Monday, September 28, 2020

We may not see it, but we can feel the cosh.

 Finance Minister Nirmala Sitharaman told state governments to borrow to make up a shortfall of Rs 2.35 trillion in goods and services tax (GST) compensation. States ruled by opposition parties want the Center to borrow and pay them their dues. Not only has the Central government refused to honor its commitment to compensate states for any shortfall in GST collections, it has imposed conditions under which states will be allowed to borrow, perhaps forgetting that governments in the states in India are elected by people who live in those states. "It is not the first time, and neither will it be the last time that the Center and states have differed," wrote Anil Padmanabhan. "Over the last few weeks, it (Center) has set in motion a fundamental reset in the existing paradigm for education, harvest, sale and storage of agriculture produce, the public distribution system and the bureaucracy. All these subjects also fall under the purview of the states." "Following the furor in the upper house of Parliament on September 20, eight opposition MPs were suspended from the house, during which period the Center pushed through seven bills." So there are seven new laws to govern citizens without any debate, discussion or amendment on how they will affect our lives. While blaming an "Act of God" for its inability to pay its dues, "The government wrongly retained Rs 47,272 crore of goods and services tax (GST) compensation in the Consolidated Fund of India in 2017-18 and 2018-19 and used it for other purposes, the Comptroller Auditor General (CAG) said in its audit report of government accounts." The government can ride roughshod over citizens and states but foreigners are another matter. The tax department has just lost its claim of Rs 200 billion in taxes against Vodafone at the Permanent Court of Arbitration in the Hague. India will also have to pay penalties and costs. The Income Tax department is to seek the Attorney General's opinion on whether it should appeal to the Singapore based appellate tribunal. If they do and lose again they should be made to pay all costs and penalties, not the taxpayer, from their own pockets for their obstinacy. Using a retroactive tax demand law enacted by the previous government, the present government demanded $4.3 billion from Cairn Energy in 2016. "After Cairn disputed the levy, New Delhi expropriated its shares in Indian billionaire Anil Agarwal's Vedanta Ltd, into which Cairn had merged the India unit. The government pocketed the dividend and then sold the stock," wrote Andy Mukherjee. "Transparency is a cornerstone of democracy, today's India is cultivating secrecy. Paradoxically, this culture of secrecy is sometimes justified in the name of transparency," wrote Christophe Jaffrelot. We can see. But, can do nothing. That's transparent.   

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