. Sinha’s question of raid raj is limited to tracking black money and corruption cases.

For the first time the Government has made a concerted bid to enhance manufacturing in India with EODB. The world bank has recognized 20 economic reform of the Modi Government that will be considered in this year’s international ranking. This will significantly improve India’s EODB ranking. It has helped attract foreign direct investment which is now at an all time high of $62 billion. This indicates faith in the future of the economy.

A major Criticism of the previous UPA Government was policy paralysis and lack of ownership of problems. The current government is active on all fronts. Mr. Modi is personally overseeing stalled projects in infrastructure power and steel under the Pro- Active Government and timely implementation initiative through a three-tier system (PMO Union Government secretaries, and chief secretaries of states). Twenty such meetings of Pragati have led to a cumulative review of 183 Projects with a total investments of 8.79 lakh crore.

The UPA Government compromised loans from public sectors bank. The present government has inherited the NPA problem along with several macroeconomic establishing factors high inflation a fiscal deficit of over 4.5 per cent of GDP and falling GDP growth. The government is now identifying and resolving NPAs through pragati, the insolvency & bankruptcy code and the Benaim properties Act which was passed 28 years back but was not notified.

Indian is among the World’s fastest growing economics, the seventh largest economy by nominal GDP and the third largest by purchasing power parity (World Bank) 2015. But the benefits of this growth are unevenly distributed. As per the Global Wealth Report, 2016. The top one per cent of our population has over 58 per cent of the total wealth of the country. Large scale corruption is the main cause of uneven growth. Curbing corruption and eliminating black money is a key mandate of the present government. Mr. Modi’s initiatives to flight this meninge include the setting up of a special investigation team.

The Foreign Assets Declaration scheme renegotiation of bilateral treaties on double taxation avoidance agreements with Mauritius Cyprus and Singapore the income disclosure scheme (IDS) I & II Banal transactions Amendment Act (2016). Demonetizations deregistration of shell companies and GST, These efforts have helped establish a clean business environment.

The gloom is nowhere in sight with healthy foreign exchange reserves the current account and fiscal deficit under control a strong rupee healthy tax collection boosting government revenue corruption and crony capitalism under check a leak proof and targeted delivery mechanism for financial participation and a proactive government committed to structural reforms. Mr. Modi may be criticked for sqeezing too many reforms into a small time span. He believes in accountability has created a performance matrix and is setting tough targets. His commitment to doubling farmers income by 2022, providing five crore low cost housing units electrification of all villages, electricity to every house, bullets trains a corruption free business ecosystem, self employment, rural roads, regional low cost air connectivity and two lakh km of optical fibre connectivity, all point to his pro poor and business friendly approach.

He was voted to office to change the status-quo and create a new normal. That is what his government is doing.

By Third Quarter Of Current Fiscal, Job Market Set To Revive

September 21, 2017

By Gopal Krishna Agarwal,

The job market has not to be seen only in light of NSO employment data but also include self-employment opportunities created with entrepreneurship development. The job market has significantly undergone change with new set avenues being created with technological advancement and changed economic scenario. The data with regards to jobs have to be looked from a different perspective. With all the macroeconomic parameters being favorable the economy has bottomed up.

GDP growth figures will significantly improve in the coming quarter. Government investment over the period has increased many folds, basically in infrastructure development. PM’s concerted efforts; to revive stalled projects through the PRAGATI initiative has helped many held up projects. These are creating a lot of demand in the economy propelling private investment as well. Projects like bullet train, which catalyze growth, are seeing the light of the day.

Modi government focus on improving manufacturing sector and make India, a global manufacturing hub is important. Globally employment generation primarily emerge from this segment. A new form of employment is being generated with different skills. We have to see the results of developing self employment and entrepreneurship. Youth is waking up to the requirement of different skill sets where new opportunities are emerging exponentially like a wireless network, data scientist, data architect, artificial intelligence, automobile engineer, 3D technician, cyber security expert etc. Even aggregators like Uber and Ola and E-commerce business are giving new working opportunities. People are being trained in new skills.

They are leaving traditional occupations behind. Government efforts on skilling and entrepreneurship development like 5 crore mudra loans and stand up, startup ecosystem is working well. We have reached the third rank in global start-up ecosystem. With corruption and black money under check, transparency and online system of doing business under the new GST and the digital economy regime, ease of doing business (EODB) has gained tremendous momentum.

World Bank has recognized twenty economic reforms of Modi government and are ready to be considered in next EODB ranking. We are expecting significant improvement in next the ranking. Nomura has also estimated that our GDP will grow at 7.1% YOY basis. All this is showing positive sentiments and by the third quarter of current fiscal, the job market is going to go up significantly and is already showing signs of improvement. Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house.

GST Is Not Just a Tax Reform But Is a Social Transformation

July 19, 2017

By Gopal Krishna Agarwal,

Nitial anxiety apprehension with regard to GST rollout is largely owing to lack of awareness and information about the new tax regime. The Apprehension is with regard to its implementation. People are worried about how they will be registered, how they will be registered, how they will avail benefits of input tax credits, the anti profiteering clause and how the reduce taxes shall be passed on to the consumers. These are concern that are being addressed through processes of instructions and consultations. I myself am travelling to many places for awareness programmed. They will be many regional meetings with trade bodies and professionals to create awareness about GST.

This is not just an economic measure. It means a social reform by ushering in a more transparent, tax complaint society. For the consumer, It would reduce prices of manufactured goods, for the government it would mean increase tax collection and fiscal consolidation and creation of a much simpler system to administer through GST network (GSTN).

The experience of demonetization shows that popular sentiment in India is for a transparent corruption free economy where opposition to a tax complaint regime is waning with the time.

