TOI2014 ⁽¹³⁾

Read full article Abstract: If there is one policy reform on which there is consensus, it is the Goods and Services Tax (GST). Yet, as negotiations between the Centre and states reshape this important reform, continuous reassessment is warranted. If we were to implement the flawless GST as originally recommended by the task force of the 13th Finance Commission (TFC), the gains would be immense. The latter had recommended that India replace myriad central and state indirect taxes by a single uniform value added tax on substantially all goods and services. With the combined indirect tax revenue of the Centre and states a tad below 11%, allowing for a handful of exceptions, the TFC taskforce had pegged the uniform GST rate at 12%. Taxation at this rate would mean that the taxpayer would not have to pay an unusually high tax on any single commodity or service. The burden will be spread evenly across different goods and services consumed. The single rate would also eliminate production inefficiencies since it would tax value added at each stage of production at the…

Read full article Abstract: Of the numerous initiatives that Prime Minister Narendra Modi has launched Swachh Bharat Abhiyaan, which would give Mahatma Gandhi the gift of a clean India on his 150th birth anniversary on October 2, 2019, has the greatest potential to transform the lives of all Indians – rich and poor. Sanitation has been the theme of virtually every government in recent times. Prime Minister Rajiv Gandhi had launched the Central Rural Sanitation Programme in 1986 and Prime Minister Atal Bihari Vajpayee the Complete Sanitation Campaign in 1999. But no previous government has shown the resolve and commitment exhibited by Modi. This time it feels real. Till date, sweeping streets and ending open defecation have occupied media centre stage. But equally critical to Swachh Bharat are access to piped water; well-functioning drainage, sewage and solid waste management in all cities and villages; elimination of ponds in which stagnant water collects and serves as host to bacteria and mosquitoes; instilling greater appreciation of cleanliness in all its aspects among the masses. Indeed, taking the campaign to its logical conclusion…

Read full article Abstract: With nearly 150 days having passed since Prime Minister Narendra Modi entered office, we can see silhouettes of the new regime emerge. Although the economy had been at the centre of Modi’s election speeches, social goals and foreign relations have come to occupy an equally important place in his early action agenda – if not even more. At least three initiatives of his government can be potentially transformational. First and foremost, Swachh Bharat Abhiyan is easily the most ambitious step towards improved health outcomes in recent decades. Public health has been a much-neglected area and has been waiting to be tackled on a war footing. With the 150th birth anniversary of Mahatma Gandhi strategically chosen as the target date for conclusion of this campaign, there is hope that government will closely monitor progress, take timely corrective actions and sustain momentum. Second, setting aside near universal opposition from within his party, Modi has decided to complete the Aadhaar project which would give biometric identification to every Indian. Alongside he has launched the Jan Dhan Yojana that promi-ses…

Read full article Abstract: The high-profile launch of the ‘Make in India’ campaign today is a good occasion to remember the development experience of East Asian economies such as South Korea, Taiwan and Singapore in the 1960s and 1970s and China more recently. East Asian economies principally relied on growth in labour-intensive industry and accompanying expansion in jobs at ever rising wages, as the principal means of prosperity for the bottom half of the population. India focused more directly on social protection for workers through legislation, foregoing good jobs and to a great extent growth as well. In the East Asian economies sustained rapid growth of labour-intensive manufacture created well paid jobs for the low skilled and paved the way for the migration of vast numbers of agricultural workers into manufac-turing. As a concrete example, South Korea grew at an average rate exceeding 8% between 1965 and 1985. During the same years, the employment share of agriculture fell from 59% to 25%. Industry and services absorbed the workers so released. Alongside, average real wage rose more than 8% per year.

Read full article Abstract: Complexity of World Trade Organisation (WTO) agreements has meant that much of the commentary on the recent decision by the Narendra Modi government against ratifying the Bali package has been marred by confusion. Officials from most countries and commentators from around the world, including many from India, have nearly uniformly criticised the government for blocking a deal that had taken 12 long years to negotiate. The government and its handful of defenders have argued the contrary, but mostly unconvincingly. Who is right? Contrary to the vast majority of analysts who have uncritically accepted the usual developed country accusation that India has played its conventional role of an obstructionist and a spoiler in the negotiations, the answer is more nuanced and equivocal. The problem India confronts is that the food procurement component of its food security programme violates its WTO obligations. Contrary to common impression the public distribution system (PDS) component, which provides foodgrain at subsidised prices to households, is WTO legal and is not an issue. Under its WTO obligations, the value of subsidy India provides…