The Aiyar saga

Aiyar’s “neech” remark is famous now. Perhaps it will exceed his “chaiwala” remark in terms of popularity and impact. Time will tell. Be that as it may, what do we take away from this episode?

  1. The liberal cabal still controls the narrative. Oddly and sadly even the right wing media follows suit. Such is their power. Look at the entire focus on how “BJP will take advantage of the remark” line plugged by nearly every mainstream media “journalist” known for their loyalties to the Janpath crowd.
  2. Interestingly when someone from BJP (however junior or inconsequential) makes a wrong remark, there is no such talk of “Congress taking advantage” because the exact same “journalists” are busy taking advantage of it on behalf of the dynasty! The obscure village level functionary will be elevated to “senior leader” and the remark will be traced all the way back to Modi, BJP, RSS, Golwalkar, Savarkar, Brahmanism, Rig Veda and what not. The broadest brush and blackest paint will be used.
  3. This actually closely mirrors the situation in the US. Trump “takes advantage of slip ups and genuine errors by media” but “Fake news” affects Hillary & the dems. Not the other way around.
  4. Once RG “acted”, the usual media courtiers like Swati Chaturvedi went on overdrive praising him for his “decisive” move!
  5. Rahul Gandhi had no choice but to “act” against Aiyar. He had three reasons to do so – NONE of which were raised or acknowledged by media.
    1. First is Aiyar is a man totally without a constituency anywhere in India. He may not get 10 votes in his name. So swatting him like a cockroach is an entirely all gain no pain affair.
    2. Secondly, elections in Gujarat are being fought by Congress not on their 60 year track record or alternate policies and economic ideas but on caste. That leaves very little room for inaction.
    3. Thirdly, the action is a natural damage control exercise forced by circumstances. No proof required other than the fact that the same Aiyar had insulted so many in the past with crass language and did not pay for it. That probably emboldened him.
  6. Should Modi have ignored the remark? After all he is a politician and Aiyar had already “delivered” once in 2014. So he will be foolish indeed to reject the gift offered on a platter.
  7. Who is to blame? We have to blame the so-called liberal media and the Lutyens fake intellectual ecosystem. Which always had double standards. Anything said against Modi however crass, insensitive and crude, was “intellectual criticism” or “Freedom of expression” but even mild criticism of the royal family was “fascism”.  Naturally leaders like Aiyar get carried away and think they can get away with murder and still be protected by the liberal cabal.
  8. This was OK in the days when their control over narratives was total and there was no social media. And Modi ignored such remarks and never hit back.

Times have changed!

Padmavati row

Let us keep this short and sweet. Here are our views

Leftist charlatans, hiding under rocks when Tasleema and cartoonists needed them, have crawled out in large numbers to defend the movie.

Leftists seem to focus on the fact that historical records on Padmavati are sparse or non-existent. This hardly matters. Customs and beliefs of most religions, if not all, are a mixture of facts, beliefs and oral or unverified traditions. Even if Padmavati is entirely fictional, what matters is millions of Rajputs and others believe in her sacrifice.

Then there is this fallacious argument “There are too many versions so why object to one more?” But this is not unusual in a subcontinent size country where oral traditions have been the norm. Those versions were not created to make money or to insult the earlier versions and traditions or for that matter with political agendas in mind.

Then there are the usual leftist rants on ‘patriarchy’ etc which we don’t even bother commenting about! Horrendous suggestions that Padmavati (as well as Yazidi victims of leftists’ bosom pals aka ISIS) should have allowed the rape and conquest to proceed instead of dying, have been made by the left cabal well known for its own rapist savagery and other crimes against women right from the days of its founding in Russia and in India too.

Once leftists got the music going a whole bunch of corrupt yellow media agents of Congress got into the rhythm, attacking BJP for the usual “freedom of expression”, “Idea of India” and other such fundamental rights.

What they conveniently overlooked and deliberately played down if not blacked out was the unpalatable truth that, good or bad, violent or otherwise, the protests against Padmavati were not just from political right. It cut across party lines. Even prominent Congress leaders, including its CM in Punjab and its ally Laloo Prasad have rushed to support the protesters! Many SP, Congress leaders joined in the violent actions, verbal or otherwise. But this is not convenient to the dynasty-left continuum’s narratives so the mainstream yellow media that controls the “Idea of India” narrative naturally didn’t want to talk about it.

