Forget fairy tale figures. People can't afford GST.

The government proposes to spend Rs 19.5 trillion in FY21 (financial year 2020-21) on a National Infrastructure Pipeline (NIP), even though people believe it has "no money", wrote Rajrishi Singhal. "The NIP document estimates gross domestic product (GDP) for FY20 at Rs 205.37 trillion and, yet, the government's own first advance estimates do not put it beyond Rs 147.79 trillion, short by 28%." The NIP estimates the FY21 GDP at Rs 227 trillion, "an incredible 53.6% growth over the government's own advance estimates". Right on cue, has come the report, "The government may be losing Rs 5 trillion in indirect tax revenue a year, amounting to 40% of its goods and services tax (GST) collection target, because of defaults and evasion, according to the Fifteenth Finance Commission (FFC), confirming policymakers' fears that businesses are not paying their fair share of taxes." How is that possible when the government's own site says that GST will "make compliance easy and transparent" "due to a robust IT infrastructure" and impossible to cheat because of "the seamless transfer of input tax credit from one stage to another in the chain of value addition". In the explanation provided by Cleartax, a company will get a tax refund when the next company in the chain of manufacture pays its tax. It is, therefore, in the interest of companies in early stages of manufacture to ensure that others further down the line pay their taxes so that they get their money back, failing which they should complain to tax authorities. Which makes GST foolproof, prompting Prime Minister Narendra Modi to describe it as the "Good and Simple Tax". So how did the pundits of the FFC conjure up the figure of Rs 5 trillion of tax evasion to support the government's brutal tax terrorism? Along with the FFC's fairy tale figure the International Monetary Fund (IMF) predicted India's GDP to grow by only 4.8% in 2019-20, dragging global growth down with it. "The growth of the Indian economy had been predominated by consumption inclusive of both - Private Final Consumption Expenditure (PFCE) as well as the Government Final Consumption Expenditure (GFCE)," wrote Amit Varma. PFCE growth fell to 3.1% in the June quarter compared to 7.2% in the March quarter of 2019. "Rural household consumption slumped to a seven-year low in the September quarter, in a sign that the prolonged agrarian distress and near-stagnant rural incomes have eroded demand for consumer goods, market researcher Nielsen said." Although 94% of all households now have domestic gas connections for cooking, 48% of rural households still do not use gas for cooking because of the cost of refills, which are subsidised. Businesses are not paying GST because people are not buying. They can't afford to.