The most important issue of our day is climate change, and this is a pivotal period. The effects of climate change are unparalleled in magnitude, ranging from shifting climates that endanger food production to increasing sea levels that increase the likelihood of catastrophic flooding. Without immediate action now, future adaptation to these effects will be more challenging and cost prohibitive.
The issue is not the rate of tax; it's the taxing of turnover, and not the gaming company's revenue
BENJAMIN Franklin is supposed to have said that the only certain things in life are death and taxes. The certainty of taxes can be exaggerated, especially in India. But there is nothing uncertain about the fury of a taxman who has been scorned.
Indian agriculture is a gamble on the Monsoon. This cliché would have been sufficient ground for the Goods and Services Tax authorities to slap a tax of 28 per cent on the value of crop output if agriculture had not been kept out of the ambit of GST.
Finance Minister Nirmala Sitharaman has come up with a Budget that did not deserve a thumbs down from the Nifty, which ended the day’s trading 0.26% lower. This was more on account of the troubles of the Adani Group and, by association, of public sector banks with exposure to the group.
The big boost to capital expenditure — including grants in aid of capex; the increase in capex is Rs 3.2 lakh crore, to Rs 13.7 lakh crore — is welcome and suggests that the Budget is pro-growth. That pro-growth glow loses some sheen when we take into account the total size of the Budget. It has come down from 16% of GDP in 2021-22 to 15.3% in 2022-23 and is slated to fall further to 14.9% next fiscal year. This reflects the longstanding inability of the system to significantly increase the share of taxes in GDP — the only way to raise total expenditure is to borrow, which means that fiscal correction also brings down the size of total spending.
The Supreme Court ruling holding the decisions of the Goods and Services Tax (GST) Council to be recommendatory, rather than binding on the Centre and the states, and that these nodes of federal power can legislate on subjects falling within their domain, brings welcome clarity on the tax. It does not undermine GST or undo the intent and purpose of the Constitution’s 101st Amendment that brought in GST. It strengthens India’s federal structure. The only damage the ruling does is to the boast that GST means one nation, one tax — in any case, GST already has seven percentage rates: 0, 3 (on gold), 5, 12, 18, 28 and 28 plus sin-good-cess.
The Union Budget 2022-23 was expected to take steps to tackle the problem of inadequacy of demand so that the economy’s rate of growth could be accelerated. This problem has persisted and had led to the rate of growth slowing down in the last four years. In turn, this problem is linked to the growing inequality in the country, which has been highlighted by several recent reports. The latest report is from the non-profit think tank People’s Research on India’s Consumer Economy [PRICE]. It shows not only the aggravation of inequality but also of poverty since 60 per cent at the bottom who were already poor or close to the poverty line lost incomes.