Conceptually, no one has a problem with the GST. It does away with the multiplicity of tax structures subsuming 18 central, state and local taxes. It results in a reduction of indirect taxes for the consumer; it creates ease of doing business by online registration, filling of returns and assessments. It is the only mechanism through which we can create one tax one market. We are looking at an objective, online transparent and complaint tax system.

For the businessmen who are already registered under excise or VAT, the migration is simple and online. Once registered they have to only capture transaction carefully at the point of supply with full details. Rest; returns, input tax credit etc. will be automatically extrapolated by the GSTN.

Traders etc., whose turnover is below 20 lakh, are exempt under GST. Those traders and manufactured etc.

The appeasement Of None

April 25, 2017

By Gopal Krishna Agarwal,

Communal politics, which ironically passes for secularism in this country, has been the bane of Indian politics. It can be traced back to the British policy of ‘divide and rule’, the result of which was Partition. The Constitution was a repudiation of these ideas and the politics that perpetuated them. It rejected the suggestions for a separate electorate for the minorities and the proportional representation system, which it felt would lead to a perpetually enervated nation. But in most policies that have been followed until now, we have seen furtherance of vote-bank politics. The narrative has to change.

The recent PIL filed by a Jammu-based advocate, Ankur Sharma, in the Supreme Court, alleging that the rights of religious and linguistic minorities in the State are being “siphoned off illegally and arbitrarily” and the subsequent affidavits by the Central and Jammu and Kashmir governments give us a chance to look again into the secularism versus communalism debate.

देश के अर्थतंत्र की आवश्यकताओं की पूर्ति करने वाला ऐतिहासिक बजट

March 28, 2017

आप देश के किसी भी कोने या अर्थव्यवस्था के किसी भी क्षेत्र को लें, प्रधानमंत्री नरेन्द्र मोदी जी ने इस बजट में प्रत्येक के लिए कुछ न कुछ प्रावधान रखा है। यह एक मैजिक बॉक्स जैसा है, जिसके जरिये वित्त मंत्री ने प्रत्येक की आवश्यकताओं की पूर्ति करने का उपाए किया है, परन्तु किसी भी व्यक्ति के लालच को संतुष्ट करने की बात इसमें नहीं है।

बजट का अन्तर्निहित संदेश यही है कि इसमें लोकप्रिय घोषणाओं की लीपापोती नहीं की गई है (जबकि पांच राज्यों में चुनाव होने जा रहे थे), बल्कि अर्थव्यवस्था के उन पहलूओं पर चोट की गई है, जो हमें अधिक आहत करते हैं।

वित्त मंत्री ने आश्चर्यजनक ढंग से अर्थव्यवस्था के महत्वपूर्ण क्षेत्रों को छुआ है और ऐसे सुधारात्मक उपाए किए हैं जिनके दूरगामी परिणाम निकलते हैं- जैसे ग्रामीण कनेक्टिविटी, किसानों की समस्याएं, युवाओं के लिए रोजगार, मांग-आपूर्ति, सरकारी निवेश, चुनावी सुधार, उच्च कर-अनुपालन, व्यक्तिगत करों में कमी, 50 करोड़ तक के टर्नओवर वाले एमएसएमई के करों को कम करना, पुनः विमुद्रीकरण सम्बन्धी विषयों को ठीक करना ‘कम ट्रांजेक्शन कॉस्ट’ डिजिटल अर्थव्यवस्था की तरफ बढ़ना, असंगठित क्षेत्रों के लिए बड़े पैमाने पर पूंजी उपलब्ध करना और व्यापार व्यवस्था को सरल करने के उपाए करना, ग्रामीण इंफ्रास्ट्रक्चर का निर्माण तथा आम जनता को कम कीमत के मकान उपलब्ध कराना एवं समाज के वंचित वर्गों की सामाजिक सुरक्षा आदि के कई महत्वपूर्ण उपाए किए गए हैं।

सरकार मुद्रास्फीति की दर को दिसम्बर 2016 के 6 प्रतिशत के स्तर से घटा कर जुलाई में 3.4 प्रतिशत पर ले आई, 2016/17 के पहले छमाही के घाटे को जीडीपी के 1 प्रतिशत दर से कम करके 0.3 प्रतिशत पर ले आई है और वैश्विक एफडीआई में 5 प्रतिशत का प्रवाह कम होने के बावजूद भी भारत में एफडीआई का विकास 36 प्रतिशत तक बढ़ गया है। ये सभी बड़ी भारी उपलब्धियां हैं।

हालांकि वैश्विक मंदी की चुनौतियां सामने हैं, परन्तु सरकार इनका सीधे सामना कर रही है। जीएसटी का संवैधानिक संशोधन विधेयक पारित हो चुका है और कालाधन तथा भ्रष्टाचार समाप्त करने के लिए उच्च मूल्य करेंसी के विमुद्रीकरण के ऐतिहासिक निर्णय को सफलतापूर्वक कार्यान्वित किया गया है। इंसॉल्वेंसी और बैंकरप्सी कोड समूचे बैंकों के अच्छे स्वास्थ्य के लिए लाया गया है। सरकारी निवेश को बढ़ाकर 3,96,000 करोड़ रुपये कर दिया गया है। 2017-18 के बजट का सरकारी एजेण्डा विकास के लिए दस वर्ष का स्पष्ट रोड मैप है जिससे ‘ट्रांसफोर्म, एनर्जाईज और क्लीन इण्डिया’ बनाने का प्रयास हो रहा है। बुनियादी रूप से सरकार वर्ष 2022 तक किसानों की आय दुगुनी करने के लिए प्रतिबद्ध है, जिससे ग्रामीण क्षेत्रों में बुनियादी इंफ्रास्ट्रक्चर खड़ा किया जा सके, शिक्षा तथा योग्यता के जरिए युवाओं के लिए रोजगार का निर्माण हो सके। अपवंचित वर्गों के लिए सामाजिक सुरक्षा, आवास और स्वास्थ्य सुविधाएं मजबूत करना भी उद्देश्य है। सभी के लिए इंफ्रास्ट्रक्चर खड़ा करना और वित्तीय क्षेत्र में स्थायी और मजबूत संस्थान बनाना। सभी सार्वजनिक सेवाओं के लिए कुशल डिलिवरी (सुपुर्दगी) मैकेनिज्म, न्याय संगत वित्तीय प्रबंध एवं कुशल-व-पारदर्शी सम्पत्ति कर प्रशासन की तरफ बढ़ना भी आवश्यक है। ये सभी ऐसे रोडमैप हैं जिनके माध्यम से सरकार विकास तथा मजबूत अर्थव्यवस्था की तरफ तेजी से बढ़ेगी। बजट में यह सभी विषय ध्यान में रखे गये हैं।

