Demonetisation to GST - Modi is best at jumla
The white knight in shining GST armour — not to be confused with the red-faced cherubic one in the White House — is here!
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I presume Prime Minister Modi is an intelligent and a perceptive person who understands his country and loves his countrymen.
At least, as a practising politician he is expected to understand that no nation can live on hubris alone; nor can people subsist on a staple diet of rhetoric, bluster and half-truths.
Yet, instead of trying to extricate himself from the debris of broken promises, by either matching word with deed — in what remains of his tenancy — or taking measured steps, he has decided to make a seductive pitch for economic populism, projecting GST as his final crusade against corruption.
The world had got a similar message loud and clear last November, never mind the chaos that ensued.
With that, like the proverbial bad penny, the BJP's "chunavi" black money "jumla" is back in circulation, this time riding with aplomb on the back of GST which is expected to enhance tax compliance and enforce financial discipline.
And this, even though the nation is still fuzzy after the roller coaster demonetisation ride — the other pillar of Modi's peculiar "trickle down economics", the study of which surely merits a lavatorial scholarship.
Clearly, we will all have to now endure two years of carpet bombing and grandstanding on the GST and the ensuing mock fight against corruption. This, in turn, will leave very little uncluttered intellectual space for discussion on issues of actual governance — apparently a sound political strategy for a fatigued nation in the run up to the 2019 elections.
With that, Prime Minister Modi too has carved out for himself a new political construct — positioning himself as some kind of a modern-day Robin Hood. "Those who have looted the poor will have to give back what they have looted,"' PM Modi had asserted before a gathering of chartered accountants, but without going into details of the underlying social contract that he has in mind.
In a beautiful meeting of minds, Yogi Adityanath immediately hopped onto the bandwagon and was doing an imitation of Modi the next day and giving his own rallying cry: "The GST will change the destiny of the poor."
Admittedly, it is difficult to imagine Modi as the "handsome outlaw in green tights" equitably dividing the "loot" among the poor! But in all seriousness, if this is the BJP government's "all-inclusive development paradigm" that the nation was waiting for, then surely we are on the cusp of some kind of enlightened corporate socialism wherein perhaps the "companies will capitalise their profits and socialise their losses".
Or at least the simplistic presumption seems to be that the government will recover from the rich in the guise of the GST — by broadening the tax base — whatever it might have looted from the poor on the pretext of demonetisation, lower interest rates on saving instruments, etc.
An economy that works for all is not a fantasy: The problem is that prime minister Modi likes to be centrepiece of even such an elaborate bureaucratic exercise as the GST, rather than leaving the matter to professionals.
There is an inherent occupational hazard in building such a construct around one's own persona — by patting one's own back for daring to clean up the economy — because all economic fairy tales don't necessarily have a happy ending, especially those that are not based on reasonable growth assumptions.
We are still to get over an urban legend called Swachh Bharat Abhiyaan and cashless Digital India.
All of this may make little fiscal sense to economists, but the layman, given his simplistic assumptions, surely gets into a "hopeful" mode and boards the never-ending merry-go-round. One can imagine his cynicism when he disembarks and realises that his level of suffering has enhanced.
The Modi government, however, leads a charmed life. The party has excused itself once from keeping its outrageous pre-poll pledge that each Indian will get Rs 15 lakh once the slush wealth stashed in Swiss banks is flushed out. The political "jumla" did not boomerang on the party just because none of us really believed that any government can be so magnanimous as to part with even a single rupee.
But this time, due to the overhang of demonetisation, the middle class will be less forgiving because it expects the government to indeed make the GST the bedrock of the new war on corruption. It will not merely be content in taking a vicarious pleasure in the momentary discomfort of the rich — as had happened during demonetisation.
But even if one were to subscribe to the larger GST fantasy, the corporate-friendly BJP regime needs to have a clarity about whether the "loot" will come from the rich or the poor — or both — because the demonetisation had badly hurt the unorganised sector and the farmer.
Also, before there is any movement on ground, PM Modi should also get the Swiss bank monkey off his back; he should at least stop making proud assertions that the deposits by Indian nationals in Swiss banks have dipped to a new low.
That might be so, but the slush money is surely not back in the government coffers. Probably, the money is sloshing in the vaults of Cayman Islands or Panama — and these are not the only tax havens abroad.
Chartered accountants may be both a part and solution of the problem but PM Modi surely is not naive enough to believe that his pep talk will make them change the ground rules for big corporate entities; for them it is always business as usual.
So, either have a tax regime that works for all and an economy that generates both jobs and rising incomes and results in shared prosperity; or be doomed to live in a fairy tale that has no happy ending.