Economic Survey 2018
(Highlights and concerns)
1. Large increase in registered indirect and direct taxpayers.
Dilly dallying rate of
taxes according to whims and fancies of respective industries has in actuality
lead to much less collections than anticipated.
2. Formal non-agricultural payroll much greater than believed.
Indian agriculture reeling under reduction in net land area
under staple crop cultivation, farmer suicides and adverse weather conditions
leading to huge losses has majority of farm labour which is casual and
unregistered. Instead of focusing on agricultural payroll the term has been
twisted to non-agricultural payroll!
3. States' prosperity positively correlated with their international and
inter-state trade.
Focus has always been capital investments on larger states.
Obviously the dividends reaped by such states on account of central investment
is bound to reap returns. We should be talking of equitable distribution of
wealth among smaller states too!
4. India's firm export structure substantially more egalitarian than in large
countries.
In continuation to the earlier point focus has always been
richer and larger states. Export structure in India including storage (warehousing),
transport and duties need a big overhaul which will dilute the egalitarian
regime.
5. Clothing incentive package boosts exports of readymade garments.
On the contrary readymade garment sector has been crying hoarse
for the past few quarters of assessment.
6. Parents continue to have children until they get desired number of sons.
This may be true of cow belt states (UP, Bihar, MP, UKD) not
south India, north east etc.
7. Substantial avoidable litigation in tax arena.
Litigation shall be the next focus area in the tax sector.
8. To reignite growth, raising investment more important than raising saving.
How does investment be raised in the absence of savings? NPAs in
banks has forced financial stimulus, individuals and families are put into debt
trap owing to heavy interest rates. Small and medium businesses are reeling
under continuous financial stress over the last several quarters then where
would the investments come from?
9. Direct tax collections by state/local governments is significantly lower
compared with those of their counterparts in other federal countries, according
to the Economic Survey.
There are only two direct tax components collected by states as
of now i.e taxes on land and stamp duties. In this segment our system is stymed
with manipulations in land conversion from agricultural to commercial via
various routes. In no way can we compare ourselves to other federal
countries.
10. Extreme weather adversely impacts agricultural yields.
Climate change angle is obviously a cause of huge concern that
is not being addressed with sincerity it ought to be dealt with. We are already
facing its onslaught.
Takeaway from Economic Survey
1. The bullish market is bound to soften soon.
2. Investments are of concern. With focus on consolidation of nationalised
banks and increasing presence of private banks a credible interest rate factor
is of immense significance.
3. Exports need to be addressed right earnestly.
4. Oil pool deficit (owing to rising intl prices) is likely to dampen the
market enthusiasm further.
5. Unless budget spells out incentives to individuals, families, small
businesses etc we shall be sliding into a muck from where a return would be
painful.
6. We need an iron hand on economy at the same time the trend of rich and big
businesses/corporates getting away with their loot need to be checked right
earnestly....
There is so much to write but action is what is needed...
jpkallikkal/2018
