CA Amresh Vashisht, Meerut

CA AMRESH VASHISHTSuddenly India is standing with the fleet of question marks over the future of her economy. The shocking treatments to the economics have finally landed to a discussion of common man. Everyone is looking towards a mighty hero of this country Shri Narendra Damodardas Modi. Who recently claimed that he is not an economist? Of course he is not an economist but why is he much reluctant not to hear anything from the economists. A Statesman is he who foresees things. Is he a Statesman?  A politician is he who foresees what is going to happen. Is he merely a politician? The whole of the nation is confused by now.

In the words of the German philosopher Hegal-“The State is God on earth”. Modi is an expert in shock doctrine. The elevation of Arun Jaitely as Finance Minister of his Government was the first shock to the nation.  It was like the “shock and awe” appointment of a man who was out rightly rejected by the Amritsar electoral. His performance has simply resulted in street discussion for a simple term of Economic Meltdown .He definitely initiated the wrong doings with confidence and carrying the same with confidence through the series of faulty decision. The Shock and awe continued to demonetisation, IDS, PMGKY and now about to conclude it as Economic slowdown or meltdown.

The debate on the roads  clearly showed that the country is on the brink of a precipice and I do not think that the crisis which we are facing now is in any way less important than what faced France in 1937 when it passed the law of June 1937 or a similar measure National Recovery Act passed by the United States of America in 1933with a preamble  “A national emergency productive of widespread employment and disorganization to industry which burdens the State and foreign commerce and affects the public welfare and under mines the standard of living of the American people is hereby said to exist.”

The economic structure of our country is one and indivisible. If a province breaks financially, it will affect the finances of the Centre: if the Centre suffers, all the provinces will break. Therefore the interdependence of the provinces and the Centre is so great that the whole financial integrity of the country is one and it was a right time to move economy of the country under unitary control. A unitary state is a state governed as a single power in which the central government is ultimately supreme and any administrative divisions exercise only the powers that the central government chooses to delegate. The majority of states in the world have a unitary system of government. India has proudly joined the league of Unitary state by passing out the constitutional amendment and implementing the GST from the 1st day of July 2017. We can claim that out of 192 UN member states, India has joined as 166th member as unitary state.

GST is the realization of one supreme fact that It is not merely the desire of this Government that they should have a uniform tax structure under a title One Nation One tax to see that the financial stability of India is maintained at any cost and under all circumstances. This was the primary consideration before Modi Government, but implementation failed again, GST achieved the same path of failed demonetisation.

GST failure is the imminent danger of a financial breakdown,-that is certainly a much worse situation potentially a much more dangerous situation than economic instability. Economic stability may mean nothing to anybody or all things to all men if them is any danger of financial breakdown or economic disaster. Now the question is whether there   is danger of a breakdown or a disaster or its just another shock doctrine of the Modi Government .

Exactly 68 years ago  in the same month of October 1949 , The constituent assembly was discussing the article of the constitution giving power to the President of India to declare the financial emergency in the country. The ultimate result on the financial emergency finally placed uner Article 360.  The said discussion started by a note which tested the present time and quiet relevant today.

“I am afraid, looking to the paucity of attendance in the House today, that we are very likely to pass this article without mature care and attention being bestowed on it. It is an unfortunate circumstance that Depawali is so close. Honourable Friends are more keen on illuminating their homes during Diwali than on illuminating the darkness that seems to have overtaken the House at the fag-end. I hope, in spite of the paucity of attendance, those Members who are Present here will carefully consider this matter as to whether it would be necessary to invest the President with such powers when the financial stability or credit is merely threatened “

Article 360 of the Constitution of India .Provisions as to financial emergency.-

(1) If the President is satisfied that a situation has arisen whereby the financial stability or credit of India or of any part of the territory thereof is threatened, he may by a Proclamation make a declaration to that effect.

(2) A Proclamation issued under clause (1) –

(a) may be revoked or varied by a subsequent Proclamation;

(b) shall be laid before each House of Parliament;

(c) shall cease to operate at the expiration of two months unless before the expiration of that period it has been approved by resolutions of both Houses of Parliament:

The anxiety of the present Government under which we are living and are governed concern the economic condition of the country. Now, we know from our experience of our three years and six months of Modi Regime, that we have not stabilised our finances. Rather we have acted in haste and stopped our own chariot of success and confidence. The people faith in Government taxation mechanism is at the lower level ever since. I do not mean, therefore that there is an emergency now. I can only say, here is the economic picture before us; and whatever may have been the reasons that have led to it, they are of our making. It is neither the circumstances nor the world situation which has led to the present economic deterioration. This is not an emergency but a real emergency might arise with the constant declining in the GDP in coming quarters. The present going on quarter shall definitely be more declining from the previous quarter. We are in depression mode and implementation of faulty GST mechanism has forced the traders to sit idle in the month of July and August and shutting down the manufacturing lines by the manufacturer. We were not ready when we announced Demonetisation and we are still not ready for GST when we announce its implementation. A clear writing on the wall should be read by Modi Ji. Let he foresee things. He must also foresee what may happen in future. He should always be content with confining his ideas to the present. It’s not so simple to reject any one saying by declaring them Shalya , a character from Mahabharata, to signify prevailing pessimism about the present economic situation. The situation is alarming in real. The country can afford the Ministers especially the finance to learn by experience and left to face the consequences of their mistakes?

