The years 2016 and 2017 were the watershed years for both Indian economic and taxation perspectives on count of two reasons and the consequent emergency steps undertaken by our union govt.
First is the sudden demonetization in 2016 end on account of fast drying up liquidity in the domestic banking system due to burgeoning NPAs in the respective balance sheets of nationalized banks and to reign upon the spiral of black monies. On first purpose to bring liquidity in banking system our govt. was quite successful and on reigning upon the black monies it was partly successful to reap good benefit by augment the direct tax collection through income declarations schemes up to DTVS, 2020 scheme.
But demonetization affected the market severely by de capitalization of businesses and consequent ballooning the national revenue deficits for poor indirect taxes collections. To combat with the said exigency govt. took three emergency steps, first to introduce the GST in most hurried manner with absurd increases of indirect taxation rate compared to previous VAT system along with de centralization of indirect taxation system in complete derogation of states constitutional right and the complete absence of judicial mechanism till to date most illegally for injustices with avowed purpose to combat the national revenue deficit, secondly by imposing huge cess on petroleum and LPG, railways passengers and freight fares, highway toll etc , thirdly printing huge monies to give impetus to the de capitalized businesses.
These measures bore huge successes by retrieving the banking system and national treasury from the red apart from bringing huge liquidity in the market accelerating the growth of businesses, job generation and govt. spending capacity till 2024 JUNE. Not only these indirect taxes and cess rejuvenated our sagging govt. finance but also successfully draped the reality of fast tattering most crucial direct taxes administration system due to severe shortages of man power.
Now the said most irrational short term measures have culminated on de capitalizing the 90% of people with consequent natural effect of slowing consumption, lowest national savings, unprecedented income equalities, fast declining job generation for drying market of businesses including our golden goose IT, wage cuts and helpless govt. against the inflationary barges of parallel economy of black monies for fast failing direct tax administration as deliberated in details by me in previous articles.
Adding to the woes are fast adaption of automation by the industries for survival and looming threat of grave and unprecedented global recession with no immediate solution first time in economic history.
On the other hand our national govt. in ludicrous mode of denying these grave realities for political survival without having any weapons in it’s arsenal to save the nation from this runaway disaster.
The very purpose of mine for aforesaid recitals is to bring light on the reasons and events which have brought the 90% people of nation on the edge of impending complete financial destruction and so the national economy within 2025-26 most probably. The writing on the wall is now clearly decipherable.
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