All said and done, we think the movie should be allowed to be screened, provided it doesn’t show the queen dancing or singing songs with the cruel Khilji who wanted to rape her. That is not freedom of expression that is insult to all women. As one intelligent observer pointed out, that’s like shooting a movie showing rape victim “Nirbaya” dancing with her rapists. But then this has been Bollywood’s standards. Anything goes, if it fills coffers.

And unlike our media charlatans and fake intellectuals of left, we condemn ANY threat of violence against ANYONE including Deepika and the producer or director by ANYONE.

 

 

 

 

 

GST – Phase 2

We know how things work in India – you try to spend years, often decades in a vain hunt for the holy grail of any law or reform move. By then costs mount, direct and indirect, but who cares? Because the poor beggar whose son grows up to be a beggar & is doomed to poverty all his life will not connect his misery to delays in implementing GST or getting that airport built.

But then after all this delay, finally when things get done, they don’t show the perfection expected of such long effort. It as if Kamal Amrohi spent 20 years making not Pakeezah but some usual Bollywood masala trash. This is because the exact same issues that kept the process tortuous have not vanished but have simply resulted in compromises and optimisations that almost manage to defeat the purpose.

Strangely, all of the above applies equally well to other divisive democracies with distributed powers like USA. But then they are rich and can do with lousy healthcare law or Sarbanes Oxley sort of nonsense but we cannot afford to do so.

As far as India is concerned, this is true whether Congress, BJP is in power directly or through messy coalitions.

But then the mere fact that reforms get done in of itself is a major achievement that cannot be underplayed. In fact, that is the only way things can get done. You can wait for perfection another 20 years, and it aint gonna happen.

That is the story of GST too. We cannot stop congratulating and thanking Jaitley, Modi & Co for getting it done. No mean achievement.

What next?

But having done that and benefit of hindsight what else can be done? After all the present law is merely a first step in a long journey.

Arvind Datar and Vaitheeswaran (Indian Express, 28 Sep 2017) have written an excellent piece on this topic and instead of the usual nasty sarcasm, useless criticism and agenda driven venom that passes for journalism in India these days, have given sensible suggestions that is almost a to-do list. Hats off.

Similar sentiments were expressed in our earlier article on this topic – link here.

Adding to the excellent to-do list mentioned above we would suggest the following

1. Get contiguous BJP ruled states to go whole hog and include petroleum, real estate and whatever else is left out into the GST net. That is almost all of India these days! This creates competitive pressure on rest to reform or literally perish as businesses votes with their feet. This is a lot faster than arguing with megalomaniacs and anarchists like Mamata Banerjee & Arvind Kejriwal who will never agree to anything sensible just because it came from Modi. We say contiguous because goods can freely move (with necessary input credit) without having to cross a non-compliant state.

2. Announce that for the first one year, there wont be any penalties (beyond recovery of tax due) on anything other than wilful and wanton tax evasion, that too narrowly defined and clearly listed out.

3. Give taxpayers option of accelerated refunds with the condition that should they prove to be cheats, the law will come down on them like a ton of bricks. Yes, this may expose the revenue to some risks but the benefits will be considerable too. Known offenders, tax defaulters can be left out.

4. Go easy on minor delays in filing other returns such as Company Law, Income Tax etc. because the same bunch of people (Accountants, CAs etc) that are busy decoding GST also are responsible for those tasks and must be tired and exhausted. Remove useless returns, forms, filings that waste time and don’t bring any benefit to any stakeholder. In fact a general amnesty in that direction announced ahead of time is a great PR move and costs nothing.

5. Study the GST credit system of Singapore where ordinary poor (by local standard) taxpayers were given money for first year or two. Nothing works like free money to soothe irritated public mood. It need not be substantial but should not be trivial.

6. Make small but effective steps towards single rate, each month, every month. No need to wait for big bang reforms and endless arguments. Perhaps a good start is Pistachio, Cashew, Almond and Walnut all of which have different rates as one wag pointed out!

Reform is not easy. But rewards can be huge. Indian voters have shown this many times.

