Vijay Kumar Gaba

Friday, July 14, 2017

A decade and counting

"There is not in the universe a more ridiculous, nor a more contemptible animal, than a proud clergyman."

—Henry Fielding (English, 1707-1754)

Word for the day

Glocal (adj)

Of or relating to the interconnection of global and local issues, factors, etc, e.g., a glocal conference on community development.

Malice towards none

Waiting for some sermon on Gita and Unpnishada from Rahul Gandhi!

First random thought this morning

If data is a weapon, than H. D. Deve Gowda and Dr. Manmohan Singh could be in possession of the most potent ones of all.

While HD presided over the "Dream Budget" that let the animal spirit of Indian entrepreneurs loose, something that the watershed 1991 budget could not do. The two terms of MMS (2004-2014) saw India's growth galloping from sub 5% in 2004 to over 9% in 2008. The data also shows that he steered the economy remarkably well through the global financial crisis.

But this, as I said, might just be that Data. Nothing more. Those who love to use data to show the unprecedented performance of the incumbent government are advised to read the time series from 1991 at least.

And guess what, P. Chidambaram may emerge as unlikely champion of growth, and Yashwant Sinha a close second.

A decade and counting

Exactly a decade ago, during the second week of July 2007, S&P downgraded US$7.3 billion of securities sold in 2005 and 2006. A few weeks later, Moody’s Investor Service slashes ratings on 691 securities from 2006, originally worth US$19.4 billion. Some 78 of the bonds had Moody’s top rating of Aaa. The securities were backed by second lien mortgages that included piggyback mortgages. Moody’s stated that the cause for the downgrades was the dramatically poor overall performance of such loans and rising default rates. Fitch also downgraded subprime bonds sold by Barclays, Merrill Lynch and Credit Suisse.

This was beginning of, what would become a global financial crisis in no time. The crisis which would annihilate some of the leading financial institutions like Lehman Brothers and Merrill Lynch, threaten the solvency of some of the most powerful empires in history, namely Portugal, Italy, Greece and Spain (Inappropriately clubbed under acronym PIGS), lead to erosion of trillions of dollars from global wealth, cause millions of job losses, imperil the unity of European Union, and push the world into a prolonged period of low growth.

Surprisingly, the stock markets did not react to the crisis immediately. After a small jerk in July 2007, stock markets across the world rose dramatically. Except for Chinese equities that corrected in October 2007, most markets rose sharply till January 2008. This was perhaps the sharpest bear market rally, in my view. And then came the inevitable crash. From last week of January to March 2009 was one of the worst periods in decades in terms of stock returns.

The challenging times call for tough measures. But that was not to happen in this case. The central bankers across the world got united to bail the world out of this crisis through an "unconventional method" - quantitative easing, an euphemism for printing more money.

"Whatever it takes" was the new paradigm. The mints across the world ran overtime. Centrals banks printed enough money to buy all the junk available on street, bail out profligate governments & errant banks, and splurge concessions on consumers to boost consumption.

To their credit, the gigantic effort did help in unfreezing the global markets, stabilizing the global financial system, forced a certain degree of fiscal discipline amongst the profligate government, pull out the global economy from recession (that was widely feared to snowball into a worldwide depression, worst that the 1930 episode)

The strategy however created a New Normal in the global economics. Something that was not there in the economic text so books.

The unprecedented monetary and economic stimulus failed to bring the inflation back. The commodity producers continue to struggle. The economic growth potential for most developed economies scaled down materially. The investment demand therefore seems unlikely in foreseeable future. The bond yields remain close to their lows, despite talks of imminent talk of policy reversal. Reflation and bond correction are two trades that have deceived millions of traders following old text books....to continue

Thursday, July 13, 2017

Set the priorities right - 2

Thought for the day

"Guilt has very quick ears to an accusation."

—Henry Fielding (English, 1707-1754)

Word for the day

Cannikin (n)

A small can or drinking cup or a small wooden bucket.

Malice towards none

Why did Tubelight flopped on box office?

(a) It's a bad film

(b) People had already spent all their movie budget for the quarter on Bahubali - 2.

(c) Spiderman

(d) Salman Khan's statement on talks with Pakistan

(e) Any other, pl specify.

First random thought this morning

Some recent reports have suggested that public sector behemoth and world's largest miner of dirty fuel, Coal India is betting big on renewable energy (see here).

The minister was quoted as having said that "This is a contribution towards a better planet, towards greening the country and greening the world."

What would you call it - Paradox. Irony. Sham. Bizarre. Incongruous. Droll.

