Dear Members,
Open
any newspaper today, and you are bound to be bombarded by news about the
elections. Five states in India: Goa, Uttarakhand, Punjab, Manipur and Uttar
Pradesh are gripped by the fever of assembly elections, and it has spread
across the country. Slated to conclude on 8th March, the nation has
its fingers crossed, tensely awaiting the results.
Ballot ‘box offices’
This
is more so since this election has witnessed record crowds at the ballot ‘box
offices’. Goa tops with 83% polling, Punjab follows with 75% turnout and
Uttarakhand finishes with 65%. The elections are on in UP where the turnout is
over 60% and is yet to start in Manipur. With huge implications at the centre,
parties seem to have gone all out with alliances, rallies, advertising and
social media to sway the masses.
Mumbai
had been dragged into the election maelstrom too. BMC — Asia’s largest and
richest municipal corporation with 91.8 lakh voters decided the fate of 2,275
candidates from 7 political parties as they battled for 227 wards. Alliance
partners BJP and Shiv Sena, now bitter rivals both won voters’ confidence with
82 and 84 seats respectively. With no clear majority, horsetrading is in full
‘gallop.’ Meanwhile, a cartoonist has aptly depicted two potholes celebrating
their existence for another five years… I HOPE NOT!
But
the big question today is that after being urged to cast our vote…what next?
The politicians that come into power more often than not continue to do their
own thing. Five years are seen as an opportunity to indulge in practices which
are ideal examples of ‘form over substance’. From ill-spent public money to
both overt and covert corruption, from being not accountable for promises to
breaking commitments made to voters and from covering up the stream of reason
with that of allegations and excuses. After all, as Jonathan Swift once said, “Promises
and pie-crust are made to be broken.” I believe unless there are some
serious and periodic accountability and appraisal mechanism, we can expect
another five-year ride!
Economic health barometer – Are we really healthy?
On
the last day of January, the finance minister tabled the economic state of the
Union through the Economic Survey. Authored by India’s Chief Economic Advisor,
Arvind Subramanian, the survey has been hailed as a magnum opus on development.
This economic report card is a reservoir of the key statistics of various
elements of the economy and also contains some interesting ideas to make India
better…a lot faster!
The
survey addressed the impact of demonetization claiming that it will be
transitional, with real GDP expected to be from 6.75 to 7.5% in 2017-18. It
also stressed on the importance of quick monetization along with a slew of
initiatives like pushing digitization, bringing land and real estate under GST,
reducing taxes and stamp duties and improving the tax administration system.
In
fact, three exclusions from GST viz. electricity, real estate and petroleum
products reflects the re-thinking on the part of GST Council. It has been
agreed to bring petroleum products into GST ambit after 5 years. A similar
agreement is necessary for electricity and real estate. In fact, by bringing
real estate into GST fold would encourage investment, since real estate
development is a critical part of fixed capital formation.
The
survey, however, was strong in its criticism of the excessive regulation that
continues to plague the agricultural sector. It expressed disapproval that
farmers in many states were forced by an Act to sell only to specified
intermediaries in authorized mandis – thus depriving them of better returns.
Non
Performing Assets in PSU Banks is another cause for concern. At 12% of the
gross advances, this level has choked the credit flow to industry especially
the MSME. This dismal situation calls for some urgent corrective action, like
setting up of a central public sector asset rehabilitation agency to tackle
this growing challenge.
The
survey also proposed a new idea of Universal Basic Income (UBI) for all, in place
of existing welfare schemes and subsidies. In essence, an amount of Rs.7,620/-
would be deposited into Aadhaar linked bank accounts annually which would
drastically cut absolute poverty from 22% to less than 0.5%. The funding for
this UBI would come from recycling funds from around 950 existing welfare
schemes; which add up to roughly 5% of GDP. The survey believes that “UBI is
a powerful idea whose time even if not ripe for implementation, is ripe for
serious discussion.”
Budget 2017-18
This
year’s Budget can be termed as a TRULY UNION Budget – one BUDGET for the entire
Union – as after decades someone thought of discarding Railway Budget as a
separate element of parliamentary business. The Budget gives a DISHA, that will
determine the DASHA of the country in the year ahead. Having said that, we do
acknowledge the problems with the government, politicians and tax laws. It is
always possible to do more and some of it is of urgent necessity. But that
applies to our society too and perhaps to each one of us here. If
transformation and innovation can touch the core of all four – citizens,
government, politicians and tax laws, the positive impact of change could be so
much more that it can be miraculous in its effect. BCAS has the benefit of
Senior Advocate Shri S. E. Dastur for last 28 years for unraveling the hidden
amendments in the Finance Bill. This year was special due to the sheer size of
people taking advantage of his spectacular analysis, in person and virtually.
Rumours are that even the Finance Ministry was tuned in when Shri Dastur was
delivering his speech. I only hope that the Ministry takes into cognizance the
various anomalies pointed out by Mr. Dastur and takes appropriate action. BCAS
had advocated strongly for scrapping the Income Computation and Disclosure
Standards, but was grossly disappointed that the bureaucracy has again won over
advocacy. So we have one more legislation to understand, implement and
litigate. All the best!
The
Finance Minister has announced a new programme consisting of ten distinct
themes which would “Transform, Energize and Clean India” (TEC). This
broad agenda is to be executed through several welfare initiatives concerning
farmers, the rural population, youth and the underprivileged.
To
project India as an attractive investment destination, the budget abolished the
Foreign Investment Promotion Board, exempted FPI investors from indirect
transfer provision and lowered corporate tax for MSME to 25%. Personal income
tax rates have been rationalized and digitization promoted with a ban on cash
transactions above Rs. 3 lakh while cash donations have been capped at
Rs.2,000.
Much
is expected to be achieved while containing the fiscal deficit at 3.2% of the
GDP in FY18, which would be further curtailed to 3% by FY19. This fiscal prudence is aptly reflected in the
pragmatic budget which is bereft of any populist largesse.
Change is welcome
After
a span of 7 years, we again have the President of our alma mater, from Western
Region. My heartiest congratulations to CA. Nilesh Vikamsey and CA. Naveen N.
D. Gupta for their ascension to the coveted post of President and Vice
President of the ICAI. It is all the more proud moment for BCAS that one of our
core group members is now the torch bearer of this esteemed profession. CA.
Nilesh Vikamsey, as we at BCAS know him can be described as a person committed
to excellence, massively innovative and wears passion for the profession on his
sleeve. I am reminded of a quote which CA. Nilesh Vikamsey aptly follows; “Leadership
is action, not position.”
Through
this message, I would also like to convey to the torch bearers of the
profession that we at BCAS are always at the forefront to take up the cause of
the profession and ICAI can very well bank upon us to further the cause of our
profession.
Warm
Regards,
Chetan Shah