 

 

 

 

 

Fixing the “slowdown”

To anyone seeking a masters degree in left propaganda yellow journalism, Indian “liberal” media and its constantly shifting narratives offer a practical course that no University can provide. That too free of charge! Pity they don’t issue a certificate upon completion.

You may recall the concerted campaign mounted hardly 6 months back about “manipulated statistics” & “cooked books” that made India’s GDP growth more than what it “really” was. Of course, it was all laid at the door of Narendra Modi who, we were told is doing this to hide his many failures. No amount of explanation by professional statisticians in the government (none of whom were appointed by this regime) mattered. While some genuine economists had genuine questions about changed methodology etc (which are never static), it was mostly propaganda noise by faithful media warriors of the left + Congress continuum that reached high decibels.

Now once the govt announced that growth slowed to 5.7% in the latest June 2017 quarter all this talk died down and vanished like a ghost. In its place another narrative – that India’s economy is in a “tailspin“. It is no one’s case that economic growth is doing fine but surely tailspin is not the most appropriate word for a rate of growth most developing countries will happily report? Apart from the tailspin narrative, it was all talk of gloom and doom and what Modi should or should not do to stop this free fall that was a product of his own miscalculation.

Arvind Panagariya, until recently Vice-Chairman of the NITI Aayog (whose departure created yet another wave of senseless speculation and innuendos), wrote a brilliant article for TOI advising caution and putting the numbers in perspective. All was not lost and there is no need for desperate measures. Other op-ed writers including the likes of Mihir Sharma who is not exactly Modi regime friendly echoed the same prescription (not to loosen purse strings at cost of fiscal stability) but of course differed on the cause and magnitude of the problem.

In this context what should be the “common sense” approach for the Modi sarkar? We summarise them below.

  1. There’s lots of low hanging fruit in the ‘ease of doing business’ department. Most of them do not need ANY legislative change, just mindset change. PM Modi should ask each of minister to abolish just 1 form or return each week. We have mentioned this earlier, but any SME that chooses to incorporates itself into a Pvt Ltd company files a lot more returns and faces tons of paper work that companies in Malaysia or Singapore don’t face at all.  Among other negative effects, this (plus various other reasons) forces Indian startups as well as established companies to setup holding companies there and raise funds in Singapore instead of India!
  2. A give and take approach to labour law reform. Unions can be asked to tick off reform measure they will approve happily in exchange for benefits and facilities that they need and is fair. Implementing incremental changes in India is lot easier and better than “boil the ocean” types that take decades. Not only that within existing bunch of labor laws one can be 400% sure, as Musharraf would say, there is scope for procedural simplifications, speed up of decision making etc that will keep things going and can make a major change.
  3. That brings us to the next topic – speed up the administration. We in India always think of constitution changes, major laws with draconian clauses etc to fix problems for which much simpler solutions are available. Even if a particular law or Act requires ten steps, where one would be adequate, there is NOTHING in any Act that says don’t do them fast and in fair manner! What is stopping successive regimes from simply cranking up the motor? It is here that Modi has, in our opinion, failed to make a major difference.
  4. To give a simple example, opening a restaurant in USA or Germany or even Singapore is not easy. It may require permits relating to Fire, Food safety, Workers welfare and safety, Building Code, Hours of business, Parking etc from many departments scattered over local, federal and state levels. But the key difference is, at each of these places, rules are transparent, fair, available and accessible and one doesn’t have to bribe desk after desk to move papers. So what is desirable and quicker? Amending or integrating 100 different laws (as our labor Ministry is trying to do) fighting through a thicket of resistance from entrenched babus and the ‘system’ or simply looking at implementation speed and fairness of process?
  5. Bypass the banking system to provide funds where it is really needed, perhaps through existing or dedicated development bank. This can be done for quick win projects that create jobs. Again quick to do while debates about who takes the hair cut and how much can go on for another 20 years in the regular banking system. In fact, there are even doubts if private businesses are keen to borrow and spend on capacity even if funds were available on demand until existing excess capacities are taken care of.
  6. Go easy on harsh and punitive measures particularly in relation to GST. The last thing that one wants is depressed sentiments and fear psychosis caused by overzealous and often corrupt bureaucrats raiding and destroying genuine businesses because there are “errors” in returns that no one understands. There is time and place for that kind of measures.
  7. Get more funds from rich friendly nations on soft terms like the one for bullet train project – but for spending on projects that create immediate jobs, kick start consumption and give booster shot to the economy without wasteful expenditure. Japan, Saudi/UAE (but not Beijing) and others that work on government to government levels and who have already promised cooperation are obvious targets. This is far better than borrowing domestically that crowds out others and pushes up rates.
  8. Go faster on reforms that stir the pot and send the right signals but do not bog down the entire government with lots of resistance. Air India is one good example. There are dozens more. Speed of action is of the essence here, without compromising on transparency. Extensive land reforms can wait for Term 2 for precisely same reason. Plus they don’t give results for five or more years. Correspondents of Financial Times and Washington Post do not vote in Indian elections.
  9. Fill up government posts where new recruits are put to productive use. This not only makes electoral sense but is also eminently do-able given the shortfall in many critical areas. Delivery and governance are suffering even as excess staff who cannot be re-trained or re-deployed act as drag elsewhere.

