Congratulations dear PM @narendramodi.
We flattened it.
We even made it to nose dive, dig a hole, and then bury itself.
Never going to come back.
I am talking about economy.
Covid? That has now spread to every part!
Post lockdown migrant worker travel was a masterstroke 1/n
We flattened it.
We even made it to nose dive, dig a hole, and then bury itself.
Never going to come back.
I am talking about economy.
Covid? That has now spread to every part!
Post lockdown migrant worker travel was a masterstroke 1/n
No no. Dear PM. I am not attacking you for letting people go back home. It is their right & you should have let them go back in the beginning itself
And no. It is not hindsight either @narendramodi. Had briefed you back then. Warned you multiple times 2/n
And no. It is not hindsight either @narendramodi. Had briefed you back then. Warned you multiple times 2/n
What! I shouldn't be doing this I told you so, and instead now help you with an exit plan?
Well, we have had that briefing also dear PM @narendramodi. You are really losing your memory now. I urge you to pay more attention please. 3/n
Well, we have had that briefing also dear PM @narendramodi. You are really losing your memory now. I urge you to pay more attention please. 3/n
But our session today is not on either of it dear PM @narendramodi. It is on economy.
We need to help it find a way back to the surface.
Before we come to that, why don't you go through all our previous briefings once and come back? 4/n
We need to help it find a way back to the surface.
Before we come to that, why don't you go through all our previous briefings once and come back? 4/n
Good. Now that you have gone through, I am sure you understand why reducing decision making to mere stunts is a problem in governance. It might not be in politics. But when you are leading a country, you have to learn to take criticisms, question own decisions and improve. 5/n
We already had a briefing on the importance of saving jobs. One way the government can do it is to announce incentives for a no-layoff pledge from the companies. Else you see all the consumption right now driven by salaried class will also ⬇️. 6/n
Hey, come on dear PM @narendramodi, you got middle class to give up LPG subsidy and a section of population to give up their entire mental faculty. A no-layoff pledge campaign, not a coercive one, but an incentive driven one, should be really easy for you. 7/n
It was just a few months back that you gave them 1.7 lakh crore tax relief? Yes. But you see it made no sense back then. With capacity utilisation <70% and no foreseeable demand, that money just went to promoters. So one thing to do is give a future redeemable incentive. 8/n
Let the no-layoff pledge be taken today. Incentives be redeemed in the future. You've already provided them with liquidity through loan facility.
Else, a couple of major IT players announcing layoffs & the scene will go really dark dear PM @narendramodi. Really really dark. 9/n
Else, a couple of major IT players announcing layoffs & the scene will go really dark dear PM @narendramodi. Really really dark. 9/n
The next to be protected is the govt salaries & pensions dear PM @narendramodi.
Because only those who are assured of a steady income will spend now. And only when they spend our demand would grow for non-essential items. But the salaries and pensions are in danger too!
Because only those who are assured of a steady income will spend now. And only when they spend our demand would grow for non-essential items. But the salaries and pensions are in danger too!
Let's see some of the revenue break-ups of states please. Yes. You have to see dear PM @narendramodi. You are the PM.
State's own revenue (tax & non-tax) makes up for 45-72% of total revenue receipts of the state. Out of which close to 50% is from State GST.
State's own revenue (tax & non-tax) makes up for 45-72% of total revenue receipts of the state. Out of which close to 50% is from State GST.
This is similar break-up for some of the other states dear PM.
Why is there a VAT mentioned there in the post GST regime? Because VAT is still applicable for alcohol and fuel.
So now you see why states are eager to start liquor outlets. They earn their excise and a good % VAT from there. But I am digressing.
My concern is State GST. 13/n
So now you see why states are eager to start liquor outlets. They earn their excise and a good % VAT from there. But I am digressing.
My concern is State GST. 13/n
State GST, which comes close to 50% of own tax revenue in most states, is now headache of the centre dear PM @narendramodi. Your headache.
It is protected under GST compensation act. Yeah. You made that act.