Or something else!

Set the priorities right - 2

My colleagues recently visited the flood affected areas of Assam. The misery of people there can't be described in words. Especially when it is a predictable and recurrent phenomenon. The apathy of administration and policy makers is astonishing.

Spending couple of days there and interacting with some other NGOs working in the area, we could figure out very effective solutions (that would cost almost nothing and are very easy to implement) to minimize the misery of people.

The objective of writing this is to highlight two things:

(a) The political (and therefore administrative) priorities in the country may be seriously misplaced.

(b) The administration lacks both innovation and initiative, insofar as dealings with people's common problems are concerned. Some of this banality might be due to recurrent political snubs. But that is a weak defense, in my view.

Imagine if this happens to you every year.

We suggest the least the administration could do is to provide a durable survival kit to the people in the areas frequently affected by floods.

The kit may contain small, convenient, and efficient self-help tools to improve the sustaining power of poor and underprivileged people who totally rely on the government's help for survival.

The kit may for example contain:

A water proof all weather roof for temporary, kutcha and semi-pucca dwelling units.
Durable, water proof, inflatable containers to preserve Ration, Medicine and Valuables during the flood period. The container may also be used to safeguard Infants under extreme conditions.
A foldable 10x10 tent to be used as temporary accommodation during the floods.
A solar charged LED lantern for emergency lightening

Our market survey suggests that this entire kit would cost less than Rs7500 per household. It would last for 7-10years. It can save many precious lives; reduce hardship to millions of people, and materially enhance people's sustenance power.

Wednesday, July 12, 2017

Set the priorities right

Thought for the day

"Commend a fool for his wit, or a rogue for his honesty and he will receive you into his favor."

—Henry Fielding (English, 1707-1754)

Word for the day

Janus-faced (adj)

Having two contrasting aspects.

Having two faces, one looking forward, one looking backward, as the Roman deity Janus.

Malice towards none

The Rebellious TV news anchor wants a full-fledged direct war with Pakistan. He would not mind a war with China too.

What da ya say?

First random thought this morning

At a time when the country is facing serious economic challenges, internal security threats and external threats - we are working with part-time (and not so healthy) finance and defence ministers, a home minister with fractured foot, and an external affairs minister who is also not keeping very good health.

What could be the reason? Is it the dearth of capable people? Is it the trust deficit on part of BJP leadership? Is it the desire of top leadership to totally centralize the command of the nation? or is it all of these?

Set the priorities right

A large part of the population in Eastern and North Eastern parts of India suffers from floods almost every year. Millions of people suffer tremendous hardship every year due to inundation of their houses and fields.

For many of these people life begins afresh every year, as they lose their shelters, belongings, old parents, infants, and jobs to floods or to the disease and starvation that invariably follows the flood.

This cycle has been going on since past many decades. States like Assam and Bihar have a regular flood control department. Every year they go through the same routine. The most unfortunate part is that this misery of people has been accepted by the administration and the politicians as fait accompli. So much so that political parties even do not consider it important to promise effective measures for flood control in their manifestos.

For example, consider the following:

1. In Assam, where millions of people suffer from floods almost every year, the Vision Document 2016-2025 issued by the ruling BJP, mentions the word flood only twice, once under the heading "Housing" and the second time under the heading "Guwahati Development":

Housing

"Designing and developing world class infrastructure with due consideration to natural disasters like floods and earthquakes."

Guwahati Development

"Using state-of-the-art technologies to prevent flash floods."

2. Bihar CM Nitish Kumar's agenda for Bihar did not mention the word flood even once.

3. The largest party in Bihar assembly, RJD, also did not consider flood to be a problem worth according any priority.

Now consider the following basic data points to comprehend the extent of the problem:

(a) In Assam about 87% rural households live in a Katcha or semi-pucca structure. (NSSO 70^th round survey report – Dec’14)

(b) 40% area of the state of Assam is flood prone.

Tuesday, July 11, 2017

Back to school - 3

Thought for the day

"A newspaper consists of just the same number of words, whether there be any news in it or not."

—Henry Fielding (English, 1707-1754)

Word for the day

Ameliorate (v)

To make or become better, more bearable, or more satisfactory; improve, e.g., strategies to ameliorate negative effects on the environment.

Malice towards none

If NiKu feels MeKu is a losing proposition and hence not worth supporting in presidential election, what would make him believe that RaGa is a candidate worth supporting for PM post in the 2019 General elections!!!