Hope the next few months are full of action that will show results by early 2018 because it may be too late if results come too close to 2019 May. Just check with A B Vajpayee!

 

 

 

Smart Prohibition for Bihar – a suggestion

Nitish Kumar imposed prohibition on Bihar soon after taking power. To be fair to him, most Indian political parties have dabbled with this silly concept. Some like hypocritical megalomaniac Kejriwal promise one in Punjab but increase liquor outlets in states they rule!

But Bihar’s laws are draconian including horrendous provisions like punishing entire families for liquor found, sometimes entire villages. Fines and penalties are so high even rapes and murders are less taxing. Even in best ruled countries this only leads to corruption. In Indian context, even in best managed states it will open doors to horrible corruption. In Bihar it leads to mayhem.

The arguments in favor are silly. Productivity gains, health gains, “family peace”, increased spending on household expenses are all pushed as miracle gains from prohibition. All are based on dubious statistics. Productivity in Asian societies that share similar cultural DNA like India – Thailand, Malaysia etc are far higher and they are not killing each other or beating wives. We cannot compare ourselves to oil rich Arab states that will have foreigners lining up for its wealth even if they slap each visitor at the immigration. We are bench-marked with our near neighbours.

In fact, Bihar cannot even compare itself to richer, more developed states like Gujarat and say why not us. It is a laggard and it has to run faster, try harder to attract jobs, investments.

Unless country-wide prohibition is imposed, something that will render India a Talibanic pariah state that no sensible investor will visit, it also means Bihar ends up losing investment, jobs and reinforces image as lawless poor state.

Ironically, booze continues to flow to those that are most harmed by moonshine – the poor. And cops get richer. Many die horrible deaths or go blind due to methyl alcohol and other poisons. But a responsible, decent citizen or tourist or visitor cannot have a chill glass of beer after a tired day at work.

Even if the policemen and officials are not corrupt, they spend inordinate amount of time implementing these draconian laws under pain of being punished themselves by whimsical politicians. Time that is better spent bringing Bihar up to par with rest of the country and India comparable to rest of Asia.

This is the net effect of prohibition.

But as a CM, Nitish has to protect vulnerable women, even if they are not a vote bank. And it is true that many Indian working class men, particularly in countryside, spend bulk of their daily wages on booze and return home drunk to beat wives and deprive children of decent food and education.

Is there a mid-way?

Yes. That is where technology comes in. Why not Aadhar backed record for each liquor purchase?

Once implemented, this can track excessive liquor spend and let state as well as NGOs and others focus on where the trouble is. If someone spends too much on booze he can be asked to account for the income.

Ban orders can be imposed on any individual with police record of domestic violence or abusive behaviour after drinks. Family (wife) can seek ban orders with sufficient evidence. In fact a similar system exists in Singapore for casino gambling. We could not do with without individual identity system and now Aadhar enables that. That and technology that is cheaper and easier to acquire.

Drunk driving should be punished so severely that it should not be an option for anyone other than suicidal maniacs. Because this is murder.

You may say people may still drink moonshine. Yes. But moonshine becomes unprofitable when official market exists for liquor that attracts 90% of genuine responsible drinkers. They will shut down or go down in number.

You may say people can cheat (buy on others’ Aadhar card etc) but such people are also the ones that drink excessive or misbehave in all likelihood, so they can be trapped and punished for their actions.

