{"id":34662,"date":"2018-10-31T12:45:46","date_gmt":"2018-10-31T07:15:46","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=34662"},"modified":"2018-10-31T12:45:46","modified_gmt":"2018-10-31T07:15:46","slug":"the-wrong-options","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/the-wrong-options\/","title":{"rendered":"The wrong options:\u00a0"},"content":{"rendered":"<p><a href=\"http:\/\/www.thehindu.com\/todays-paper\/tp-opinion\/the-wrong-options\/article19836099.ece\"><span style=\"font-weight: 400;\">The wrong options<\/span><\/a><span style=\"font-weight: 400;\">:\u00a0<\/span><\/p>\n<p><b>Context<\/b><\/p>\n<p><span style=\"font-weight: 400;\">GST and Demonetisation are not the structural reforms that will boost the economy<\/span><\/p>\n<p><b>What is GST?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">GST is an indirect destination based tax levied on the supply of goods and services. GST Law has replaced many indirect tax laws that previously existed in India.<\/span><\/li>\n<\/ul>\n<p><b>Benefits<\/b><\/p>\n<ol>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Level playing field for small traders in any part of the country.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">More efficient neutralization of taxes to make our exports more competitive internationally.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It will create a unified common National market.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It will make India a manufacturing hub.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"> Reduction in multiplicity of taxes now leviable on goods and services, leading to simplification.<\/span><\/li>\n<\/ol>\n<p><b>Disadvantages<\/b><\/p>\n<ol>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Increased costs due to software purchase<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">GST will mean an increase in operational costs<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">GST came into effect in the middle of the financial year<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">GST is an online taxation system<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">SMEs will have a higher tax burden<\/span><\/li>\n<\/ol>\n<p><b>What is demonetization? <\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Demonetisation is withdrawal of a particular form of currency from circulation. Notes of a particular denomination cease to be legal tender. In other words, the notes lose their value as a currency.<\/span><\/li>\n<\/ul>\n<p><b>Benefits<\/b><\/p>\n<ol>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Direct tax collections rose 19% in April-July of FY18 as more individuals have come into the tax net.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The digitalization of money transactions has gone up substantially in the past few months, following demonetisation.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Demonetisation has improved transmission in the banking system and led to the greater financialization of savings.<\/span><\/li>\n<\/ol>\n<p><b>Disadvantage<\/b><\/p>\n<ol>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Cash crunch<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Economic slow down<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Corruption at different levels<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Recalibration of ATM<\/span><\/li>\n<\/ol>\n<p><b>What do the critics of these reforms say?<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Demonetisation was a temporary demand shock that brought the wheels of commerce to a halt. It <\/span><b>failed <\/b><span style=\"font-weight: 400;\">to achieve its primary objective of <\/span><b>mass confiscation of illegal wealth<\/b><span style=\"font-weight: 400;\">. <\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">GST, is a fiscal programme to increase the government\u2019s ability to tax more citizens in the large informal economy, which also manages to<\/span><b> kill the scope of tax competition between States.<\/b><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Both GST and demonetisation are measures to <\/span><b>increase<\/b><span style=\"font-weight: 400;\">, rather than reduce, <\/span><b>the role of the government in the economy.<\/b><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It is not the lack of sufficient tax revenues that has held back India, rather it is simply the <\/span><b>lack of economic freedom<\/b><span style=\"font-weight: 400;\"> which impedes ordinary individuals from seeking to improve their economic status without any interference from the state.<\/span><\/li>\n<\/ul>\n<p><b>Way forward<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">What India needs is not increased tax compliance among citizens, but <\/span><b>pro-market reforms<\/b><span style=\"font-weight: 400;\"> that will make the country a free and competitive marketplace.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A government should allows free competition, without favouring special interest groups, either through pro-business or pro-poor policies, will also be sowing the seeds for improved living standards.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>The wrong options:\u00a0 Context GST and Demonetisation are not the structural reforms that will boost the economy What is GST? GST is an indirect destination based tax levied on the supply of goods and services. GST Law has replaced many indirect tax laws that previously existed in India. Benefits Level playing field for small traders&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/the-wrong-options\/\">Continue reading <span class=\"screen-reader-text\">The wrong options:\u00a0<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-34662","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704774479},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/34662","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=34662"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/34662\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=34662"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=34662"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=34662"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}