हमारे विश्लेषण में यह सभी तथ्य स्पष्ट रूप से उजागर होते हैं। किसानों के राहत के लिए किसानों को ऋण देने के रूप में 10 लाख करोड़ रुपए का आवंटन किया गया है। उनके ऋण पर 60 दिन के ब्याज को माफ कर दिया गया है; नाबार्ड फंड को 40000 करोड़ रुपए तक बढ़ाया गया है; डेडीकेटेड माइक्रो फंड को प्रारम्भ में ही 5000 करोड़ रुपये कर दिया गया है; सिंचाई की राशि को दुगुना करके 40000 करोड़ रुपए कर दिया गया है। नीति आयोग ने कांट्रेक्ट फार्मिंग पर एक मॉडल कानून तैयार किया है और इसके कार्यान्वयन के लिए राज्यों को लागू करने की बात कही गई है।

ग्रामीण विकास और कनेक्टिविटी के लिए 1,87,223 करोड़ रुपए की राशि आवंटित की गई है। प्रतिदिन 131 कि.मी. सड़कों के निर्माण का लक्ष्य रखा गया है। मार्च 2018 तक 100 प्रतिशत ग्रामीण विद्युतीकरण करने का वायदा है और 2019 तक गरीबी से निपटने के लिए 1 करोड़ आवास बनाने का भी सरकार का लक्ष्य है।

नवभारत के लिए कुशलता एवं शिक्षा के लिए 100 अन्तर्राष्ट्रीय कुशलता केन्द्र खोले जाएंगे, जिनमें विदेशी भाषाओं के पाठ्यक्रम भी शामिल रहेंगे। सभी प्रवेश परीक्षाओं के लिए एकीकृत राष्ट्रीय परीक्षा एजेंसी स्थापित की जाएगी और 3479 शिक्षापरक बैकवर्ड ब्लाक की स्थापना की जाएगी।

चुनावी सुधारों के लिए कई अत्यंत महत्वपूर्ण पहल किये हैं। किसी एक स्रोत से कोई भी राजनैतिक पार्टी को नगद 2000 रुपए का दान ही दिया जा सकता है। आरबीआई एक्ट में संशोधन किया जा रहा है, ताकि निश्चित भुगतान तारीख के साथ चुनावी बांड जारी किए जा सकें। चैक या डिजिटल ट्रांजेक्शन के माध्यम से किसी भी बैंक या डाकघर से ये बांड खरीदे जा सकते हैं; केवल रजिस्टर्ड पार्टियां ही इनका भुगतान करवा सकती हैं। अब सभी पार्टियों के लिए हर वर्ष के दिसम्बर के अंत तक आयकर विवरणी भरना आवश्यक है।

विमुद्रीकरण के बाद अधिक कर अनुपालन के लिए सभी खातों में जमा रकम का विश्लेषण किया जाएगा। 3 लाख रुपए के ऊपर के किसी भी नकट ट्रांजेक्शन की अनुमति नहीं है। संशोधित कर विवरणी के जांच का समय भी घटा कर 12 महीने कर दिया गया है। पहली बार आयकर विवरणी भरने वालों के लिए किसी प्रकार की सरकारी स्क्रूटनी आड़े नहीं आएगी। बिजनेस इन्कम के अलावा 5 लाख की वार्षिक आय वाले लोगों के लिए एक पृष्ठ की सरल विवरणी तैयार की गई है।

व्यक्तिगत करदाताओं के लिए कर दर में कमी की गई है। 2.5-5 लाख रुपए की वर्तमान आय पर कर रेट 10 प्रतिशत से कम कर 5 प्रतिशत कर दी गई है, इसलिए बाद की सभी आय ब्रेकेट में करदाताओं के लिए 12,500 रुपए तक का कर कम लगेगा।

एमएसएमई सेक्टर के लिए कार्पोरेट करों में भी कमी की गई है। एमएसएमई कम्पनियों के लिए 50 करोड़ रुपए टर्नओवर तक के लिए कर दर 25 प्रतिशत कर दी गई है। इस श्रेणी में लगभग 90 प्रतिशत कम्पनियां आती है। प्रधानमंत्री मुद्रा योजना के लिए ऋण लक्ष्य लगभग दुगुना होकर 2,44,000 करोड़ रुपए हो गया है।

आर्थिक विकास के लिए सबसे महत्वपूर्ण क्षेत्र पर ध्यान देने के लिए व्यापार करने को सरल बनाना है और सरकार ने इसके लिए पर्याप्त प्रोत्साहन के उपाए किए हैं; व्यापारी प्रतिष्ठान, जो प्रिजम्पटीव आय योजना का लाभ लेते हैं, उनकी टर्नओवर लिमिट ‘1 करोड़ से बढ़ाकर 2 करोड़’ कर दी गई है। इसी प्रकार व्यक्तियगत और एचयूएफ करदाताओं के लिए खातों के रखने की आवश्यकता की सीमा बढ़ाकर 10 लाख रुपए से 25 लाख रुपए या आय की वार्षिक सीमा 1.2 लाख से बढ़ाकर 2.5 लाख रुपए कर दी गई है।