Please do consider this.

 

 

 

 

 

Beware of Nitish Kumar

So it has finally happened. Nitish Kumar has ditched Lalloo and joined forces with BJP again. Whether or not that means formal NDA re-admission remains to be seen, especially outside of Bihar.

But is this good news? If one were to go by despondent articles & tweets by dynasty’s loyal media servants (aka secular, progressive liberals) it seems their chances of enjoying happy days of UPA loot when money & “investments” flowed like water, awards and gigs were for the asking are slimmer.

But we don’t agree it is all good news for BJP. Why? Before we get there, let us talk a bit more about the development itself:

No one believes his Lalloo/Tejaswi-corrupt-refuses-to-resign script. That has been known for years now. They did not turn corrupt yesterday. Interestingly all those journalists like Siddharth Varadarajan take special pains NOT to talk about the corruption at all as if that is blasphemy. No picture so palatial malls, mansions & petrol bunks.

The entire “liberal” media focus is, instead, on “scripted show”, “BJP gains”, “blow to secularism” and other topics all of which were emphasised to avoid discussing the elephant in the room – Shameless plunder and enrichment of self & family by LPY. Mind you, this is well beyond the usual fund raising for elections & enjoying free plane trips which everyone does.

It was as if corruption is a necessary price to pay for “secularism” whatever that means. And we all know the Stalinist left’s definition of “secularism” – rabid anti-Hindu venom, support for jihadi terrorism, Islamist fascism.

We even had this pathetic tweet by so called independent journalist Wagle which is what you would expect from a low level sycophant of the dynasty like Aiyar or Jha. As if only BJP created the problems listed & it was a land of milk and honey otherwise.

No doubt this is a blow for Congress and Rahul Gandhi. And to the Marxists who were hoping for UPA3 to give them power without responsibility ala UPA1.

It is also a serious blow to Arvind Kejriwal – a man corrupt yellow media elites dropped like hot potato after hoisting him sky high with lots of hopes. Again they were licking palms in anticipation of his quick rise to power and Wapsi of awards and rewards to the “Idea of India” left brigade. Kejriwal’s bride aka anti-corruption plank hijacked twice – once by Modi and now by Nitish!

But let us come back to the main point of this article. Does this benefit BJP? The answer is not so clear. That’s why we say

Beware of Greeks bearing gifts
  1. Nitish is trying to embed and carve out his image of anti-corruption crusader. Not just in Bihar (where he doesn’t really need that, even in 2019 or 2020) but nation wide. That plus the anti-liquor goody goody image are his only USPs. The second one is actually a crowded field with too many anti-liquor contenders.
  2. This can come back to bite the BJP if he plays his self serving cards again like he did on 25th July. For example, he could pick a random case of “corruption” in NDA cabinet in the Center or in one of the states. And quit over it no matter if charge is fake or real, when he feels jumping back to Congress or Lalloo bandwagon makes more sense for him!
  3. What can the BJP do in that case? After all, they have also certified his anti-corruption image? Yes they can sacrifice that particular minister but that will only feed the fire, not quench it.
  4. He could also become another Shatrughan or Yashwanth Sinha –  relentless headline seeking sniper from within. Modi cannot ask him to get out and have him play the anti-corruption + martyr card. The media would have a field day.
  5. Of course, Nitish Kumar’s credibility will fall even further should he ditch Modi & BJP once again on flimsy grounds. Or for that matter his credibility is so low & he is seen as a political chameleon by so many that his very endorsement of an issue may reduce it to a farce even if genuine! That is probably what Modi & Shah duo are hoping?
  6. BJP will probably have to kiss goodbye to winning Bihar on its own steam in 2020 and on top of that sacrifice LS seats in 2019. If the south does not make up for inevitable losses in the North (after all you cannot do better than 100%), then he becomes even more of a risk post 2019.
Can Nitish be a force for the good?

No doubt we have all turned cynics perhaps by the way politics works in India. But then there are possibilities of this alliance working for India’s and NDA’s good. How?

