Economic Times ⁽²¹⁸⁾

Modi could follow the model he himself pioneered in the Special Economic Zones in Gujarat back in 2004.Read full article In what is arguably one of the boldest reforms in the last 20 years, finance minister Nirmala Sitharaman has cut the effective tax rate on corporate profits from approximately 35% to 25.2% for existing domestic companies and 17% for new manufacturing companies established before October 31, 2023, provided the companies take no exemptions. For existing companies, the tax rate is now below or equal to those in Japan, South Korea, China, Indonesia and Bangladesh though higher than those in Taiwan, Thailand, Vietnam and Singapore. For new manufacturing companies, the tax rate equals that in Singapore but is below those in all other countries just named. By putting an end to exemptions, the government has greatly simplified the corporate profit tax system and thus eliminated numerous sources of bribes, harassment and tax disputes. Provided the government does not let exemptions slip back into the system, it would have limited future tax disputes to reporting of revenues and costs. Tax inspectors will no…

As minister of corporate affairs and minister of finance during the first term of Prime Minister Narendra Modi, Jaitley piloted two of the most important reforms — the IBC and the GST.Read full article When Arun Jaitley spoke at Columbia University, which he generously did on multiple occasions, introducing him was a challenge. So distinguished was his career, and so long the list of his accomplishments, that I always feared that my introduction would run longer than the main event. In writing about Jaitley today, I face the same challenge. There is no way to do justice to his accomplishments in the available space. He was India’s leading politician who served with distinction in government as well as in opposition. He was a formidable lawyer, a great communicator and, above all, a true human being who would extend a helping hand to anyone who he thought might need it.

Read full article India’s GDP has grown at an annual average rate of 7.5% during the five years ended 2018-19. This average figure masks considerable variation in the annual rates, which peaked at 8.2% in 2016-17 and bottomed out at 6.8% in 2018-19. In the quarter ended March 31, 2019, growth fell to the worrying level of 5.8%. According to most reports, recovery in the growth rate appears sluggish for now. Some commentators point to demonetisation as a key trigger that led to the fall in the growth rate. But proponents of this view have provided no credible supporting evidence. Given that demonetisation took place in early November 2016, its impact should have been concentrated in 2016-17, which is not the case. One may invoke the argument that the effect took place with a lag. But given the instantaneous nature of the event, absence of any perceptible immediate impact greatly undermines the validity of the argument. According to another hypothesis, introduction of the goods and services tax (GST) and the disruption accompanying it were responsible for the decline.

A mission to provide eyeglasses can pave the way for large-scale manufacturing and raise productivity.Read full article Today, poor vision, due to lack of access to eyeglasses, is easily the largest unaddressed disability in the world. In India alone, 550 million individuals are estimated to suffer this fate. Given that eyeglasses cost as little as Rs 200, correction of refractive error through eyeglasses constitutes the health intervention with the largest bang for the buck. The commonest eye problems result from refractive error due to which eye is unable to focus clearly on an object. The result is hyperopia, presbyopia, myopia or astigmatism. Loosely speaking, these conditions are about the inability to see objects clearly up close (hyperopia and presbyopia), far away (myopia) or both (astigmatism). The commonest condition is presbyopia, which is age-related and affects a majority aged 35 & above.

This is a budget that, despite the temptation and a good enough excuse, doesn’t stray from the Modi government’s agenda to maintain fiscal discipline.Read full article As an economist, I am grateful that the PM hasn’t given up the path of fiscal rectitude. Rejecting calls by the ‘stimulus school’, the final budget pegs fiscal deficit for 2019-20 at 3.3%, down from the revised estimate of 3.4% for 2018-19 and 3.5% of actual level in 2017-18. Growth has been sliding down for the last four quarters, and it fell down to 5.8% during the last quarter of 2018-19, the latest quarter for which we have GDP estimates. There have also been reports of a slowdown in both private consumption and private investment. So, the temptation, as well as a good excuse, to go to town with spending was there. But the PM, who has fought hard for an unprecedented five years to restore fiscal discipline, has stayed course. While closer scrutiny will have to be done in the days to come, GoI has also continued to maintain a high quality of…