GST fest in MINT

Vijay Kelkar, Poddar and Baskar continue with their long think-pieces on GST. They had written one last month on the formation of the GST Council. One would presume that most of what they write in this op.-ed. is backed up by some data analysis and scenarios-based analysis. For example, suppose one compensates for higher inflation rates with DBT as they recommend, would it not be a double whammy on inflation? A legislation that boosts prices one-time combined with a fiscal transfer?

Just as young economists and analysts ignore political economy, senior journalists focus more and more on political economy aspects. Wisdom for others lies in judicious combination of the two. Rajrishi Singhal focuses on the political economy aspects. For example, IRS vs. IAS.

He also talks about the possibility of ‘Federalism’ being upended if BJP ruled States win some upcoming State elections. That fear, even if it did not exist before, might be planted in some minds after this piece. The FM and his bureaucrats must go out of their ways to offer reassurances on that.

That made me think whether this exercise of implementing a completely a new architecture for indirect taxes in the country should not also have roped in behavioural science experts, coaching the MoF Officials, GST council heads, etc., in the art of persuasion, salesmanship and winning consensus, etc.

This is a drastic change involving processes that require multi-disciplinary talent.

So many angles must be kept in mind and unintended consequences must be tackled as they arise.

Remya Nair’s piece actually suggests that even as Dr. Kelkar and his co-authors wrote something, the GST council has gone ahead and decided on something else – multiple rates. The idea of cess to compensate States seems a bit whacky, at face value. The objections seem legitimate. Why not a higher GST rate on ‘sin goods’?

The people involved have my sympathies and even admiration. It is humongous exercise requiring so many skills. I wonder if human beings actually have that. The one they should have is the recognition that they do not have ’em all and seek advice, counsel and help, without shame. Will they do it?

Further, will the people concerned have the physical energy to concentrate for long hours? Will that be addressed during meetings?

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