स्क्रूटनी निर्धारण के लिए समय सीमा को 2018-19 निर्धारण वर्ष के लिए घटाकर 21 महीने से 18 महीने कर दिया गया है और आगे निर्धारण वर्ष 2019-20 तथा बाद के वर्षों के लिए 12 महीने कर दिया गया है।

कम कीमत के घर के प्रोत्साहन से समाज के कमजोर वर्गों के लिए घरों का प्रावधान किया गया है। एफोर्डेबल घरों को इंफ्रास्ट्रक्चर स्टेटस दिया जाएगा। पूंजी लाभ कर में बदलाव किया जाएगा, ताकि रियल एस्टेट को मदद मिले और ईएमआई पर ब्याज दर कम की गई है। यदि मकान खाली रखा जाता है और बेचा नहीं जाता है तो प्रिजम्पटिव किराया बिल्डरों पर लगेगा जिसके चलते उन पर फ्लैट बेचने के लिए दबाव आ जाएगा और इससे घरों की उपलब्धता भी बढ़ेगी।

गरीबों के लिए सामाजिक सुरक्षा बहुत महत्वपूर्ण है तथा सरकार ने इस विषय पर बहुत कुछ किया है। महिलाओं तथा बच्चों के लिए विभिन्न योजनाओं को बढ़ाकर आवंटन 1.84 ट्रिलियन रुपये कर दिया गया है। 2018 तक लेप्रोस्कोपी, 2025 तक टीबी उन्मूलन का लक्ष्य रखा गया है।

वर्तमान श्रम नियमों को सरल बनाने तथा कई तरह के श्रम नियमों का विलय करने के लिए कानून प्रस्तावित हैं, जिन पर काम चल रहा है। अनुसूचित जातियों का आवंटन बढ़ाकर 52,393 रुपए कर दिया गया है। अनुसूचित जनजातियों के लिए 31920 करोड़ रुपये और अल्पसंख्यकों के लिए 4195 करोड़ रुपये आवंटन किया गया है।

इन सभी प्रावधानों और घोषणाओं से स्पष्ट संकेत मिलते हैं कि यह बजट गरीबों के लिए है, किसानों का मददगार है और ग्रामीण भारत तथा समाज के उन वर्गों के लिए विशेष रूप से लाभकारी है जो पिछले कई वर्षों से अर्थव्यवस्था के विकास में भाग लेने से वंचित रह गए थे।

गोपाल कृष्ण अग्रवाल

(लेखक भाजपा के आर्थिक मामलों के राष्ट्रीय प्रवक्ता हैं)

Post Budget 2017 analysis

March 10, 2017

Historic Budget to satisfy everyone’s need but no body’s greed

Underlying message from the budget is that, it has abstained from window dressing with populist announcements, in spite of elections in five states, and has hit at the core of the economy where it hurts more.

FM has wonderfully touched the problematic area of the economy and has taken corrective measures having far reaching consequences. Important area, such as rural connectivity, farmers woes, youth employment, catalyzing demands, government investments, electoral reforms, higher tax compliance, lowering of taxes for individuals, reducing corporate taxes of MSME’s with turnover up to 50 crores, tackling the issues for remonetisation and moving towards low transaction cost digital economy, large scale capitalization support for unorganized sector and taking steps towards ease of doing business, creating rural infrastructure and making available low cost housing and social security for the poor and left out segments of the society etc. are some important initiatives.

You name any segment in the country or any sector of the economy, Prime Minister Narendra Modiji’s this budget has something for everyone. It’s like a magic box through which FM has been able to satisfy everyone’s need but not anyone’s greed.

Government has brought down inflation from 6% in July to 3.4% in December 2016, current account deficit from about 1% of GDP to 0.3% in first half year of 2016/17 and growth in FDI growing to 36% despite reduction of global FDI flows by 5%, are all big achievements.

Though there are challenges of meeting global recession, but Government is tackling them head on. Constitutional amendment bill for GST has been passed and landmark decision for demonetisation of high value currency to curb Black money and corruption has been successfully implemented. Insolvency and Bankruptcy Code is in place to improve overall banks health. For catalyzing demand; Government Investments is being increased to Rs 3, 96,000 crores.

Governments Agenda for Budget for 2017/18 is to ‘Transform, Energise and Clean India having ten clear cut road maps for growth. Basically government has committed to double farmers income by 2022, providing basic infrastructure in rural areas, creating employment for youth through education and skilling. Strengthening of Social security, housing and health facilities for the underprivileged. Infrastructure for all. Stable and stronger Institutions in the financial sector. Moving towards digital economy for transparency and lower cost of transactions. Efficient delivery mechanism for all public services, optimal & judicious fiscal management and efficient & proper tax administration. These are the road maps through which the government wants to propel growth and catalyze economy.

Our sectoral analysis brings out clearly the above facts. For tackling Farmer’s Woes; a sum of Rs. 10 lakh crore is allocated as credit to farmers. Their 60day’s interest on loan has been waived; NABARD fund has been increased to Rs. 40,000 crore. A dedicated micro irrigation fund has been set up with Rs 5,000 crore initial corpuses; irrigation corpus is doubled to Rs 40,000 crore. And a model law on contract farming is prepared by NITI Aayog and shared with the States for implementation.

For Rural Development and Connectivity; Rs 1, 87,223 crore have been allocated. A daily target of building 131 kms of road has been set. Promise to achieve 100% rural electrification by March 2018 and the government target’s to bring 1 crore households out of poverty by 2019.

For Skilling and Education of the Young India; 100 international skill centres will be established with courses in foreign languages. A National testing agency is to be established for all entrance exams and focus will be on 3,479 educationally backward blocks.