First random thought this morning

Please rewind your memories a little bit and try to remember the primary plank on which the incumbent NDA government was elected.

What I get is "corruption in public offices".

"We the People" gave them overwhelming mandate to pursue this agenda. Now if they are pursuing it with some vigor, how does it become political vendetta?

If they do indulge in political vendetta, under the garb of anti-corruption drive, "We the People" will decide their fate in 2019.

Back to school - 3

In my view, the first and foremost reform that India needs is a complete overhaul of the education system.

I have the following solutions to offer, with a caveat.

Caveat: I have discussed this issue with a number of people from various walks of the life. While a majority of people who actually participate in the education system as contributor or beneficiary, did largely agree with my views, most of the policymakers, elite, and policy influencers found these too radical to implement.

Suggestions

1. The Right to Education (RTE) law should be transformed into a more comprehensive Right to Uniform Education. It should be a fundamental right of all children to receive an equal and uniform opportunity to receive education.

2. The government should establish and fund all educational institutions up to graduation level. All private institutions meeting the prescribed standards should be nationalized forthwith; other should be shut down.

3. All education till primary level should be in mother tongue, with Hindi and English as electives. From secondary level, all students should be given an option to choose their medium of instruction.

4. Like the taxation system, the education and examination system should also be uniform across the country. All regional boards should be abolished. A central autonomous regulator should be established to administer and regulate the education system. The regulator should have six members, one from each region (North, South, East, West, Central and North East) and one Chairman. The members should be retired vice chancellors of the top university in each region. The chairman could be a top scholar.

5. Up to secondary level the examinations should be to identify the strengths of the children rather than emphasizing on their failings. The post secondary course for the students should be chartered based on their strengths rather than ambitions of their parents.

6. A strong vocational training network should be integrated with the post secondary education system. This network should be managed and funded by the industry under their CSR initiatives. The students should be assigned to this network based on their aptitude. The government's role in this network should be to make sure that the society honors the dignity of labor and no one is discriminated based on their profession.

7. The examination system post secondary level should be purely job oriented. The Central regulator should conduct various examinations that would qualify the students for applying for various specialized courses and jobs. A student joining IIM immediately after completing his stint at IIT and becoming a banker soon after is travesty of the system.

8. The government should create an open source National Portal for Learning (NPL).

All working teachers should be required to upload at least one lecture/lesson per month on the portal. All teachers receiving pension should be encouraged and motivated to upload lessons and lectures related to any subject and standard.

Similarly, all class one bureaucrat should be mandatorily required to upload lessons on policy making and administration.

All professionals (e.g., doctors, engineers, CAs, lawyers, lecturers, etc.) should be required to earn certain continuing education credits. They may earn these credits by uploading lectures, lessons, case studies based on their real life professional experience etc.

Besides, all citizens should be encouraged to contribute to the portal.

This way, the government can create a learning portal, having education and training material for all standards, professions, vocations in all languages. Anyone in the world can use this portal for learning anything they wish.

A system of evaluation (online tests etc.) could be integrated with the system to help people who can't attend regular schools due to age, inability or any other reason, to obtain formal qualifications.

9. The NPL should be supplemented with a National Corps of Volunteers (NCV), comprising of people who want to volunteer their time and skill for teaching and training Indian citizens. The regulator should approve their training/teaching program and provide necessary facilities (like class room in schools post normal school hours and required teaching material) to each such volunteer, who can then teach/train the interested participants. For example, if a retired English teacher wants to teach English to construction labor, rickshaw pullers, elderly parents etc., he can be provided a class room (post school hours), books and writing material for students. Similarly, if a Hotel chef wants to give cooking classes to people, he can be provided necessary facilities. Any citizen of India should be free to join a class of his choice.

10. The government should create six Exclusive Education Zones (EEZ), one in all regions of the country. These zones should be designated as neutral land for taxation, labor, education and currency law purposes. All reputed global education institutions should be invited to set up their integrated campus in these zones. The only conditions should be 20% admissions to Indian students and 40% jobs to Indian.

Every years billions of dollars worth of precious foreign currency is spent by Indian students travelling abroad for higher studies. Through these zones, we may be able to save much of this forex outgo. Many foreign students who cannot go to advanced countries like US and UK for higher studies, can come and study here.

Besides, our teachers will get opportunity to collaborate with their global counterparts in research and development activities. And global best practices in education could be imported into our education & training system. We have seen tremendous result of this in auto industry

11. Accomplished people in every field should be encouraged and funded to establish their own Academies of Excellence (AoE) to promote excellence in their own field. For example, a Padma Vibhushan in classical music may be encouraged to establish a residential music academy to train students in classical Indian music. Similarly, top professionals from medical, engineering, fine arts, yoga, languages, etc, could be invited to contribute positively to the nation building.

