GST - still a long story to go!

The way Good & Services Tax (GST) story has moved forward, it only highlights the depth of differences, lack of clear & common objectives and the lack of trust amongst states and center.  



Too many complications in GST!

The Finance Ministers (FMs) of all the BJP ruled states boycotted the meeting of the empowered group of state FMs leading to a continued deadlock in negotiations. It is believed that the there are significant differences between the centre and states. The meeting was attended by only eight state finance ministers. 

GST is India’s most ambitious indirect tax reform, seeking to create a common national market by bringing down fiscal barriers between states. The constitution’s current provision on the demarcation of the taxation powers of the Centre and states has to be amended to implement GST, which needs a wide-ranging consensus among political parties. The Centre had asked states to come out with an alternative to their proposal after many states feared the loss of fiscal autonomy.

The more important point to note that GST implementation would not meet it's full purpose if their lack of uniform and cohesive GST structure. A complicated GST regime would do no good, instead, would create its own set of systemic issues. Success of GST would be dependent on key points - the rate of GST (it should be low & simple/straight-forward); and system/ process of GST collection.

Multi-billion dollar nuclear deal signed between India & France

A multi-billion dollar agreement has been signed on Monday, between India and France, to build two nuclear power plants. Areva SA, one of France's main nuclear power companies, will build two European pressurized reactors of 1,650 megawatts each at Jaitapur in the western Indian state of Maharashtra, an agreement that is valued at around $ 9.3 billion.

This deal has marked the first two of 20 nuclear reactors India wants to build to meet its soaring energy demand.

RBI Governor for low NIM

Addressing the annual bankers' conference - Bancon 2010, the RBI Governor Dr D. Subbarao has asked banks to reduce their net interest margin (NIM) by increasing the deposit rates and reducing the lending rates.

Though the net interest margin of the Indian banking system has narrowed from 3% in 1999-2000 to 2.5% in 2009-10 , it is still higher than some of the other emerging economies, even after accounting for the mandated social sector obligations such as priority sector lending and credit support for the government's anti-poverty initiatives.

He said, said, "To achieve double-digit and inclusive growth, we need to raise the level of national savings and channel those savings into investment."

Blog take - It is indeed not fair that so many Indians are paying high and exorbitant interest rates for repaying loans. For people who are buying their first or second home, interest rate should actually be bare nominal like in the range of 1% or 2%, as the intention isn't speculation but securing a future. The basic argument against such low interest rates can be high inflation and deposit rates in India. But then, innovative instruments can always be developed. Like banks can be given some relaxation in CRR norms if they deploy a stipulated amount in such lending, creating UID based targeted schemes, allowing increase in tax benefits etc. Can Indian Government really think out-of-box and take bold measures for the low/middle income class? Isn't ensuring a secured future for Indians a top priority for the government?

French President Sarkozy in India

On his four-day visit to India here on Saturday, French President Nicolas Sarkozy called for a permanent seat for India in the U.N. Security Council, less than a month after US President Barack Obama's strong endorsement of India's bid for a seat in the UNSC.

France and India have great potential in developing their ties further. From civil nuclear energy co-operation to submarines, fighter aircrafts, education etc.

As India expands its wings in global stage, it would need a series of strategic partners who have similar interests as India does. Hence, relationship between India and France has a lot of strategic importance for both these powerful nations.

26/11 will always be remembered

The second anniversary of the terror attacks that left 166 people dead and several wounded was remembered by all Indians. The nation and its people stands together in solidarity with the families of the victims of this inhumanely terrorist attack that had taken place.

Long live our motherland India and let us always stand together in unity.

Andhra Pradesh gets a new CM

After K Rosaiah resigned on Wednesday citing health reasons, Kiran Kumar Reddy was sworn in as the new Chief Minister of Andhra Pradesh.

This move is seen by some as a measure to reduce the influence of Jagan Mohan Reddy.

A four-time MLA from Rayalseema region and a YSR loyalist, Kiran Kumar Reddy, is believed to be a master-piece move from Congress.

 So the Bihar elections are over and Nitish has batted well on the front foot and bowled over his competitors.

What a landslide victory this has been for the JD(U)-BJP! This shows the confidence and expectations that people have and let us hope that Nitish delivers and lives up to these expectations.