Remember, you wanted to be great. India's second independence and all.
It is protected under GST compensation act. Yeah. You made that act.
Remember, you wanted to be great. India's second independence and all.
What? You don't remember? Opening up parliament in the midnight to live your Nehru complex and give a midnight tryst with destiny speech and all? No...?
What about this? ThatgGhanti bajake stuff?
Hey, you really don't want me to remind it more dear PM @narendramodi.
Let's move on..
Hey, you really don't want me to remind it more dear PM @narendramodi.
Let's move on..
Again, I had expressed my views back then itself dear PM @narendramodi. Hadn't tagged you that's all. While in the service one does not have the freedom to brief you see freely you see.
So, yeah. State GST is no more State's headache. It has become the responsibility of the centre. And that too with a 14% growth. Even if States collect zero, centre will have to pay full. That is what it is at least according to the act.
Forget about now. Even before the covid-19 crisis, this compensation was a big issue because of centre's inability to pay the states in time.
Also, since none of the higher GDP growth promises of GST came true, States were being increasingly dependent on centre for SGST target.
Also, since none of the higher GDP growth promises of GST came true, States were being increasingly dependent on centre for SGST target.
And lack of GDP growth meant we were already looking at a breaking point in 2022, when the compensation was to come to an end.
This paper here has some good insights dear PM @narendramodi. Well, at least pretend to read the abstract.
This paper here has some good insights dear PM @narendramodi. Well, at least pretend to read the abstract.
With that revenue strain, there was bound to be increased friction in GST council. Especially as some more states go away from your control dear PM.
A blocking alliance in GST council is already possible. GST council would have become effectively defunct. mpra.ub.uni-muenchen.de/86355/1/MPRA_p…
A blocking alliance in GST council is already possible. GST council would have become effectively defunct. mpra.ub.uni-muenchen.de/86355/1/MPRA_p…
So my point is this dear PM @narendramodi. India's second independence was never really anything. Especially in a fiercely fought federal polity like ours, it was a system bound to fail.
Oh btw, we already have a State specific GST regime for Kerala after the 2018 floods.
Oh btw, we already have a State specific GST regime for Kerala after the 2018 floods.
Such being the case, and also because you have put entire burden of dealing with covid-19 crisis to the states, states effectively do not have any incentive to open up immediately dear PM. Except for liquor may be.
Majority of its income is to now come from Centre.
Majority of its income is to now come from Centre.
For states, continued lockdown in one form or the other to deal with corona and an assured revenue from centre to manage its expenses is the easy way forward.
But if you don't pay the compensation amount timely, then the salaries and pensions would stop.
But if you don't pay the compensation amount timely, then the salaries and pensions would stop.
Committed expenditure (Salaries, pensions and interest payment) for UP is 142% of its State tax revenue. For Kerala it is 110%.
And additional borrowing might also be difficult.
And additional borrowing might also be difficult.
So my suggestion is this dear PM @narendramodi.
Either pay compensation amount at once.
Or, allow States to have own Covid Cess, like the Flood cess for Kerala.
This would also allow us a smoother transition to post 2022 frame-work. We can still retain many benefits of GSTN.
Either pay compensation amount at once.
Or, allow States to have own Covid Cess, like the Flood cess for Kerala.
This would also allow us a smoother transition to post 2022 frame-work. We can still retain many benefits of GSTN.
The breakdown of GST regime in its present form is inevitable dear PM @narendramodi. Inevitable.
A federal polity cannot harmoniously co-exist with unitary economic framework. Not for long.
But we can find a way to retain the benefits while following principle of subsidiarity.
A federal polity cannot harmoniously co-exist with unitary economic framework. Not for long.
But we can find a way to retain the benefits while following principle of subsidiarity.
Oh btw, you may also want to immediately implement this two month old suggestion. To attract the migrant workers back to city as the urban economy attempts to open up. That is it from me today.
No briefing for a few days now dear PM @narendramodi. GN
No briefing for a few days now dear PM @narendramodi. GN