These are just a few suggestions. There is lot more that could be done.

If the readers are wondering, how this gigantic transformations will be funded. That is no problem at all, in my view.

The government may just exit all industrial and banking activities. The resources raised from these exit should be more than enough, besides the education surcharge, to pay for this endeavor. Moreover, for next ten years, the corporates may be required to spend their mandatory CSR allowance only for this initiative.

The households will save billions, they pay for coaching and admissions of their children. This will be the biggest boost to private consumption and hence tax revenue.

NLP, if managed properly, can become a valuable asset as single point global source for all education and training needs. I would imagine it to be more valuable than Wikipedia, Whatsapp and Facebook put together, in less than a decade.

Are you worried about the unemployment of millions of people engaged in the business of coaching? Well me too!

Friday, July 7, 2017

Back to school - 2

Thought for the day

"Although the world is full of suffering, it is also full of the overcoming of it."

—Helen Keller (American, 1880-1968)

Word for the day

Gobsmacked (adj)

Utterly astounded; astonished.

Malice towards none

Ajay Singh reportedly bought SpiceJet for a consideration of Rs2 only.

Some power companies in Gujarat have offered the government to buy their ultra mega plants @Rs1.

Someone suggested Air India may be sold only if government pays the buyer something.

And RBI still loves to discuss inflation!!

First random thought this morning

Your dalit vs. my dalit

Your GST vs. my GST

Your loan waiver vs. my loan waiver

Your secularism vs. my secularism

Your India vs. my India

Where have we reached after 70yrs of independence!

Back to school - 2

A few weeks back, results of class XII CBSE examinations were declared. There were many students who earned almost perfect score in subjects like Political Science, History, English, Psychology. Our HRD minister was quick in calling and congratulating the girl from NOIDA who stood at the top of table.

I did not hear any voice of concern. To me so many students scoring near perfect score in political science, history and literature means that system encourages only those students who are conformist. The examiners are trained to punish the students who like to differ and offer alternate views on history and political issues, even at 12th standard level. This cannot be a good sign for a progressive society.

Our education system, in my view, is examination oriented rather than learning oriented. And to that extent, it continues to be an extension of the colonial model.

In fact, as per the government's claim, many parents have raised concern that since the abolition of compulsory Board Examination (independent evaluation) at 10th level under CBSE in 2011, the students were not taking enough pressure in their studies and thus lagging behind the students of State Boards which were conducting Board examination.

Many of the readers of this post might have read or seen social media messages proudly claiming the glorious knowledge traditions of India. The messages claim how Indian scientists have pioneered path breaking research in the fields of mathematics, physics, medicine & surgery, astronomy, astrophysics, metallurgy, public administration, weaponry & war strategies, maritime technology & skills etc.

Many enthusiasts (including senior ministers, governors and chief ministers) want us to believe that Indian scientists had achieved excellence in the complex fields of nuclear warfare, space technology, civil aviation, genetic engineering, bio-technology, citing examples from epics like Mahabharta and Ramayana.

What I gather from scriptures and research (Pardon me, I claim to be no expert and know only a tiny bit) is that traditionally India had been a knowledge based society. There was a great focus on learning. Both elite and commoners got an opportunity to learn and excel, under patronage of the State. All centers of learning (Gurukul, Mutt, Temple, etc.) were mostly financed by the State and managed autonomously by the learned people. Divergent views and theories were encouraged and appreciated.

I feel proud about my legacy. Accepting all these claims of greatness makes me feel proud about my glorious legacy. But me, or anyone else for that matter, owning our legacy may not help much if our actions actually try to destroy it. Our present education system precisely tries to do that.

The education system widens the socio-economic divide, as the standards of education in elite private institutions and publically funded institutions diverge significantly. It discourages independent thinking and divergent views. It demotivates and demoralizes students scoring 85-95%....to continue next week

Thursday, July 6, 2017

Back to school - 1

Thought for the day

"No one has a right to consume happiness without producing it."

—Helen Keller (American, 1880-1968)

Word for the day

Unalienable (adj)

Not transferable to another or not capable of being taken away or denied; inalienable

Malice towards none

What does BJP gains in real terms from pushing three nominees in Puducherry assembly?

First random thought this morning

All confrontations are not bad; nor all confrontationist. As all conformists are not good.

