TIOL - COB( WEB) - 916
APRIL 18, 2024

By Shailendra Kumar, Founder Editor

THERE is nothing sacrosanct about poll promises! They are hammily tasty eye-candy for ambivalent feelings! Hmm. Though election manifestos do not often carry high sanctity quotient in the eyes of voters but they constitute a vital piece of document for political adherents, political and economic analysts and clairvoyants for policy-related crystal-gazing! While stitching together their serious policy contours laced with a range of lollipop-schemes, all Political parties tend to exaggerate their performances in the past and also end up making hefty pledges if they are elected. A case of giving primacy to Trojan horses and fiscal algorithm! Freebies, concealed in shrewdly-designed shells of schemes, often dot every page of such pre-poll documents. In contrast to the main Opposition Parties, the BJP worked like a Trojan and consumed several weeks to finalise its content-rich manifesto. Though many analysts called the party a sluggard but the sparkle in the eyes of its key leaders, which could be noticed at its official release last Sunday, indicated that they were pretty sanguine about the pledges and the future roadmap, incidentally, detailed laconically!

I decided to take a deep dive into its 67-page document only because of my naïve assumptions that some of the pledges or schemes enumerated in the manifesto may finally see the light of the day in the full-fledged Union Budget 2024 provided the BJP is voted back to power, which seems highly likely! Intriguingly, the BJP seems to be more than gratified with the reforms done in the past on the taxation front! It has sparsely touched two not-so-significant points and preferred to devote many pages to slam-dunk social and economic schemes. One of the highlighting statements is about further simplifying the GST portal to grant more accessibility to users, especially MSMEs and small traders. Since this statement is devoid of much-needed flesh, it is difficult to prognosticate about what more comforting feature may be injected into the GST Portal. GSTN has, in the recent years, been quite innovative and consistent in catering new tool-boxes to the users even before the social media gets dotted with rancorous trolls over a missing utility tool! Anyway, looking at a raft of migrainous issues, the paucity of working capital emerges on top of the list for the MSMEs and also traders. If the new government is keen to pull a rabbit out of its hat to comfort a major segment of the economy, it should synchronise GST data with the RBI and let the banks create a separate credit-lending page auto-filled with GST credentials of loan seekers and credit up to certain threshold should be automatically approved rather than seeking basket-load of documents. Availability of faster credit, if possible, at a concessional rate, would go miles, enabling MSMEs to compete in the market and also contribute to India's exports efforts.

The second statement in the BJP manifesto is about honouring honest taxpayers for their role in strengthening the economy. It is, indeed, a motivating pledge. However, the only ailment I could diagnose based on the past records of the governments, is the missing consistency and commitment to carry on with such a scheme. A case of fits and starts! There used to be a Samman Scheme for the GST taxpayers. Even for the income tax, it was a regular feature but the same was sent to gallows without much explanation. If the BJP is, indeed, serious about it, let an institution be built over a period of time. Secondly, any honour linked to taxpaying behaviour should not be a mere piece of paper or a framed recognition certificate like gold or silver! Ideally, such honour should grant special treatment to the taxpayers. It should be more utility or facility-oriented. For instance, certain stars may be embossed on their PAN cards and holders of such 'star-studded' cards may be facilitated faster at airports through a special queue or even at government offices. The Union of India may sign an MoU with the States which need to be obligated to provide special window or treatment if such PAN-holders visit their offices for official work. In pith and essence, an honour granted by the government to recognise certain inspiring traits of a taxpayer, should always stay with the taxpayer despite being intangible! Yup, an honour linked to substantial or regular tax payment, needs to be designed differently. Let the honouree 'flaunt' it in his or her own modest way!

In contrast to the BJP, a quick glance at the manifesto of the Congress Party, reveals as many as 12 detailed points on taxation. The spirit of wording these proposals appears to be of umbrageous nature. Demonstrating mushiness, it commences with the resuscitation of the ghost of DTC (Direct Taxes Code), long put in a stone coffin; stable personal income tax regime; scrapping of 'Angel Tax'; lesser tax rate for MSMEs owned by individuals and partnership firms; tax relief to shopkeepers who are competed out by e-commerce platforms and autonomy (not specified) to tribunals like ITAT, GSTAT and CESTAT. It appears that its drafters were more worried about saving on shoe leather than doing a creative job! Anyway, on the GST front, it seems more disoriented by promising to substitute the GST laws in toto by GST 2.0 with a single tax rate and no levy on agricultural inputs. It also vows to re-design the GST Council and go for horizontal division of taxpayers between the Centre and the States and small taxpayers below certain threshold to be necessarily under State VAT. It also promises to euthanise the duplicitous 'Cess-Raj' of the Centre and would make law to limit union cess and surcharges to 5% of gross tax revenues. Interestingly, what Dr Vijay Kelkar has been advocating for some time but the same was always given tin-eared treatment, the Congress Party has promised a portion of GST revenues to be allocated to panchayats and municipalities. Though the BJP does not talk about sharing the GST revenues but boldly highlights its pledge to take steps to grant fiscal autonomy and sustainability to Panchayati Raj institutions.

On legal turf, the BJP has committed itself to revamp several economic and commercial laws to suit the fast-changing needs of the businesses. To replace the existing policy, the Namo 3.0 would draft a New Litigation Policy to reduce the litigation costs and also the number of cases in which the government is a party. In the same breath, the BJP has promised to completely overhaul the civil justice systems - very much like the criminal justice systems. The revamp would focus on simpler procedures, timeliness in dispensation of justice, fostering a more business-friendly and citizen-centric legal environment. Since it is not going to be its first rodeo and a few lessons being learnt from the previous case, the same set of errors may not be repeated! The BJP has also promised to expedite the e-Courts Mission Mode Project to finish the job of digitisation of entire court records and for easy conduct of online court proceedings. To deal with old cases in certain areas, fast track court for quicker disposal are to be set up. It has also promised to work toward improving legal framework to promote arbitration and mediation eco-system. In view of these promises, one may expect heftier budget allocations in the July Budget.

For the transport sector, the Union Budget may earmark oodles of resources and many new policies may be unfolded if one goes by a bucket of promises made in the BJP manifesto. Like the Bullet train project, Mr Modi has a dream for India to develop its own passenger aircraft. So, his new government would foster a commercial aircraft manufacturing eco-system. The government would also strengthen the civil aviation eco-system by encouraging MRO activities along with aircraft financing and leasing activities through the Make-In-India initiative. A step away from the prevailing arthritic eco-system! A new Amrit Kaal Civil Aviation Master Plan to transform airports into regional international hubs to be scripted with a vision to project India as the leading aviation ecosystem in South Asia. The new government would try to develop India as an efficient global railway manufacturing hub. For this purpose, research and development would be promoted in a big way. For the EVs, the BJP government would pump in eye-watering amount of capital to build a nationwide EV charger infrastructure to incentivise EV adoption. Besides developing a home-grown shipping industry, the BJP has committed to expand water metro services across many regions. In a nutshell, even a racy peering through the BJP manifesto indicates that the July Budget would be a bit longish and may contain many poll-promises related proposals on health, education, sustainability, manufacturing and also a new political goal like the Uniform Civil Code! Let's cool our heels and watch for what percentage of such promises is accommodated in the July Budget and also the next one in February 2025. Ciao!