Archive for June 1st, 2015

Why no one talked about real issues during one year tamasha?

June 1, 2015

TN Ninan former editor of BS hits the nail on the head.

He says why no one talked about issues that really matter to people:

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Moving from a Kisan-mukt Bharat to Krishi Vyavsayi Yukt Bharat

June 1, 2015

Interesting piece by Mr. Sanjay Dixit, Principal Secretary of Aayush.

He argues why Kisan Mukt Bharat (farmer free India) is a good idea:

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Rise of shanty towns and begging in Sweden..

June 1, 2015

Interesting story on this by Johan Wennström, an author and Ph.D. student in political science:

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Indian economy is more balanced than US…

June 1, 2015

Says Prof Stiglitz. This one is a useful reminder for why we need to be careful of govt. policy. It may look good over short term but what matters is  the eventual roll out:

Almost 25 years after economic reforms, how would you assess India’s tryst with free markets?

One of the points I’ve raised in my new book is about striking the right balance through economic reforms. In the US, we’ve lost that balance since President Ronald Reagan in terms of deregulation, lowering tax rates at the top and other policies. However, in India some important steps have been taken towards achieving a balance such as the rural employment guarantee scheme — that was an important step in supporting the bottom.

On the other hand, the market-friendly steps spurred growth. Between growth and protecting people at the bottom, the Indian economy has been more balanced that the US. However, in India there are problems such as the large number of people who have become billionaires, often through political influence and connections — and that’s not a good thing for free markets.

Prof Stiglitz has clearly leaned more towards left over the years which is no more news. What is significant is he came from a very similar establishment of elite US universities/World Bank/IMF which has pushed markets at all costs. How his (and few others) views have changed since several crisis have enfolded across world economy.

But this things about Reagan (and Thatcher in UK) is interesting. They were hailed as the reforms in 1980s which a lot of countries went ahead with. There have been successes but it has had its failures as well in forms of distribution. Markets may be doing a great job in efficiency compared to state ( which was a no brainer really). Where it has failed or less successful is in terms of distribution as things have piled up at the top without much trickle down. So, it is not as if all has been rosy and we areactually seeing the impact of policies done 25 years ago. Again re-emphasizing the importance of knowing history.

And this thing of Indian govt balancing the two is not something our economic experts have really wished for. They actually want govt to emulate the west and just allow markets. It is actually India’s really diverse and difficult democracy which has pushed govt to keep looking at ways to help their “not have” constituency.  This is how govts have always been in India. This has led to bleeding deficits and macro issues which has upset the elites and experts alike. Even the govt today which was brought under whole promise to please the elites, is reluctant to celebrate what it has done to please the market loving crowd.

Somehow it the burden of Indian socialism which keeps things balanced in India. This is both irony and reality of Indian polity and policy..

Finance Ministry brings out new 3-page income tax forms..Keep simplifying and nudging

June 1, 2015

India has actually gone backwards in trying to simplify filing taxes.

There was a time when there was just a one page form called Saral (simple in English) which was just a one page form. It required minimal details and was a huge step forward given complexities of Indian system. This was replaced by ITR sort of form which required many more details. Though e-filing has made things really easy but many people still use the paper forms given limited internet penetration and knowhow.

So this is an interesting development. The form has been simplified:

The Finance Ministry today came out with new three-page income tax return (ITR) forms, dropping the controversial provision for mandatory disclosure of foreign trips and dormant bank accounts, while it also extended the last date of filing to August 31.

The new forms – ITR 2 and ITR 2A – will have only three pages and other details will have to be filled in schedules, said a Finance Ministry statement.

A new form ITR 2A has been brought out by the ministry which can be filed  A new form ITR 2A has been brought out by the ministry which can be filed by an individual or HUF who does not have capital gains, income from business/ profession or foreign asset/foreign income.

The statement also said that the last date for submission of tax returns will be extended to August 31, 2015.

With regard to the controversial provision of disclosing details of foreign visits, the release said that the assessee will be required to disclose only the Passport Number. “In lieu of foreign travel details, it is now proposed that only Passport Number, if available, would be required to be given in Forms ITR-2 and ITR-2A. Details of foreign trips or expenditure thereon are not required to be furnished,” it said.

Further, the Ministry has done away with disclosure of details of dormant accounts which are not operational during the last three years.“As regards bank account details in all these forms, only the IFS code, account number of all the c”As regards bank account details in all these forms, only the IFS code, account number of all the current/savings account which are held at any time during the previous year will be required to be filled-up. The balance in accounts will not be required to be furnished,” the statement added.

The simplified I-T return forms are being brought after the earlier version was opposed by industry, MPs and assessees for its cumbersome disclosure norms.

More efforts should be made to simplify the tax filing process. These are really simple nudges which are really useful and are more than a bang for the buck.

It is actually a good research topic as well. Get all the tax forms which have been released by the govt so far and see the evolution. Ideally one would want to see a relation like whether simplification has led to higher tax numbers and so on.  This will be really difficult. So, a perception study to see how various forms are perceived by public.


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