Most important initiative of Electoral Reforms; starts with limiting, the maximum amount of cash donation for a political party to Rs. 2,000 from any one source. An amendment is being proposed to the RBI Act to enable issuance of electoral bonds, with maturity date. A donor can purchase these bonds from banks or post offices through cheque or digital transactions; only registered political parties can redeem these. Now it’s compulsory for all political parties to file Income Tax return by December end every year.

For increased Tax Compliance; after demonetization, all deposit data is to be analysed to increase tax net. No cash transactions above Rs 3 lakh are allowed. Time period of revising tax returns is reduced to 12 months and people filing I-T returns for the first time will not come under any government scrutiny. And a Simple one-page return for people with an annual income of Rs. 5 lakh other than business income has been prescribed.

Even there is Lowering of Tax rates for individuals; Existing rate of tax for individuals between Rs. 2.5- Rs 5 lakh is reduced to 5% from 10%, therefore all other categories of tax-payers in subsequent brackets will also get a benefit of Rs 12,500.

There has been reduction in Corporate Taxes for MSME sector. In order to make MSME companies more viable, for small companies with a turnover of up to Rs 50 crore to 25%. 67 lakh companies, about ninety percent fall in this category. Lending target for Pradhan Mantri Mudra Yojana has almost been doubled to Rs 2, 44,000 crores.

Most important area of focus for economic growth is Ease of Doing Business and government has taken lot of initiatives; threshold limit for audit of business entities who opt for presumptive income scheme is increased from ` 1 crore to ` 2 crores. Similarly, the threshold for maintenance of books for individuals and HUF increased from turnover of 10 lakhs to 25 lakhs or income from 1.2 lakhs to 2.5 lakhs. Time for completion of scrutiny assessments is being compressed further from 21 months to 18 months for Assessment Year 2018-19 and further to 12 months for Assessment Year 2019-20 and thereafter.

Incentive to low cost housing will provide houses to the weaker sections of the society and will boast to real state sector; Affordable housing will be given infrastructure status. A change in capital gains tax has been brought to support real estate and rate of interest on EMI has been lowered. Condition of presumptive rent, if housing are kept vacant and not sold, will put pressure for builders to sell flats and increase availability.

Social Security for the poor and left out segments of the society is very crucial and government has done a lot. It has stepped up allocation to Rs 1.84 trillion for various schemes for women and children. There is an action plan to eliminate leprosy by 2018, TB by 2025 and reduce IMR to 29 in 2019. Legislative reforms to simplify and amalgamate existing labour laws are in pipeline to boast labour rights. Allocations to Scheduled Casts, is increased to Rs 52,393 crore. Scheduled Tribes given Rs 31,920 crore and Minority affairs allocated Rs 4,195 crore.

All these provisions and announcement clearly points out that the budget is pro poor, pro farmers and rural India and benefits particularly those segments of the society who have been left out from the participation in the growth of the economy over the last several years.

Gopal Krishna Agrawal

National Spokesperson of BJP on Economic Affairs

gopal.agarwal@bjp.org

Historic Budget to satisfy everyone’s need but no body’s greed

March 2, 2017

Underlying message from the budget is that, It has abstained from window dressing with populist announcements, in spite of elections in five states, and has hit at the core of the economy where it hurts more.

FM has wonderfully touched the problematic area of the economy and has taken corrective measures having far reaching consequences. Important area, such as rural connectivity, farmers woes, youth employment, catalyzing demands, government investments, electoral reforms, higher tax compliance, lowering of taxes for individuals, reducing corporate taxes of MSME’s with turnover up to 50 crores, tackling the issues for remonetisation and moving towards low transaction cost digital economy, large scale capitalization support for unorganized sector and taking steps towards ease of doing business, creating rural infrastructure, making available low cost housing and social security for the poor and left out segments of the society etc.

You name any segment of the country or any sector of the economy, Prime Minister Narendra Modiji’s government’s this budget has something for everyone. It’s like a magic box through which FM has been able to satisfy everyone’s need but not anyone’s greed.

Our sectoral analysis brings out clearly the above facts. We give below the highlights for some important sectoral announcements and the list is not exhaustive but is inclusive:

Rural Development and Connectivity

· Rs 1, 87,223 crore are allocated for rural programmes.

· Rs. 19,000 crore announced for Pradhan Mantri Gram Sadak Yojana.

· The country to achieve 100% rural electrification by March 2018.

· The government targets to bring 1 crore households out of poverty by 2019.

· Over Rs 3 lakh crore will be spent for rural India.

· Budget for MGNREGA increased to Rs 48000 crores.

Tackling Farmer’s Woes

A sum of Rs. 10 lakh crore is allocated as credit to farmers.
60 days interest waiver on loans.
NABARD fund increased to Rs. 40,000 crore.
Government will set up mini labs in Krishi Vigyan Kendras for soil testing.
A dedicated micro irrigation fund set up with Rs 5,000 crore initial corpus.
Irrigation corpus increased from Rs 20,000 crore to Rs 40,000 crore.
Dairy processing infrastructure fund created with a corpus of Rs. 2000 crore.
Issuance of soil cards has gained momentum.
A model law on contract farming prepared by NITI Aayog and shared with the States for implementation.

Moving towards Skilling and Education for the Young India

Introduction of a system of measuring annual learning outcomes and innovation fund for secondary education.
100 international skill centres to be established with courses in foreign languages
National testing agency to be established for all entrance exams, freeing up CBSE, AICTE and other bodies
Focus will be on 3,479 educationally-backward blocks.
Special scheme for creating employment in leather/footwear sector.
Propose to leverage information technology with launch of SWAYAM platform for virtual learning.
Will take steps to create 5000 PG seats per annum.

Catalyzing demand through Government Investments

Increased infrastructure spending to Rs 3,96,000 crores.