  1. Nitish can blunt the anti-Muslim edge of BJP and perhaps force some sort of mutual rapprochement. His counsel, both public and private could be valuable if only BJP seeks it out and follows them. This can only be good for the nation. After all, once Muslims (or substantial chunks of them) are convinced Modi / BJP are not the demons they are made out to be, especially if you vote for them, lots of other things will change for the better.
  2. He can also bring economic pragmatism and right of center reform credibility to the cabinet which is short of talent. Of course, he cannot join it himself but can pick good men to represent him and guide them if JD(U) were to join the Union cabinet.
  3. He can reduce BJPs paranoia over inevitable losses in the Hindi heartland and in that process moderate some of their more polarising tactics to entrench Hindu support. Again it can only be for the good of everyone.
Why did he do it?

Let us finally turn to the question we should have addressed first – why did he do it? Certainly the Tejaswi drama is a smokescreen. What gives?

IOHO, it is the realisation that the best he can hope for is to be another Gujral or Gowda in 2019. A pitiable existence no proud, sensible leader with self respect would want. And the more realistic prospect is loss in 2019 + 2020. And the worst case scenario of dynasty + Lalloo dumping him mid way so they can build more malls without any let or hindrance.

Comments welcome!

 

Amazing power of anti-Modi track record

We have heard of mythical herbs that can bring the dead back to life and cure the incurable.

But have you seen them in working like magic with your own eyes in the modern world?!

Yes there is! Once you accumulate enough points, like frequent flyer miles or credit card spend, you become immune to anything.

No sections of the Indian Penal Code or moral code will apply to you! Incompetence is no barrier to lifelong well paid jobs!

That’s the magic power of anti-Modi track record.

Yes!

We know how liberal poster boy Tarun Tejpal tried to dub his roaming fingers molesting a poor young journalist in a lift as “BJP conspiracy”. And therefore he should be allowed to “lacerate himself” in some nice bar over a cool beer instead of going to jail for attempted rape

We also know Lalloo Prasad Yadav and his family becoming magical millionaires owning flashy malls, petrol stations and other property calling their prosecution “fascist attempts to stop him”

Now we have leftist journalist Nikhil Wagle who spends all his waking hours attacking BJP & Modi claiming he has been booted out for his “fighting journalism”. The truth appears to be more prosaic – incompetence and the inability to attract audience, a must for any aspiring anchor or journalist!

Of course we have the Paranjoy Guha Thakurta going around telling us he has been thrown out of EPW for his daring to question Adani, who is supposedly “close” to Modi (although like most businessmen Adani is no fool and is also close to Marxists and Congress – just see how he was received in Kerala).

Oddly enough the team that threw him out are also died in the wool hardcore leftists. Or they would not have gotten into EPW management in the first place!

So a bunch of leftists throwing out a fellow traveler for writing an article that reads more like propaganda hit job than “investigative journalism” is also blamed on Modi, BJP and the mysterious “stifling climate for dissent” One that sees new media startups blossoming almost each week, most of them spending 80% of the time attacking Modi. And the other 20% loudly complaining they are not allowed to criticise him!

So here is your clue – if you are planning anything interesting – be it petty misdemeanor, incompetence on the job or full fledged rapes, loot, dacoity and anything else under the sun, be smart, try build up a anti-Modi track record.

The entire “liberal, progressive” cabal will jump to your rescue!

 

 

Boycott Chinese Products – smart or counterproductive?

Recent developments in India’s North East border involving China have given a rude jolt to many Indians. Although the standoff is still not over and always carries a risk of armed conflict, it may end up doing some good in the long run. Why? Because it has brought into sharp focus a few things:

  1. China’s overwhelming military superiority and India’s slow pace of catching up.
  2. China’s economic prowess that underwrites this military superiority
  3. How we have allowed Chinese products to control the Indian market and even every aspect of our daily lives.

Domination of Made in China

It is not just in India, even in Singapore, Dubai, London, Chicago or anywhere in the world, chances are 80-90% of the items you find in a typical departmental store are made in China. Other than vegetables and groceries, entire categories of products, shelf after shelf, are seemingly not manufactured anywhere else.

This domination took many years to achieve and has left in its wake closed factories, destroyed communities and devastated lives in many places. Given its scale and volumes, China will probably continue to do so and perhaps India is the only country in the world that has the capacity to challenge this domination. If only it takes decisive steps.

