The recent slump in GDP growth rate after Modi Government’s structural reforms - demonetization and GST –gave an opportunity to the opposition to corner it.  The Government has described the slump as ‘just a blip’.

Arun Jaitley’s ‘major policy announcement’ press conference came with a detailed presentation on contrasting economy’s indicators during UPA from those during NDA years and how the economy is on a sound footing now. He announced a mega road building program and recapitalization of public sector banks.

An overwhelming majority of common Indians are behind PM Modi because they believe that the above changes are good for their future even if they cause hardships now.  Unfortunately, the opposition has reduced the whole debate to the level of ‘November 8 as Black Day’ and ‘Gabbar Singh Tax’.

 Jaitley’s Saturday interview by Arnab therefore was a perfect opportunity to engage with the man in charge of the economy and get a better idea of government’s plans. As it turned out, Jaitley handled Arnab’s questions with consummate ease that one expects from a veteran politician. But the ‘nation wants to know more’ from the Finance Minister.

The huge shift towards a more formal, cashless, and digital economy should lead to not just higher tax collections but more importantly, a faster and more efficient environment for businesses. Ideally, inflation and interest rates both should come down. Given the foundation of Jan Dhan Aadhaar Mudra platform, it should lead to all around growth, particularly in the tiny sector that creates livelihoods. PM Modi has said that the growth will take off. Though FM echoed this during the interview, he didn’t sound convincing – he said it might take one, two three quarters. His response should have been probed further.

Our financial sector, dominated by Public Sector Banks, is still beset with bad loans and business practices rooted in past. Large businesses are still not investing. Interest rates are still not coming down. But small and tiny businesses need credit. Are our banks equipped to deal with demand for small loans from new entrepreneurs? Will the MUDRA scheme be enough to meet their needs?

Will PSB recapitalization be enough? How will banks avoid the repeat of their lending spree of UPA days? What is the role of Banks Board Bureau under Vinod Rai? What has changed?  Shouldn’t we know more about the shape our financial sector is going to take?

Goods and Services Tax is the biggest reform that India has undertaken since independence. Its scope and speed are staggering. The FM was asked about the recent ‘tinkering with rates’ , ‘businesses not used to pay taxes’ and ‘ how about some relief for common man?’. Jaitley disposed off such ‘opposition party’ type questions easily.

Arnab should have asked: Doesn’t leaving petroleum products and alcohol sectors out of GST cause high rates and distortion? Which states were opposed their exclusion? If Congress is asking for GST below 18%? Did its state governments support inclusion of the above sectors in GST? 

Was the political compromise on GST at the cost of common man?  Jaitley ridiculed the idea of same GST rate for a luxury car and Hawai Chappal.  But, isn’t that the very concept? One can argue that GST with a single rate (barring very few items) ensures ease of compliance and reduces scope for litigation or extortion by tax officials. Surely, there is a scope for debate here?

 Can the GST platform handle peak loads –many CAs have complained of system delays while uploading returns. Workarounds or extensions of deadlines for Income Tax e-return filing system may be acceptable, but are they acceptable in a GST system? GST captures every single transaction in India’s economy. Is the GST platform capable of that? Will it stay ahead of the demand? 

Will a more formal and a digital economy be more vulnerable to cyber attacks by enemies? We want to know.

Jaitley rightly mentioned that cash that has come back into banks during the post-demonetization window is good thing because money is not anonymous anymore.  We know that Income Tax department has sent notices to people who deposited unusually high levels of cash then to explain and pay tax.  But we need to know what happens if many of them challenge IT notices or demands in courts. Is the government equipped to deal with litigation? Are the courts capable of handling it?

PM Modi had said that the Government will even go to the extent of appointing a special cadre of educated youth for dealing with benami properties. We need to know how well the exercise of benami property identification and confiscation is going.

The move to less cash digital economy with all pervasive Government oversight is forcing many businesses, traders, and high income professionals to start paying taxes.  Jaitley also mentioned that high level political corruption that marked UPA era is gone. All these are good things. But what is happening to UPA era scamsters? When common people are facing hardships willingly, are big corrupt politicians having a hard time? Arnab asked just one question about investigation in Robert Vadra cases and Jaitley said things take time when done according to law.

The impression is that the Finance Ministry is moving slowly, if not going soft, on corrupt politicians. Why it falls on MP Subramanyam Swami to file cases against Sonia and Rahul Gandhi in National Herald scam case?  Shouldn't we hear more from our FM about his department’s actions on financial crimes by politicians? Shouldn't we know what the reasons for slow progress in this area are and what needs to be done when all other sections of society are expected to move faster?

On the issue of job creation, Jaitley got away by talking about MUDRA loans for small businesses and said that there is no data on jobs the scheme has created. This was the worst possible defense on jobs front on the behalf of the government. Our FM should have been probed more on jobs.

Shouldn't Jaitley be asked about steps being taken for better data collection? The huge GST database opens possibilities of better data on jobs and money. Shouldn't our FM be asked about government’s plans?

Jaitley said inflation has come down. Does the ordinary Indian feel that she is better off when comes to her household budget?

We have opposition and most of mainstream media of ‘Gabbar Singh Tax’ type, we have praise of Indian Economy’s direction by overseas institutions like IMF and Moodys, and we have Government’s defense that rely on mainly UPA vs NDA comparison. We deserve a better public discourse.   

There was one good question which didn’t get a categorical answer from Jaitley: “Are you missing an opposition?”

Image Credits: Republic TV, https://www.youtube.com/watch?v=cEp4EN5UPcg