TIOL - COB( WEB) - 915
APRIL 11, 2024

By Shailendra Kumar, Founder Editor

FOR the aficionados as well as boffins of fiscal school of modern economics, last Saturday evening was an awe-inspiring occasion! A sort of stampede of crème de la crème of public policy, applied economics and fiscal world! A large number of who's who were seen rubbing shoulders; high-fiving each other; diving into sotto voce tete-a-tete and also jaw-jaw about, perhaps, 'Freakonomics'! The occasion was TIOL Fiscal Awards' annual event. A large number of renowned economists of yesteryears and also of contemporary relevance, heavy-weight jurists, diplomats, serving and retired civil servants, media house patroness and senior editors of newspapers had assembled to listen to an elite phalanx of dignitaries who were invited to speak about the three maestros of economic and fiscal world - Prof Jagdish N Bhagwati, Dr Vijay Kelkar and Mr N K Singh. The 14th President of India, Mr Ram Nath Kovind, was to confer TIOL Fiscal Awards on them. Wow! An intaxicating air had substituted normal breathable oxygen over all the corners of Diwan-I-Aam - the auditorium at Delhi's Taj Mahal hotel!

After the conferment of the awards, the former President, in his valedictory address, underscored the ground reality that creating fiscal space, both to enhance the current growth trajectory as well as the productivity of investment in a digital era is of paramount importance. "No nation can prosper without predictability and certainty in the architecture of its economic policies. The fiscal architecture is one of its most important pillars. This will attract both private capital and improve the quality of public-private partnerships," he added. Mr Kovind further pointed out that the modalities of interface between the assessees and the assessors have also undergone a tectonic shift. Technology has made this possible and now increasingly, with the adoption of digital modes of communication, faceless tax assessment will rapidly become the path forward.

The former President was indeed pithy and precise in sharing his laudable foresight which normally dawns only on high-wire economists and seasoned policy-makers. Worldwide, fiscal space is embedded in the design of tax policies at the scripting stage so that the twin objectives of high growth and higher return on investments are not dented. Higher growth needs fuels from consumers who need to have more disposable income in their palm to sustain the demand curve. Secondly, higher productivity of investments keeps investors gummed to the economy laced with macro-stability. Mr Kovind intelligently underlined the ventricles of the heart of fiscal policies by highlighting the two key lynchpins - Certainty and Predictability. He also applauded the tide of tech-led change being driven by the Modi Government - the digital highway is the only path forward for both the revenue boards - the CBDT and the CBIC.

I feel indebted to the former President Kovind for recognising TIOL's role being played tirelessly for close to a quarter of a century and the space in which TIOL finds itself meaningfully engaged and relevant for all the stakeholders of the economy. He said: "An informed interlocutor always has a valuable role to play. In this sense, TIOL has been an important partner in championing a national cause in the area of tax policies, tax legislation and fostering a dialogue among all stakeholders." He also extended his good wishes to all those who have been responsible in steering this pioneering effort, and have more than two decades of experience in shaping responsible decisions. Thank you, sir, for your kind words! I personally dedicate your kudos to my colleagues Mr Vijay Kumar, Mr Sunil Achutan, Mr Shikher R Singh, Richa Nigam, Shankar Singh, Gurdeep, Aditya, Sumit Srivastava - virtually the entire team and, also to my mentors Mr D P Sengupta, Mr Naresh Minocha, Mr Rajnish Kumar and Mr J B Mohapatra for their time-sensitive creative contributions! Encomiums inevitably tend to put additional responsibility, particularly when it comes from as high a dignitary as the former President of India and also the Deputy Chairman of Rajya Sabha, Mr Harivans Narayan Singh.