Maintaining Fiscal Prudence

Economy has moved on a high growth path. India’s Current Account Deficit declined from about 1% of GDP last year to 0.3% of GDP in the first half of 2016-17.
FDI grew 36% in H1 2016-17 over H1 2015-16, despite 5% reduction in global FDI inflows.
Foreign exchange reserves have reached 361 billion US Dollars as on 20th January, 2017

Electoral Reforms

The maximum amount of cash donation for a political party reduced to Rs. 2,000 from any one source.
Political parties will be entitled to receive donations by cheque or digital mode from donors.
An amendment is being proposed to the RBI Act to enable issuance of electoral bonds, with maturity date. A donor can purchase these bonds from banks or post offices through cheque or digital transactions. Only registered political parties can redeem these.
Compulsory for all political parties to file Income Tax return by December end every year.

Tax Compliance

After demonetization, deposit data to be analysed to increase tax net.
No cash transactions above Rs 3 lakh.
GST: preparedness of IT system on schedule, which will help in reduction of indirect tax to maximum of 18%.
Time period of revising tax returns reduced to 12 months.
Concessional withholding rate will be extended to 30 June 2020, rupee-denominated masala bonds to be included.
MAT not to be abolished at present; to allow carry-forward for 15 years.
People filing I-T returns for the first time will not come under any government scrutiny.

Lowering of Individual Tax

Existing rate of tax for individuals between Rs. 2.5- Rs 5 lakh is reduced to 5% from 10%.
All other categories of tax payers in subsequent brackets will get a benefit of Rs 12,500.
Simple one page return for people with an annual income of Rs. 5 lakh other than business income.
Ten % surcharge on individual income above Rs. 50 lakh and up to Rs 1 crore to make up for Rs 15,000 crore loss due to cut in personal I-T rate. 15 surcharge on individual income above Rs. 1 crore to remain.

Reduction in Corporate Taxes for MSME sector

In order to make MSME companies more viable, there is a proposal to reduce tax for small companies with a turnover of up to Rs 50 crore to 25%. About 67 lakh companies fall in this category. Ninety-six % of companies to get this benefit.

Issues of Remonetisation and moving towards low transaction cost digital economy

After the Indian government has started wheeling the remonetisation mechanism enduringly, banks and ATMs are witnessing a flow of currency. However, the authorities are urge the citizens to go towards digital economy and it was reflected on the budget this year, which was centralised at spending more, but via digital modes.
Government to launch two new schemes to promote BHIM app, including cash back scheme for merchants.
Incentives for digital payments.
Lowering of costs for digital transactions.
Aadhaar Pay to be launched for people who don’t have mobile phones.
Panel on digital payments has recommending structural reforms.
To create payment regulatory board at RBI.

Capitalization of Unorganized Sector

Pradhan Mantri Mudra Yojana: Lending target almost doubled to Rs 2,44,000 crores.
Fresh focus on Stand-up and start-up India schemes: over 16,000 new enterprises have been set up.

Ease of Doing Business

Scope of domestic transfer pricing restricted to only if one of the entities involved in related party transaction enjoys specified profit-linked deduction.
Threshold limit for audit of business entities who opt for presumptive income scheme increased from ` 1 crore to ` 2 crores.
Similarly, the threshold for maintenance of books for individuals and HUF increased from turnover of 10 lakhs to 25 lakhs or income from 1.2 lakhs to 2.5 lakhs.
Foreign Portfolio Investor (FPI) Category I & II exempted from indirect transfer provision.
Commission payable to individual insurance agents exempt from the requirement of TDS subject to their filing a self-declaration that their income is below taxable limit.
Under scheme for presumptive taxation for professionals with receipt up to Rs ` 50 lakhs p.a. advance tax can be paid in one installments instead of four
Time period for revising a tax return is being reduced to 12 months from completion of financial year, at par with the time period for filing of return.
Time for completion of scrutiny assessments is being compressed further from 21 months to 18 months for Assessment Year 2018-19 and further to 12 months for Assessment Year 2019-20 and thereafter.

Low cost housing and boast to real state sector

Affordable housing to be given infrastructure status.
Changes in capital gains tax to support real estate.
Lowering of rate of interest on EMI.
Condition of presumptive rent if housing are kept vacant and not sold, this will put pressure for builders to sell flats.

Social Security for the poor and left out segments of the society

Mahila Shakti Kendras with Rs 500 crore corpus.
Stepped up allocation to Rs 1.84 trillion for various schemes for women and children.
Action plan to eliminate leprosy by 2018, TB by 2025, reduce IMR to 29 in 2019.
To create additional PG medical seats per annum.
Two new AIIMS in Jharkhand and Gujarat
Labour rights: Legislative reforms to simplify and amalgamate existing labour laws
Allocation to Scheduled Casts increased to Rs 52,393 crore.
Scheduled Tribes given Rs 31,920 crore.
Minority affairs allocated Rs 4,195 crore.
For senior citizens, Aadhaar-based smart cards with health details to be provided

Gopal Krishna Agrawal

National Spokesperson of BJP on Economic Affairs

gopal.agarwal@bjp.org

Facts on Demonetisation And Road Map Ahead

January 15, 2017

By Gopal Krishna Agarwal,

The recent announcements on demonetization have a created a new dimension in the economic ecosystem of the country. There is a debate in the country, whether it will have us in curbing corruption and eliminating black money in circulation. What will be its impact on the economy in the short medium and long term; particularly in the important segments like rural and agriculture sector, micro small and medium enterprises and unorganized sector like small traders shop owners & daily wagers etc. But Bing Bang reforms require this we are moving towards new revolution of Digital Economy. Demonetization has to be seen in a larger prospective.

Bringing economic growth to the country and curbing corruption and elimination of black money were the two important mandates on which our government came to power. Some of the important aspects that have to be kept in mind are.

