“Goods and services tax as an unfinished agenda”

News– GST was launched in July,2017 with the vision of  “one nation one tax”, it has seen quite some adaptations since then but still lacks in some key aspects.   What was the vision behind GST’s Introduction  It was expected to improve tax-GDP ratio, end tax cascading, enhance efficiency, competitiveness, growth, and ensure lower prices. Many exemptions,… Continue reading “Goods and services tax as an unfinished agenda”

Annual Report on State Finances: The vital third tier

News: Reserve Bank of India (RBI) has released its annual study of state finances. What are the findings of the report? -States’ gross fiscal deficit breached the 3% of gross domestic product (GDP) mark. -Combined revenue deficit of the state governments rose from 0.1% of GDP in 2018-19 to 2% of GDP in 2020-21 because… Continue reading Annual Report on State Finances: The vital third tier

On Union government accounts – Growth spending

News: Union government accounts for Q2 of 2021-22 were released. What does the report say? It showed that the government has a comparatively better fiscal position due to better revenue collection. Total revenue receipts were over 70% of the budget estimate. –Higher nominal growth, will also expand the economy and help contain the fiscal deficit… Continue reading On Union government accounts – Growth spending

GST rationalisation: Challenge and response

Synopsis: A revision of GST slab rates may create some disquiet, but, if cleverly crafted, it could be a game-changer for manufacturing. Introduction Recently, the group of ministers (GoM) was formed by the GST Council for rate rationalisation and correcting the inverted duty structure. The GoM has a very difficult task of balancing a number… Continue reading GST rationalisation: Challenge and response

Health, infra and fiscal stimulus will act as our economic panacea

Synopsis: Health, infra and fiscal stimulus are at the core of the government’s economic revival strategy as they hold significant potential to propel growth. Introduction The covid pandemic and subsequent restrictions, led to never-before economic turmoil of unprecedented proportions, sending most business plans and strategies into near chaos. Hence, the right public policies and a… Continue reading Health, infra and fiscal stimulus will act as our economic panacea

Regaining fiscal balance

Synopsis: The advance tax numbers suggest growth in revenue collection continues to remain strong. However, Central government finances would need careful management. Introduction In the current financial year, the fiscal position has improved significantly and the recovery in revenue collection has surprised many. By July-end, the government collected revenue worth over 37% of its Budget… Continue reading Regaining fiscal balance

A time to introspect: On GST Council meeting

What is the news?  Recently, GST Tax Council held its first physical meeting during the pandemic. It approved various changes. Concessional tax rates on vital COVID-19 equipment such as oxygen concentrators will lapse on Sep 30, while the lower rates on medicines were extended till December. As there are no signs the virus and its variants… Continue reading A time to introspect: On GST Council meeting

Structural changes in GST

Synopsis: Several important decisions taken during the Goods and Services Tax (GST) Council’s 45th meeting in Lucknow last week. What are the important decisions taken during the GST Council’s 45th meeting? Concessional rates for Essential medicines: The council extended concessional rates for several drugs, such as Remdesivir, used to treat Covid-19. It also reduced duty… Continue reading Structural changes in GST

Recommendations of 45th GST Council Meeting

What is the News? The Finance Minister has chaired the 45th Goods and Service Tax (GST) Council meeting. This was the first in-person GST meet since the Covid-19 pandemic. What are the key recommendations made at the GST Council meeting? Concession on Medicines Life-saving drugs Zolgensma and Viltepso used in the treatment of Spinal-Muscular Atrophy… Continue reading Recommendations of 45th GST Council Meeting

There finally seems to be a path forward for GST. Centre and states must strike bargain

Synopsis: After one and a half years of dispute, and with the economy showing signs of recovery, a path forward for the GST finally seems visible. This opportunity needs to be seized What has set back the GST for the past year and a half? Lack of revenues: In 2016-17 the various taxes that were… Continue reading There finally seems to be a path forward for GST. Centre and states must strike bargain

Decoding asset monetisation

Synopsis: Govt recently launched its NMP project. The article throws light on what NMP exactly is and what it is not. Introduction The National Monetisation Pipeline (NMP) is a bold initiative. But we should first understand what the NMP is and what it is not. The NMP is not about the sale of government-owned assets.… Continue reading Decoding asset monetisation

The long and the short of the NMP

Synopsis: Pertinent questions, in the light of the recently announced NMP, have been raised in the article. Questions are related to the impact of NMP on ordinary citizens, whether NMP was the only option before the govt, and whether public sector enterprises are actually inefficient. Background Read here: National Monetisation Pipeline (NMP) project – Explained… Continue reading The long and the short of the NMP

National monetization pipeline betrays narrow outlook

Synopsis: Monetisation of assets to generate value is a step in the right direction, but the underlying problems and challenges that led to underutilization of these assets need to be ascertained too. Proper execution of NMP based on a policy which is refined gradually as per the feedback received is the way forward. Background Read… Continue reading National monetization pipeline betrays narrow outlook

Is monetising public assets a good idea?

Synopsis: Two experts, viz. Montek Singh Ahluwalia (MS) and Professor Ajay Shah (AS), share their views over Asset Monetisation programme of the government. Background Read here: National Monetisation Pipeline (NMP) project – Explained How can govt go about monetising operational assets? Both experts mention ways in which govt can pursue monetisation of assets: MS AS… Continue reading Is monetising public assets a good idea?

The truth about asset monetisation

Source: This post is based on the article “The truth about asset monetisation” published in Indian Express on 1st September 2021. Relevance: Resource mobilisation and Investment in Infrastructure Synopsis: Criticism of the government’s plans to lease out assets to private players, raise resources for public investment, is baseless. Criticism of NMP is baseless Arguments have… Continue reading The truth about asset monetisation

Making NMP work

Source: This post is based on the following articles published on 31st August 2021: Asset monetization mustn’t end up as a Potemkin show – Livemint A monetization move that doesn’t tick most boxes – The Hindu Making NMP work – Business standard  Relevance: Resource Mobilisation  Synopsis: Challenges in the Implementation of National Monetisation Pipeline (NMP) and suggestions to overcome those challenges.  Is asset… Continue reading Making NMP work

It makes sense to extract value from underutilized public assets (On Asset monetisation)

Source: Live Mint Relevance: Resource Mobilisation Synopsis: National Monetisation Pipeline (NMP), should be welcomed. Background Read here: National Monetisation Pipeline Project – Explained, pointwise The Rationale behind Asset Monetisation Additional Fiscal resources for states: Public assets like roadside parking slots, municipal grounds and advertising surfaces and parade grounds of police and defence services remain unused… Continue reading It makes sense to extract value from underutilized public assets (On Asset monetisation)

Government prepares plan to hive off surplus land of PSUs (On NMP project)

Source: The Hindu, TOI What is the news? After unveiling the Rs 6-lakh-crore asset monetization program, the government has accelerated efforts to separate surplus land. The government will soon seek Cabinet approval for setting up a specialized entity (special purpose vehicle, or SPV) to undertake such transactions for state-run companies, ministries and departments. The entity… Continue reading Government prepares plan to hive off surplus land of PSUs (On NMP project)

Fiscal action by the Centre must take over from monetary policy

Source: Livemint Relevance: Importance of fiscal policy measures to promote economic growth Synopsis: Monetary policy has done its part, both through rate cuts and other forms of support, to get our economy going. Now, it’s the turn of India’s fiscal authority to step up efforts to promote growth. What is fiscal policy? Fiscal policy is the… Continue reading Fiscal action by the Centre must take over from monetary policy