It is in this context that we have to take a look at #BoycottChineseProducts campaigns waged in social media as well as elsewhere, in India.  In fact popular legislators like Baijayant Panda have endorsed this.

https://twitter.com/PandaJay/status/888731188700958720

While it is good to see Indians waking up to the threat from dominance of Chinese products, we have to question if such boycotts are the real solution.

  1. Many products, as we mentioned earlier, are simply not made anywhere else. Laptops, Mobiles are good examples. While some are indeed made in Japan or Taiwan, these are the high end ones that may not be sold in India. Even they have components made in China! This makes any “boycott” impractical.
  2. Flood of Chinese products has of course, affected some traditional manufacturing but these have also given a kick start for technology upgrades, quality improvements and design changes to stay in the game. Aligarh locks, Sivakasi fireworks, motorcycles, pens made in India have all managed to survive and fight back. This can only be good for us.
  3. Although some jobs are lost, cheaper imported products help keep inflation low and enhance the purchasing power of anyone that is not directly affected. Therefore, overall the economy benefits.
  4. Attitude changes take longer, but is already happening. Instead of seeing businessmen and factory owners as “class enemies” to be fought to death, workers are slowly realising how global competition works and how it impacts their rice bowl. This means working together with their bosses to secure both their futures. The decline of Marxist militant unions that killed Indian manufacturing to benefit China both directly and indirectly, has to be seen in this context.
  5. Officially it is very difficult for any ruling party to be seen as too close to such boycott campaigns. China has been very clever in organising such boycotts whenever some human rights or other issue is raised by Western countries or Japan, Korea etc offend its “pride”. India has to learn this trick too. Plausible deniability is the key. We Indians are too clumsy and noisy in general to do such sophisticated campaigns and yet deny them without batting eyelids!

Better focus on Make in India

At the policymakers’ level, India should use this upsurge in nationalist sentiments to boost manufacturing in India. Tougher reforms including labour related ones, are easier to sell if positioned carefully.

For critical products such as mobiles and semiconductors, the entire supply chain has to be built up, brick by brick. This takes years but it is a good idea to take baby steps and monitor progress at highest levels.

India should also work closely with Western and Japanese, Korean companies often target of vicious boycott campaigns in China, to invest more in India and spread their risks. Recently Hyundai and other Korean firms bore the brunt of such campaigns.

For products that we can and do manufacture, often with better quality, imports from China has to be discouraged. Given WTO and other obligations, it is hard or even impossible to do officially. This is where public consciousness can play a role. There are dozens of such products – domestic appliances, garments, locks, plastic decor items or festival lighting, Ganapathy idols(!) and so on. But this cannot be a license to shady Indian manufacturers to push shoddy goods at higher prices.

Those in the know should highlight laws, rules and procedures that come in the way of Make in India and the government should proactively remove them. By any global benchmark, doing business in India, particularly for SMEs and micro enterprises, is still horribly complex, unproductive and stifling.

The wake up call given loudly and clearly by China’s over aggressive media, amplified by its allies in India should be used to our advantage.

Your comments are welcome!

 

 

 

Surat textile strike against GST

Surat is perhaps India’s largest textile manufacturing as well as trading center. It is in the state of Gujarat which is BJP as well as PM Narendra Modi’s stronghold. In fact Modi as Gujarat CM resisted GST because it is one of India’s “producing” states and GST, being a consumption based tax, is favorable to “consuming” states like Bihar or UP which have very little manufacturing but huge populations.

As we have highlighted in our earlier article, GST, in addition to bringing large parts of underground economy into the open, also facilitates better Income tax compliance. Once dealings are recorded, tax evasion, not just of GST but even other taxes like Income Tax, becomes that more difficult.

And everyone knows that while the salaried class and even large sections of organized business sectors pay taxes and have less means of evasion, the small and medium sized traders that dominate the textile sector carry out their entire business in “black”. This means not just no sales tax or very little, but no Income tax.

It is to protect this illegal and damaging modus operandi that Surat based textile traders went on strike soon after GST was implemented. Markets were shut down for weeks and blatant threats issued to BJP that they will “pay” in votes should they not be allowed to continue with their tax cheating ways.

This article in Indian Express explain the motives quite clearly.  “Traders readily concede most of their business was “unaccounted” in order for them to avoid income-tax”. Here is another article that narrates how a nosy Excise inspector was thrown into the boiler!