It depends on the purpose for which someone is confronting an establishment, a tradition, a practice or a system.

Confrontations to break the status quo for betterment of all is desirable and should be welcomed. Confrontation to put someone down, or promote someone, without changing anything in real term, is unacceptable.

Back to school - 1

Earlier this week I had written (see here) about the need for a paradigm shift in the education system in the country. As promised, I would like to share my thoughts on this in some detail.

Billions of reams have been written about the deficiencies in the education system of the country. Many reports have highlighted how the poor standard of education is constricting the growth potential of the country. Without getting into much details, I would like the readers to consider the following brief points:

(a) Most business leaders, both from manufacturing and service industries, have frequently expressed grave concerns about the employability of the engineering and management graduates.

(b) A host of government and private studies have shown that the level of average students at middle school level in most populous states like UP and Bihar is unacceptable. In many cases class 6 students failed to answer 2nd standard questions.

(c) The business of private coaching is growing exponentially, almost to the level of nuisance. In middle and lower middle class families, the tuition fee expense competes with kitchen expense.

The city of Kota is glaring example. The city’s economy, that once depended on mining, textile, cement, chemical and agriculture and related industries, is now centered around myriad of “coaching centers”. Numerous aspiring engineers and doctors weather extreme heat and cold conditions to pursue their dreams. My multiple interactions with students and coaches indicate that most aspirants are victims of their parents’ dream and a majority of them are likely to grow into “frustrated useless unproductive reluctant workers”. Not a great commentary, certainly.

The number of student suicide cases in Kota and elsewhere have risen almost at par with farmers' suicide cases.

(e) After 70yrs of independence we are still struggling to formulate an integrated education policy.

(f) I interacted with some senior officials of Delhi government and central education departments. None of them makes a difference between "education" and "learning". Most of them seen incarcerated in colonial mindset. They felt that ideally the objective of formal education should be to make people "employable". Their regret was that the current system of education is not sufficient to even achieve this objective.

I have been highlighting that the vast reservoir of youth energy on which Indian economy is sitting presently, could potentially explode if not channelized appropriately. It is therefore extremely critical to evolve an integrated youth policy that include mission scale programs to educate and skill the youth, inculcate enterprise skills in them from early stages, enable them to engage in productive self employment, deal empathetically with their concerns, anguish, frustration and disillusionment.

India has so far issued three editions of national youth policy. The first edition was a brief 5 page vision paper which recognized the importance of youth but did not provide any conceptual framework for the growth and development of this one third segment of the population.

The second edition was issued in 2003 and contained a detailed framework for the implementation. It recognized that “the question of employment is, at present, of very serious concern for the Indian youth and that several social issues arise out of widespread unemployment and under-employment of the youth”. The policy emphasized that “critical issues in this area include a mis-match between skills-requirement and employment opportunities, low technology levels, low wages and low productivity, occupational shifts in employment, under-employment owing to seasonal factors, excess labor supply in relation to demand, migration of the labor force from the rural to urban areas and limited participation of women in the work force, especially in the organized sector”. Financial inclusion was included as one of the objective for the first time.

The policy was supposed to be implemented forthwith and reviewed after every five year. The change in government in 2004 however meant that it was hardly implemented.

The extant government has issued a draft policy in 2012 with the goal of “empowering the youth of the nation by bringing holistic development”. The objective, inter alia, include “Through a sustained programme of education and training and appropriate support services, help young people become economically self-reliant and productive units of the country, either by taking up employment or by setting up their own business enterprises.”

The policy has yet not been adopted.

...to continue tomorrow

Wednesday, July 5, 2017

Take on GST

Thought for the day

"Never bend your head. Always hold it high. Look the world straight in the eye."

—Helen Keller (American, 1880-1968)

Word for the day

Exurb (n)

A small, usually prosperous, community situated beyond the suburbs of a city.

Malice towards none

Will PM Modi go to Palestine in next 6months on a state visit?

(a) Yes

(b) No

(c) No need

(d) Does not matter

(e) He should but he won't

(f) He will, but he should not.

(g) How do I care

First random thought this morning

Bihar Chief Minister has raised a very valid point. The opposition parties in India are completely directionless. They are merely reacting negatively to whatever the government (especially the PM) says or does. They have completely failed in presenting any alternative agenda before the people of the country.

The socio-political narrative in India therefore has become spiteful. If some opinions expressed in recent foreign media reports are any indication, some of this negativity is spilling beyond borders also. This is unfortunate.

This needs to change; rather urgently.

