Prime Minister Narendra Modi has advocated for India a $5 trillion economy at the Conference of Chief Secretaries without assessing the ground reality in terms of economic developments. The situation is grim. The unaccounted black money stacked in Swiss banks has touched a new level. In 2020 the figure was `20,700 crore, whereas in 2021 it exceeded `30,500 crore i.e. a 50 per cent increase in just one year.
Bank loans worth crores of rupees from nationalised banks have either been written off or the defaulters have fled abroad. No positive steps have so far been taken to recover the amount from them. The World Bank has lowered India’s GDP growth rate to 7.5 per cent for the current fiscal.
The unemployment figure is rising to 53 million as per the current estimate. In this overall scenario the $5 trillion economy is nothing but a daydream.
Kolkata, West Bengal
7.8% Rise in Unemployment Rate a Worrying Factor
The country’s unemployment rate shot up to 7.8% in June with loss of 1.3 crore jobs mainly in agricultural sector, according to data released by economic thinktank centre for monitoring Indian economy (CMIE). The huge fall in the number of jobs in June was triggered by a higher unemployment rate in rural areas, which went up to 8,03% from 6.62 in May 2022. Employment generation is weak in both in rural and urban areas. Therefore, immediate employment generation and income support must take place, for it can boost demands.
Nazeer Ahmed Kazi
Prof. Secab, Vijaypur, Karnataka
GST Remains Underdelivered
India’s Goods and Services Tax (GST) regime completed five years recently. When it came in 2017, it was promoted with much fanfare. Arun Jaitley, the Union Finance Minister at the time, claimed it would boost economic growth by an incredible 1%-2%. However, it has remained an overpromise, underdelivered.
As is now very clear, many of those benefits had been oversold. Far from boosting economic growth, we know that in the years just after the new tax was introduced, the numbers actually fell. Some of this was due to external factors. But there is a good argument to be made that at least part if it was directly due to GST itself because it throttled India’s massive, employment-generating informal sector. Moreover, when contextualised against the growth of the gross domestic product, tax collections themselves have seen only a small bump.
While the government has tom-tommed increased collections, experts have pointed out that much of this is simply due to increased inflation and exports, not higher consumption. The main casualty of this political warfare, of course, will be the Indian taxpayer, burdened with a clunky, highly complex tax system that, given the realities of Indian politics – a factor clean-ignored by the planners of GST – is not going to reform itself any time in the near future. Ironically, India could not even realise the primary benefit of a single tax: simplicity. GST has a bewildering eight rate slabs. The complexity means that with the exception of large, multi-state corporations, businesses have seen tax compliance costs rise.
Mohd Zeyaullah Khan
Jafar Nagar, Nagpur (M.S)