ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by V BhaskarSubscribe to V Bhaskar

Sharing of Goods and Services Tax Revenues

The operation of the Integrated Goods and Services Tax Act, 2017 and the Goods and Services Tax (Compensation to States) Act, 2017 is examined to identify the distortions that have crept into this devolution channel. These problems can be successfully addressed if the existing laws are implemented completely and consistently. This is not the case now.

Financing Disaster Management

The present arrangements for financing disaster management in the country do not provide for disaster mitigation. They are neither comprehensive nor adequate. There is a dichotomy between the guidelines issued by the Government of India on disaster management and the mandate of the Disaster Management Act. A national consensus is required on how to fund all the three components of disaster management–mitigation, response, and reconstruction. Other issues to be addressed include the scope of disaster management, the creation of mitigation funds, the financing of such funds, the procedure for states to draw from these funds and accepting foreign aid for disaster relief. This article examines these and related issues. It may not be desirable to complicate the GST structure by levying a cess on either state GST or central GST or integrated GST for funding disaster management. The option of increasing the yield of the present national calamity contingency duty or introducing a cess similar to the GST compensation cess may be preferable.

Challenges before the Fifteenth Finance Commission

The terms of reference of the Fifteenth Finance Commission are significantly different from those of earlier finance commissions. Some of these changes are within the mandate of the Constitution. Some do not appear to be so. Others appear extraneous. Some appear to urge the commission to asymmetrically treat a group of states. This article examines the challenges the XV-FC will face while addressing these changes.

Black Money in Politics

This article argues that the Election Commission of India should proactively implement electoral reforms aimed at improving transparency in electoral funding and ensuring that political parties do not misuse the tax benefits provided to them. It is adequately empowered to bring political parties under the ambit of the Right to Information Act and order full disclosure of all donations received by them. No additional legislation is required.

What Ails the Implementation of the Goods and Services Tax?

Since the Goods and Services Tax cannot be implemented by 1 April 2016, there is a strong case to implement a central GST from that date by merging the excise and service tax regimes. Such an integrated framework will not require any major legislative change; it will demonstrate the central government's commitment to the GST, and give confidence to trade and industry.

Stance on Devolution and Grants

The Fourteenth Finance Commission is to be commended for bringing states to the forefront of the development paradigm. The award is transformational but the fall in progressivity is of concern. There is a divergence in the growth projections between the FFC and the central and state governments. This underlines the need to implement quickly the recommendations to put in place an institutional framework for ex ante and ex post validation of both central and state budgets.

Do Not Dilute NREGA

[An Open Letter to the Prime Minister on NREGA by economists based in India and elsewhere in the world.]

We are writing to express our deep concern about the future of India’s National Rural Employment Guarantee Act (NREGA).

Case for Including Immovable Property in the GST

Including immovable property transactions in the tax base of the proposed Goods and Services Tax will curb the generation of black money while improving tax buoyancy. A model for such inclusion is proposed here. GST could be applied at a concessional rate after providing for suitable exemptions for sale and lease of domestic housing units.

Population as a Criterion for Horizontal Devolution by the 14th Finance Commission

Complying with their terms of reference, the last seven finance commissions have used the 1971 population as a parameter for determining the shares of states. However, the ToR of the 14th FC permits it to additionally consider demographic changes since 1971. This article argues that this incremental change does not provide adequate cause for the 14th FC to depart from the path of its predecessors.

Issues before the Fourteenth Finance Commission

This article poses four questions which will need to be addressed by the recently-constituted Fourteenth Finance Commission. Given an expansive terms of reference, should the commission confi ne itself to its constitutional mandate? Second, should the commission seek to develop incentive frameworks which will carry credibility with future commissions? Third, should the commission encourage better fiscal performance in the states more explicitly? Fourth, should the commission provide fiscal headroom in its projections for accommodating unanticipated developments?

A Road Map for Implementing the Goods and Services Tax

This paper examines the current steps being taken to implement the Goods and Services Tax in India. It analyses the provisions of the 115th Constitutional Amendment Bill and the Finance Act 2012 relating to service tax and notes the need for changes if the policy goals of the GST are to be met. It proposes steps to be taken for speedy implementation of GST. These include five changes to the Bill and five steps the Government of India needs to take to bridge the present "GST trust deficit" between it and the states.

Framework for Short-Term Macro Policy

V Bhaskar One announcement by the government which is to be welcomed is its resolve to review the financial position every four months. If taken seriously, this could provide the government the opportunity to tailor fiscal policy in line with short-term developments. Budgetary policy could be adjusted in line with changes in industrial demand or in formation regarding the harvest. This short-run aspect of budgetary policy has not been adequately discussed.


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