Take on GST

It's been four days since the much talked about, debated, praised, cursed, cheered, resented anticipated and feared tax reform - Goods and Services Tax (GST) has been implemented in the country.

There are reports from various cities that some markets have remained shut in protest. But nothing dramatic has been reported so far. The appearance of fear mongers on TV screens is diminishing. Despite authoring this historic change, the Congress Party finds itself standing on the losing side alongside Mamata Banerjee and Communist parties. Some insignificant parties like Shiv Sena and AAP are talking gibberish, which perhaps no one understands. The rest of the opposition seems to have quietly slipped to the government's side.

Frankly, in past four days, I have not found any change in my Kitchen expense due to GST or otherwise. The so called pre GST sales are continuing in many shopping malls. All the petty shopkeepers have quickly learned the changes in billing system and book-keeping. They expect some glitches in filing returns in August (when first return filing in GST is due), but nothing alarming.

Many of my readers have asked me why I have not written on GST, when all sundry seems to be writing and/or talking about it. I may inform them there are two reasons: (a) I was busy writing about what I believe would be substantive structural reforms; and (b) I find the popular narrative on GST totally hypocritical.

The supporters are claiming virtues that cannot be part of a tax system. The new tax system is being presented as master stroke of PM Modi, just like the way DeMo was marketed. It is being termed the biggest tax reform since independence. Whereas the reality may be that it is an enormous administrative correction in the tax system of the country. But terming it a structural reform is subject to debate, in my view.

Those opposing GST sound ridiculously naive. For example, the argument that a 5% tax on textile will finish the entire textile trade is preposterous. The basic principle of indirect taxation is that the incidence of tax is always on the ultimate consumer of the goods and services. In principle, the manufacturer of goods or service provider or anyone else in the whole supply chain bear no part of the indirect tax.

For the benefit of readers who have sought my views, my take on GST as follows:

(a) GST is an enormous administrative correction in the tax system of India. The amount of administrative effort that has been put in making this correction is remarkable. The political will shown by the current leadership in bringing GST to life is also commendable. Be it expediting completion of GST Network, evolving political consensus at GST council level, and sticking to 1 July 2017 timeline despite intense lobbying from various pressure groups - the government showed tremendous determination and resolve.

However, the GST as it has been implemented, does not changes the basic structure or taxation principles followed in the country.

There are multiple tax rates, purportedly determined on the basis of socio-economic strata of the ultimate consumer. The classification of goods apparently lacks connect with the ground realities. It is clear that the effort has been to stay close to the status quo, insofar as the incidence of tax is concerned.

(b) GST will certainly bring about material systemic efficiencies and savings by eliminating redundancies. The benefits will mostly be shared by the government, business and consumers, with the government taking the largest pie. My guess is that the sharing of benefits will occur in the ratio of 60% (Government) 30% (Businesses) and 10% (Consumers).

(c) The argument of organized sector gaining at the expense of unorganized sector because of GST is mostly unsubstantiated. I feel, this process started couple of decades back and became conspicuous a decade back. GST at best may push the accelerator little harder.

(d) The primary concern of unorganized sector seems to be income tax not the GST. A large number of small businessmen have so far managed to stay out of tax net. Even a larger number has been paying only a fraction of the tax due on their income. With GST coming into effect, they fear, that concealing income will be an onerous and extremely risky task. The thought of paying full tax on income is agitating their minds. To make matter worse, there are fears that payment of full tax henceforth may also subject their past years transactions to tax scrutiny.

This again to my mind is part of the process that started few years ago. GST may have just set a deadline on blatant tax avoidance.

(e) GST, like any major change, would throw up many new business opportunities also. On a smaller scale accounting and audit services may gain traction. Business automation products and services may also see significant acceleration.

But the material opportunity (and for some threat) may come from the relocation and consolidation of businesses. The businesses that chose their location purely because of tax arbitrage or established to take advantage of tax concessions, may shift to better locations and consolidate. I believe cities and towns closer to ports, major railway junctions, major manufacturing hubs may see businesses relocating from tax havens like Baddi (HP), Kashipur (UK) etc.

The regional imbalances and inequalities may thus rise further. The real estate prices may also rebalance accordingly. The labor migration may increase. Unfortunately, I have not seen anyone discussing this as a collateral of GST.

PS: I have been asked by a friend, who happens to be office bearer of a trade association, to draft a representation seeking some concession under GST for the Association members. The primary objective is to make representation and assure the members that the Association is functional, rather than actually seeking any concession!