According to the World Bank report 20% of wealth is stashed across all assets class i.e. Real estate gold and currency etc. Global Wealth report 2016 shows that 1 % of population has more than 58% of the wealth of the country. In the concentration of wealth India ranks 2^nd after Russia across globe.

97% of our population is having wealth of less than $ 10000 i.e. approximately Rs 700000. Cash currency ratio to GDP of 12% in India is very high compared to international standards. Budgetary resources of the government are very limited planned expenditure of approximately Rs 5.5 lakh crore is not enough for the government to undertake infrastructure developments and meet social security requirements.

Every citizen of the country is paying taxes in the form of indirect taxes but if it is properly accounted for it is not reaching government revenue coffers proper recording of transaction in system is necessary.

Demonetization cannot be analyzed in isolation. It is a part of the series of measures under taken by Shri Narendra Modi’s government since it inception keeping in mind the above ecosystem. The very next day Shri Modi came to power a special investigation team (SIT) was set up to suggest steps to curb corruption from the country. Starting that day several steps have been taken by the government to achieve these objectives.

1. Foreign illegal assets declaration scheme.

2. Renegotiation of bi lateral treaties with Mauritius, Cyprus and Singapore where most of the hawala transaction were taking place.

3. Treaty with America for sharing of financial information under FATCA.

4. Initiatives with OECD and G20 countries for information exchange.

5. Income disclosure Scheme (IDS).

6. Passing of Benami Properties Act.

7. Amendment to prevention of corruption Act and Placing of Whistle blower protection Act in the current session of parliament.

8. Now Pradhan Mantri Garib Kalyan yojana has been announced for penalizing those who deposit black money in the Banking channels.

9. In last two and a half years about 92 senior officials have been penalized for corruption which is much more than such as action in the past.

Demonetization is part of the larger plan of eliminating black money and fight corruption. It is the part of the whole process to create an ecosystem of equal and transparent opportunities for economic growth to the common men in all segments of the society across all segments of the society across all geographical areas.

Benefits of Demonetization

Due to huge currency in circulation economy was having inflationary pressure and value of housing etc. was getting out of common man’s hand. Demonetization will reduce prices in real estate and bring down inflation further.

2. Bring resources to the government for social benefits schemes for the poor and low income groups and infrastructure development in particular in the rural sector.

3. Helping us to move towards low interest rate economy with loans for housing sector poor and rural sector of society at lower rates.

Create infrastructure for smooth implement of GST, which in turn will help us reducing indirect taxes.

2. Curbing terrorist activities and other criminal activities like Maoist insurgency and extortions in north eastern area etc.

3. Removal of fake currencies in circulation.

4. Lower cost of transaction (cost of online payments and mobile banking are much cheaper).

5. Many awareness programs and incentives by the government on online payments.

6. Higher tax compliance. Third quarter tax collection reports shows. 26% increase in indirect tax collection 15% increase in direct tax collections.

26% increase in indirect tax collection, 15% increase in direct tax collection.

The government is well aware of the liquidity crunch, but this will be sorted out by 30^th December. We are asking people to move toward less cash economy through online payments and mobile banking but we will do this through creating awareness and not make it compulsory. Government will bring liquidity back into the system, but with reduction to about 8 to 9% of GDP.

The Government is well aware that, there is a chance that these squeezes in liquidity can affect the economic activities in the country.

The government has a roadmap to revitalize the Growth of GDP.

1. The current account and savings accounts deposits (CASA) of banks will increase. This will reduce their cost of funds and will also result in increased availability of funds.

2. Focus on credit off take through startup, standup mudra loans to medium and small sector and rural sectors of economy at reduced rate of interest.

3. Real estate price to fall further and with fall in rate of EMI, Housing will come with in the reach of the common man and will boast construction industry.

4. With more tax compliance Government can move towards lower of rates of taxation, and create premium on honesty.

5. With the black money in circulation not coming to the banking channels, can bring several benefits to the economy. But all this will be achieved only when black money is not recycled.

6. Through increased tax collection and enhanced resources Government will go for huge capital investments and social sectors spending to improve quality of life of the common men and catalyze growth.

7. Implementation of GST (which will lead to low indirect taxation) requires right ecosystem, the government is creating an atmosphere so that transactions are recorded properly and transparently.

8. With supply of black money being checked, Government will go for electoral reforms for curbing use of black money.

Government Has a Roadmap to Ravitalize GDP Growth

October 25, 2016

By Gopal Krishna Agarwal,

National Spokesperson on economic Affairs, BJP,

The announcements on demontisation have created a disruption in the country’s economic eco-system. There is a Debate whether it will help us curb corruption and eliminate Black money. What will be its impact on the economy in the short medium and long term particularly in the important segments such as the rural and agriculture sectors micro small and medium enterprises and the unorganized sector such as small traders shop owners and daily wagers? But demontisation has to be seen in a larger perspective.

Bringing economic growth and curbing corruption and eliminating black money were the two important mandates on which our government came to power. Some important aspects have to be kept in mind. A recent world bank report stated that 20 percent of black wealth of our country is stashed across all assets class- real estate gold and currency etc. The Global Wealth report 2016 shows that 1 percent of the population has over 58 percent of the country’s wealth. In this India ranks second after Russia. It also states that 97 percent has wealth of less than $ 10000- approximately Rs 7,00,000. This points out that over the years a lot of our wealth was accumulated in the form of black money in the hands of a select few. A large population was deprived of benefits of growth. Though the GDP Grew fast employment could not keep pace with it leading to skewed growth in the economy.

This has to be corrected at all cost. Objectives and effects of demonetization cannot not be analysed in isolation. It is a part of the series of measures undertaken by the Narendra Modi Government. The very next day Shri Modi came to power a Special Investigation Team was setup to suggest steps to curb corruption and eliminate black money.