GST shall certainly change the economical scene. It shall also change the behavior of the business community. For GST we shall not merely require to change the mindset but DNA of the business. The regime is definitely in hurry as 2019 is knocking and the present mood of the masses has recently changed. It’s hardly a matter how many got effected because of lethargic attitude of the governance towards the common man. “No idea holds greater sway in the mind of Indians than the belief that it is possible to democratise governments, anytime and anywhere, under any circumstances.” They have learned from the 2014. The results are good till demonetization and GST. The present regime is no mood to take care of mood of the nation.  “Decades, if not centuries, are normally required for people to acquire the necessary disciplines and habits. But the present regime insists of taking up all the issues in one go.

If venture mooted out by way of demonetization shall end at democratization, It shall  be the transition from an authoritarian regime to a full democracy, a transition from an authoritarian political system to a semi-democracy or transition from a semi-authoritarian political system to a democratic political system. The outcome may be consolidated or democratization may face frequent reversals. Democratization itself is influenced by various factors, including economic development, history and society. The ideal result from democratization is to ensure that the people have the right to vote and have a voice and choice in their political system.

(About the Author– Author was Member of ICAI- Capacity Building Committee 2010-11 and ICAI- Committee For Direct Taxes 2011-12 and can be reached at email amresh_vashisht@yahoo.com or on phone Phone: 0 1 2 1-2 6 6 1 9 4 6. Cell: 9 8 3 7 5 1 5 4 3 2 having office at 1 1 5, Chappel Street, Meerut Cantt, UP, INDIA)

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Qualification: CA in Practice
Company: N/A
Location: Meerut, Uttar Pradesh, IN
Member Since: 17 Jun 2018 | Total Posts: 101
Author was Member of ICAI- Regional Research Committee 2013-14 and ICAI- Committee For Direct Taxes 2011-12 and can be reached at email amresh_vashisht@yahoo.com or on phone Phone: 0 1 2 1-2 6 6 1 9 4 6. Cell: 9 8 3 7 5 1 5 4 3 2 having office at 1 1 5, Chappel Street, Meerut Cantt, UP, INDIA) View Full Profile

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8 Comments

  1. VSR MURTHY says:

    (A) Demonetisation is the very first step to be followed up a number of followups to reduce (it is not possible to eliminate) black money. Thus it is immature to pass judgment on the same. It is true that a great initiative has been mishandled. allowing people to freely deposit cash into banks without any limit has completely defeated the measure. Govt should have made it mandatory to get an authorisation from income tax department to accept a deposit where the deposit exceeds (a) the sum of last 2 withdrawals from that account (b) the average daily deposit by 150%. (B) GST is a very good move and needs time to stabilise. (C) Economic slowdown and growth are cyclical and when the black money parallel economy received such a big kick in demonetisation, it is bound to attempt its vengeance. (D) When Sri PV initiated (you read it correctly, it is SRI PV and not SRI MANMOHAN SINGH / SRI CHIDAMBARAM), new economic strategies, we have had enough of these verbose (E) True, government has, with persistent downward revision of FD interest rates, ignored the depositors who make available the money to banks by postponing and scarifying their consumption, to fatten the bottom lines of borrowers ( FATHER, MOTHER AND HOLY SPIRIT OF NPAs) in the hope of better tax collections. May be it has no other option.

  2. rahil says:

    This govt is in hurry to do everything simultaneously. This is not the right way of doing things. They are trying to get a name for themselves in every department.
    I do not dislike the current govt, but they should focus on lesser projects. If they continue to implement so many things at once, they will only get failures. So it’s better do 1 thing, but do it in the best way possible

  3. sushil says:

    Although we have to trust our leader but the author is absolutely right in saying that there was case of lethargic governance at times. Some major steps should be taken quickly before the damage to the economy turns permanent

  4. GANDHI MOHAN BHARATI says:

    I have been watching various discussions on TV. Generally it is said that the slow down is due to lack of demand.
    Naturally when prices are high and one does not have the means to meet the necessities he is forced to reduce his demand. I as an old man was consuming one Kg of Horlicks a month; now I extend it as far as possible to two months because my pension has not increased that multi-fold.
    We the people of India do not have the luxury as our legislators who can incresae their Salary & Perks many fold at their will and that too unanimously.
    The mad Tax regime and illogical ministers who want more tax into the coffer and give all sorts of explanation

  5. Jatin says:

    Narender Modi is trying to improve the tax system. I as a CA stand with Narender Modi in his steps towards improvement of tax system. There may few difficulties in implementaion but that does not mean that we should start bashing him.

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