In fact this strike has been one of those rare highly publicized cases of post GST disruption and troubles. In fact, anti-Modi rags like Wire were reduced to playing up this strike, for want of “better” news. This article, full of hyperbole about the negative impact of the strike in terms of livelihood etc., surprisingly completely omits the tax evasion aspect of the strike, which is in fact its main trigger!

Of course, one can readily imagine how Wire would have played it if Congress or CPM was in power. The strikers would be labelled Sangh parivar fascists who are looting the poor and deserve still jail terms!

Arun Jaitley and Narendra Modi should take up this gauntlet thrown by Surat traders head on. The workers affected by this senseless strike should be helped to tide over this difficulty as well as educated on the real reasons behind this strike. While their daily purchases are taxed, it would be cruelty if their masters don’t pay any tax on their much fatter earnings. Our socialist warriors and their propaganda mouth pieces that shed copious false tears for the “sub-altern” instead of highlighting the real story, choose to fish for anti-Modi sound bites instead!

The strike also highlights how entrenched corruption, cheating, tax evasion is in India to the extent where they become “rights” for which open agitations can be launched.

Genuine and reasonable demands, such as extra time for filing returns, simpler paperwork, protection from corrupt officials etc., can be and should be provided, of course. That is no excuse to demand complete exemption from tax laws of the country.  As the FE article cited says quite clearly “If the government stands firm, this protest will fizzle out ultimately. But if it budges, it will encourage similar elements in other industries as well,”

Jaitley sahib it is your call!

 

 

 

GST a game changer for sure

Let us come straight to the point! Why do we say this?

Many countries implemented GST. It is not as if their economies were magically transformed. But then each one does so for their own reasons and have their own unique circumstances.

For Singapore (to take one example), it was the desire to reduce Income taxes and yet retain revenue buoyancy. This was a key USP when it competes with the likes of Hong Kong where taxes are lower. Prior to that, Singapore had no taxes on sale at all, barring sin goods.

For India, the key benefit is reducing tax evasion and bringing almost all economic activity into the tax net. Perhaps no other country implemented GST with an economy like ours where most activity is outside of the tax net.

This is why it is going to be a game changer. Nothing else (imperfect rates, complexity, too many forms, returns blah blah blah) matters. Just this one factor alone will more than justify these compromises and sub optimal choices and bargains to get the thing going.

Right now most small traders don’t pay any tax. Nor do they issue any receipt. This means their entire income is “black”.  This evasion cascades up and down the supply chain – the trucker who delivers the items, the landlord who collects rent, the wholesaler who sells to the trader and so on, all get paid in “black” and in turn pay others in black. You get the drift..

In other words, for each tax evader enjoying himself, another “idiot” pays the price. In fact many have to pick up the tab. This is the exact feeling of many in salaried class who are forced to pay tax on their actual income while the trader or contractor next door pays zilch and openly flaunts his wealth.

If this changes (yes, it will not change overnight) that’s a HUGE gain for India. We may not need 28% or even 18% rates for most items.

It will also make the traders and other businesses confident and bold because they don’t have to pay bribes through their nose on daily basis and live in fear of raids and harassment. Check my books – they are clean! They can invest, expand, hire more staff and kick start the economic engine held down by bad loans and UPA’s loot. It also levels the playing field so formal retailing can expand and bring benefits (better paid staff, better quality control, cash free payments, the list is endless).  Salaried class can look forward to lesser direct taxes.

In fact even on Day 1  many have proudly posted their GST paid receipts on Twitter – showing tax collected and paid by vendors who never did so earlier! Here’s a sample

In fact the doomsday prophets are having a tough time because even dhabhas, shop keepers and supposedly illiterate vendors are issuing GST invoices, right from midnight on 1st July! A few that are used to old ways are going on strike in their usual ways, but this is one tsunami that is not going to roll back for them.

We are on to something HUGE. The benefits are clearly under-estimated.  Don’t get us wrong. Modi and his government may mishandle the implementation and may even pay a price in 2019. We frankly don’t care. That is besides the point. But it will settle down one day and improve with time.

Looking at Indian economy as a whole this will be the day that will be celebrated by our children and their children as the day India changed.

You heard it here first!

Comments are welcome.