The government has money objectives in mind from demonetization. First , due to huge currency in circulation the economy had inflationary pressure and housing was out of the common man’s reach.

Demonetisation will reduce prices in real estate and bring down inflation. Second It will bring resources to the government for social benefits schemes for the poor and low income groups and infrastructure development. Third, We will be able to move towards a low interest rate economy. It will help create infrastructure for smoother implementation of GST which will help us reduce indirect taxes. It will also curb terrorist and criminal activities. Fake currencies will be eliminated. As the cost of online payments and mobile banking are cheaper compared to physical transaction, we have to benefit of lower cost of transactions. And finally with audit trail and transparency, There will be higher tax compliance visible from the third quarter tax collection and 15 percent increase in direct tax collection. The government is aware of the liquidity crunch but this will be sorted out by December 30. It will Bring liquidity back into the system but at a reduced level of about 9 percent of GDP.

Objectives and effects of demonetization cannot be analyses in isolation. It is a part of the measures undertaken by the Modi Government

The government knows that a squeeze in liquidity can negatively affect economy activities. Therefore, It has a roadmap to revitalize GDP Growth. The Increased current account and savings accounts deposits of banks will reduce their cost of funds and increased availability of funds. The Government will focus on credit off take through startup, mudra loans to medium and small and rural sectors of the economy at the reduced rate of interest. Real estate prices have started falling and with the fall in the rate of EMI housing will come within the reach of the common man and will boost the construction industry. If the black money in circulation does not come to RBI through the banks, It will reduce the liability of the central bank bringing several benefits to the economy, but this will be achieved only when black money is not recycled therefore temporary restrictions on withdrawal. With higher tax compliances the government will be able to create a premium on honesty and move towards lower rates of taxation, as already hinted by the Finance Ministers.

At Ease With The World

October 21, 2016

By Gopal Krishna Agarwal,

National spokesperson, BJP

PRIME MINISTER Narendra Modi has been able to leverage India’s economicadvantages to improve international relations and vice versa. He recognises that India’s ambition to become a $10-trillion economy and create 175 millions jobs by 2032 will depend on linking the country’s foreign policy to domestic transformation. The Modi government’s policies have been geared to attract foreign capital and towards regional stability, peace and prosperity.

The prime minister’s personal rapport with international leaders has significantly enhancedIndia’s profile and given it a confidence neverseen before. Western economies are facing serious challenges. Global economic growth is seeing a downward trend.

However, Modi has been successful in convincing the international community that India will realise its true potentialas an economic power. He has removed apprehensions about corruption and showed commitment to reforms in tax and corporate laws, better resource allocation, faster goverment clearances, removal of bureaucratic hurdles and retrospective taxation. Two major apprehensions under the UPA regime – policy paralysis and large-scale corruption – have been effectively checked.

The government has embarked on initiatives like Make in India, Digital India, Smart Cities, Clean India, Clean Ganga, GST and the bankruptcy law, speeded up project clearances and revived stalled projects.

Over the years, bilateral trade relations and agreements have gained enormous significance in the international business arena and are now more influential than multilateral pacts like the WTO and GATT. It is becoming more and more difficult to bring developing countries to common agreeable points at multilateral platforms and, there-fore, small trade blocks like ASEAN, SAARC and BRICS and bilateral Free Trade Agreements have gained prominence. PM Modi has leveraged this tend to India’s economic and strategic advantage. Over a span of two years, he has visited more than 42 countries and nurtured new developmental and economic blocks. The Act East policy connecting Bhutan Bangladesh India Nepal (BBIN) through GPS and common licensing policy, a road corridor from the North East to Myanmar are commendable initiatives.

The Modi government ratified the Land Border Dispute Agreement (LBA) and addressed the maritime boundary dispute with Bangladesh. It fast-tracked development projects in Afghanistan. India’s participation in the development of the Chabahar port in Iran and forging a trilateral pact to build a land transit-and-trade corridor through Afghanistan are stepping stones for bigger future involvement. The PM’s Tehran visit underlined the changing context of Iran, now a stable and resourceful country and important for our energy security.

India-Japan relations are at their best India hopes to attract $5.5 billion of investments from Japan. Modi has built a good rapport with the German chancellor. Germany is the key provider of high-end technology and has surplus capital. India is looking forward to both technology and capital investment from Germany. In partnership with France, India has established the International Solar Alliance, with the head office in Gurgaon. This alliance, with 120 countries as members, aims to harness the country’s solar power potential. Modi’s reconnect with Central Asia has also been a crucial intervention Uzbekistan has strong cultural ties with India. Turkmenistan is rich in energy; Kazakhstan has huge hydro potential while Tajikistan is historically significant. Africa offers India a massive opportunity to expand our global economic footprint. The continent is an important market for the Indian economy. The 54 African states have a combined GDP. Which is larger than that of India? The third India-Africa Summit in New Delhi in 2015 focused on enhancing India’s engage with Africa.

A visionary step of PM Modi was leveraging India’s powerful diaspora. While empowering the diaspora in their domicile countries, the government has coordinated with them for advocacy and building influence. He sought to connect directly with NRIs in a unique fashion. His first outreach in New York – at Madison Square Garden – attracted 15,000 NRIs. About 5,000 people attended his meeting in Beijing whereas over 60,000 people turned up for the Wembley Stadium programme. The significance of the diaspora is self-evident in the flow of remittance to India: According to the World Bank, India received $72 billion in 2015 as foreign remittance, making it the world’s largest remittance-receiving country.

India is now among the world’s top destinations forFDIflows. It has attracted investment of close to $200 billion from foreign in-vestors. In 2014, India’s total trade was 46 per cent of the GDP. India plans to double its aggregate global trade over the next decade.

Our targets for 2019 include becoming the top start-up destination in the world, achieving 60 per cent digital penetration and increasing the share of manufacturing in GDP From 16 percent to 25 percent by 2022.