While delivering his Acceptance Speech, the recipient of the Fiscal Heritage Award 2023, Mr N K Singh, observed that "Maastricht is dead and gone"! He asked: "Do we need a new Maastricht or do we need country specific determinants?" His observation has emanated from the prevailing geopolitical and geo-economic circumstances whereby the phenomenon of globalisation which has so copiously enriched the global economy post-Cold War, has begun withering away in view of the intense superpower rivalry between the US and China. After the Ukraine war and now Gaza, the West and the rest have been on a dangerous split-path. The forces of globalisation have begun to disintegrate. Multilateral bodies like WTO and IMF suddenly find their footprints rapidly shrinking! The Global South muscled players are paving their own paths imbued with geopolitical ambitions. The world is turning into a multi-polar planet when there are several global crises which need cohesive and coherent common approach to deal with them such as climate change financing, global supply chain, global debt, global poverty and food security. In this background, Mr Singh referred to Maastricht Treaty which was the driving force behind the European economic and monetary union - the birth of single currency namely euro. Against this backdrop, Mr Singh hinted - Whether the world would go for a new Maastricht (an industrial city in the Netherlands) type of integration model or opt for a bilateral mode of doing trade and commerce! He also hinted at a tectonic shift in the philosophy of growth with stability post-pandemic. He wonders how the global economy is going to cope with the new challenges emerging in the areas of food security, energy, public debt etc. He concluded his speech by stressing on the single mantra of fiscal prudence which no economy should lose sight of!

The joint recipient of TIOL Fiscal Heritage Award 2023, Dr Vijay Kelkar preferred to make suggestions for critical fiscal reforms that would take the GST regime to its next and most natural destination. He called for sharing of the GST revenue with the Third Tier of the government. And the key driver for such a change, he pointed out, is the rapid urbanisation and the fact that the urban India would make maximum contribution to India's economic growth and the nation's prowess to compete with major global powers. His second suggestion is to simplify the GST rate matrix. He said that the prevailing rate structure was designed 5 years back by keeping in mind the objective of revenue neutrality. He said that time has changed and the simplification would spur economic growth and also enrich revenue kitty. The third suggestion he made is about creating an independent GST Secretariat which is urgently needed to enhance the quotient of fiscal federalism. Equal stake of States needs to be honoured and also translated into action by ensuring independence of the GST Council's secretariat. I personally also feel so as the present structure of the Secretariat fuels skepticism and full control of the Centre which discomfits many a States.

The first recipient of TIOL Kautilya Global Award 2023, Prof Jagdish N Bhagwati, nostalgically recalled his college days friendship with Dr Manmohan Singh at Cambridge in 1950s and wondered how his friend, one day, became his Prime Minister. He also shared in great details his modest background and the role of his family in freedom struggle and how his family taught him the principles of fiscal prudence at early age. The Chairman of the 16th Finance Commission, Prof Arvind Panagariya, profusely showered praise on all the three fiscal juggernauts for their achievements and leaving behind robust fiscal frameworks. The Deputy Chairman of the Rajya Sabha, Mr Harivans Narayan Singh, also praised all the three for richly contributing to the faster economic growth of the country coupled with fiscal discipline. The TN Minister for IT and Digital Services, Dr P Thiaga Rajan, praised Mr N K Singh and called his tenure as Chairman of the 15th Finance Commission as his best for the seminal work done. He said that Tamil Nadu benefited from the recommendations of the Commission, particularly to reform the urban bodies. However, he expressed his skepticism about the present trend of effectuating the design of constitutional goals and insisted that India needs structural reforms for all-round development. The former RBI Governor, Dr C Rangarajan, elaborated the seminal work done by Dr Kelkar and Mr Singh. The former US Treasury Secretary, Mr Larry Summers, and the noted economist from London School of Economics, Lord Nicholas Stern, spoke at length about the outstanding work done by Mr N K Singh. Overall, it was a gala nite designed to chat about the 'sumo-economists' of India and spur a cascade of 'happy hormones' across all the stakeholders present inside and also outside the auditorium! It all ended in sync with what Alfred Marshall had said - "Economics is a study of mankind in the ordinary business of life!" Ciao!