Saturday, March 1, 2014

Does BJP support outsourcing of the sovereign function of tax collection to a private entity?

Note: ''Economic decisions, Modi said, should not be taken under the influence of politics''. Should it be taken under the influence of commercial czars or transnational business enterprises like WalMart? Does BJP realize that supporting GST means expressing support for GST Network which is a National Information Utility (NIU). NIU is a private company with a public purpose with profit making as the motive but not profit maximization. Does BJP support this linguistic corruption? Does BJP support outsourcing of the sovereign function of tax collection to a private entity? Doesn't BJP realize that GST Network is a scam? It seems Sushil Modi who was involved in GST Network has misled Narendra Modi in this regard. As a case of post retirement benefit former Bihar Chief Secretary, Navin Kumar is heading the GST Network. 
Gopal Krishna

Narendra Modi 'abandons' Indian traders, backbone of Bharatiya Janata Party 'vote bank' with surprise retail remarks
 SUMMARYNarendra Modi surprises as Bharatiya Janata Party has opposed FDI, especially multi-brand retail.
Narendra Modi, Bharatiya Janata Party's prime ministerial candidate, told small traders at a rally they have to accept the presence of large retail chains instead of “running away” from the challenges posed by them.
Traders are traditionally considered to be the 'backbone' of the Bharatiya Janata Party''s 'vote bank'.
The Gujarat chief minister Narendra Modi's comment is the first clear statement in favour of big retail and e-commerce from the party that has publicly opposed foreign direct investment (FDI), especially in multi-brand retail.
“There is no need to fear global challenges, try to convert the situation into an opportunity. Make the most of this situation. We are a powerful nation and have taken a lead in information technology. This is the age of online marketing, accept modern science and make use of it,” Modi said.
Modi surprised small traders with his inaugural speech at the Traders National Convention as they have expressed fears of being swamped by organised retail and had expected Modi to highlight those concerns.
While Modi made no direct mention of FDI in any of his three speeches in Delhi Thursday, he said his party supports the roll-out of a national Goods and Services tax, a major demand from industry for the next Central government.
Instead, he said small traders must learn to build brands and go online, creating virtual malls to take on large and multinational retailers. “Customers from even small towns are now going for branded stuff. They are going to malls to buy them. Small traders can build a virtual mall by getting into agreements with brands. You can have a virtual mall in small shops at the click of a button,” he said.
Just weeks ago, Rajasthan’s BJP government became the second state after Delhi to roll back the permission given to foreign direct investment of up to 50 per cent in multi-brand retail. Other BJP ruled states have not permitted such FDI and analysts said Modi’s views could force a rethink.
Global retailers such as Walmart, Tesco and Carrefour who had shown interest in India have since gone slow on their plans while even single-brand retailers such as Ikea have decided to pause despite getting all clearances.
Modi’s statements were lapped by big retailers.
“This looks like a strategic direction which is being set ahead of the elections and it’s a very welcome one. These comments and clarity will help everyone in the industry and foreign players to take decisions,” Kishore Biyani, CEO of Future Group, told The Indian Express.
Modi used the three different platforms to give some indicators of the economic policies the BJP could follow if elected to power.
“In the last 10 years we have lost out...We talk about fiscal deficit but we have governance deficit, deficit of vibrancy in democratic institutions, ease of doing business deficit, security deficit,” he said at the India Economic Convention.
“We need to restore the faith of common people. We don’t have direction, dedication and determination. Bad governance is like diabetes. More than policies we need governance...What we need is a complete overhaul of the departmental system. Laws should be made simple,” he said.
Economic decisions, Modi said, should not be taken under the influence of politics. “If the purpose for which the government has been constituted isn’t served, there is no point in running the government,” he said.
Modi said GST introduction was delayed as the Centre had not been able to prepare for it and had not listened sympathetically to the states.
“I have met the finance minister and told him if the IT backbone is not created GST cannot come through,” Modi said, without specifying why Gujarat has been opposing the Bill despite the Centre’s compensation offer.
Modi U-turn on GST

New Delhi, Feb. 27: BJP leader Narendra Modi today indicated that he would support the goods and services tax (GST), after having stone-walled the UPA government’s efforts to bring in the tax for nearly a decade.
Modi, who had a series of interactions with traders, chartered accountants and business leaders during the day, said: “BJP is in full favour of GST. Infotech connectivity is a prerequisite for the implementation of GST.”
The tax — which will snuff out central excise taxes, additional customs duties, surcharges and state taxes such as VAT, entertainment and luxury taxes, lottery and gambling taxes — could well add 1-2 per cent to India’s growth rate, according to economists.
The Bharatiya Janata Party and the BJP-run states of Gujarat, Uttarakhand, Chhattisgarh and Madhya Pradesh have steadfastly thwarted two successive finance ministers’ (Pranab Mukherjee and P. Chidambaram) bid to bring in the nation-wide tax.
An attempt by Mukherjee some four years back to break the deadlock during a trip to Ahmedabad did not succeed as the chief minister, while not objecting to the measure, brought in procedural objections.
Later on, meetings which Chidambaram held with Opposition leaders ahead of the Parliament sessions met with similar objections.
A consensus is essential as the GST rule has to be passed by a two-thirds majority in both houses of Parliament. The original deadline for rolling out the tax on April 1, 2010 as well as several later deadlines have already been missed.
Finance ministry officials, who have worked overtime to try build a political consensus on the tax measure, said the GST Act as envisaged by the Centre provided for a institutionalised mechanism to distribute the states’ share of taxes.
Officials said Modi’s emphasis on the need for proper IT support for GST roll-out stems from North Block’s presentations to the state finance ministers’ conclaves on GST.
The presentations showed how a nation-wide IT infrastructure to record intra-state trade data could help the tax measure succeed and also help states claim their rightful share of the tax.
Analysts said all states would benefit from this simple value-added tax in the form of higher revenues, with the greatest gains going to those with large manufacturing bases.
“The biggest gainers will be states such as Gujarat, Tamil Nadu, Maharashtra, Karnataka and Bengal, who are big producer states… criticism of it will die out once the measure comes in,” said D.K. Joshi, chief economist with Crisil, adding, “We see GST as the single most important and fundamental tax reform taking place.”

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