Answering unfair criticism of the auto industry
Shekar Viswanathan | Vice-Chairman, Toyota Kirloskar Motors
The Times of India
Viswanathan responds to economist Arvind Panagariya’s recent article in The Times of India that outlined the ways corporates demand concessions from the government. He feels Panagariya failed to appreciate the achievements of the Indian automobile industry and doesn’t acknowledge the rate of GST levied on vehicles, ranging from 28 per cent to 50 per cent. Most margins go to the government, whereas the vehicle-maker gets only around 10 per cent of the cost of the car. Taxes need to be reduced by at least 10 per cent, the author says.
The “unjust enrichment of government” at the behest of consumers is why the industry seeks “rationalisation of taxes”. The author feels the government should focus on total revenue collections, rather than individual tax rates.
The improved technology and quality of the past two decades have enabled the auto industry to reduce defects, increase fuel efficiency and prioritise consumer safety — all of which come at a cost. The government enjoys a “disproportionate share of the price of a vehicle” in order to meet its budget needs. The automobile industry should be “applauded for its signal contribution to the Indian economy,” writes Viswanathan.
Striking a blow for investigative credibility
R.K. Raghavan | Former CBI director
The Hindu
Raghavan writes that probe agencies should be given more freedom and control as crimes are getting more complex and controversial each day. The judiciary enjoys “insularity”, private lawyers enjoy “immunity” but prosecutors and investigators are alone lacking support and appreciation.
Justice R. Banumathi and Justice A.S. Bopanna’s Supreme Court bench made a “sensible and reasonable” suggestion that said probe agencies like the Enforcement Directorate and the Central Bureau of Investigation need a “free hand to conduct their investigations”. Arrests were rare earlier, but now there is more pressure on CBI to “produce instant results”, the author says.
Two concerns have been discussed in court — “the right of an accused to get bail and the need for custodial interrogation by probe agencies”.
The earlier principle of ‘bail is the rule, and jail is an exception’ has evolved as increased crime means bail is no longer a routine process. Custodial interrogation’s function is to obtain maximum details for a case. Police custody means huge responsibility for the investigator, and requests for custodial interrogation only come after extensive deliberation. Probe agencies are under immense pressure, they should not be “choked”, but instead be given “freedom to be professional”, concludes Raghavan.
Consequences of abrogation
Haseeb A Drabu | Former finance minister of J&K
The Indian Express
By invalidating the Constitution of Jammu and Kashmir, the BJP government has “impaired” the “territorial integrity of India”, writes Drabu.
The Constitution defines the territory of J&K as, “The territory which immediately before the commencement of this Constitution was comprised in the Indian State of Jammu and Kashmir”. It was “ambiguously defined” because it was left up to the Constituent of Assembly of J&K to define comprehensively. J&K’s definition includes not only the existing state but also the parts occupied by Pakistan (Azad J&K and Gilgit Baltistan) and the areas ceded to China in 1963.
The Constitution of J&K, not India, made the full territory of J&K a part of India. But since this Constitution has been rescinded, this territorial definition also ceases to exist. Thus, “constitutionally speaking”, by virtue of the Constitution Order 2019, the central government has effectively “given up its claims on Pakistan Occupied Kashmir” and parts occupied by China.
The Constitution of India allows for “expansion” but there is no provision to “reduce the territory of India”. However, that is what the Constitution Order 2019 implies. There is “sufficient ground for it to be struck down by the Supreme Court”, concludes Drabu.
The meaning of Opposition
Valson Thampu | Christian theologian & former principal of St Stephen’s College
The Telegraph
Thampu writes that the collapse of the Opposition is worrisome for our democracy as without an “effective” Opposition we could head towards a dictatorship. Most opposition parties fail to show discipline, and instead “equate opposition with obstruction”.
Opposition parties often resort to blocking government policies, as seen when the BJP opposed the Goods and Service Tax when the Congress introduced it. In turn, the Congress also criticised the BJP’s GST, citing “bad implementation”.
The Opposition should be about resistance and not obstructing policies as this is “injurious to the welfare of the people”. Resistance can also give birth to reasoned debate. “Nothing is understood clearly until it is debated. (Yet) nothing that fails to generate clarity should be deemed debate”, writes Thampu.
The Opposition needs a “shared vision” in order to be “a coherent, effective force of resistance”. Recently in the Parliament, parties may verbally opposed policies, but did not vote in the same way. The survival of the Opposition will determine the “vitality and viability” of our democracy, concludes Thampu.
A central issue
Bibek Debroy | Chairman of Economic Advisory Council to the PM
Financial Express
Debroy argues that a restructuring of centrally sponsored schemes (CSS) — schemes where union government and the state government jointly bear the expenses — cannot be done without state consultation.
He cites the “Niti Aayog’s 2015 Sub-Group of Chief Ministers’ Report on rationalisation of CSSs”, which recommended that the “existing CSS should be restructured and their number should be reduced to a maximum of 30 Schemes”. However, instead of any reduction, the pre-existing schemes were re-packaged within 28 “umbrella” schemes. Thus, “the figure of 28 is misleading” and in actuality there may be more than 200 CSSs.
The problem of states finding it difficult to fund their schemes is an old one, writes Debroy. He points out four issues that plague the CSS currently — first, there should only be a limited number of CSS and CS — central sector schemes due to limited resources; second, while the seventh schedule was implemented to enact “optimal level of governance”, it is not “cast in stone”; third, the seventh schedule needs to be revisited for CSS restructuring; and fourth, the aforementioned move cannot be done without state consultation.
Growth prospects dim
Shankar Acharya | Honorary professor at ICRIER and former chief economic adviser to Government of India
Business Standard
Acharya warns that in the coming months, the GDP growth may fall even lower than 5 per cent. He identifies three primary reasons for this — first, the world’s leading economies are “decelerating” and it is unclear how long the global slowdown will last; second, post-June the high frequency indicators that include corporate earning, foreign trade data among other things “point to a worsening situation”; and third, the government’s “public recognition of the deepening growth crisis has come unconscionably late”.
Talking about a possible revival in the next financial year, Acharya argues that “there are many institutional and policy impediments to India recovering her high-growth performance”.
He identifies them — an unemployment crisis, significantly overvalued exchange rate that has stagnated export, a banking system dominated by the public sector, a decade of high fiscal deficits and public sector borrowings, distorted agricultural marketing, inefficient infrastructure, heavy-handed and unresponsive bureaucracy and an inadequately resourced judicial and police systems.
Thus, over the next five years, the average GDP growth may “well remain in the 5-6 per cent range”.
India should rid its trade policy of outdated priorities
Manoj Pant | Director of Indian Institute of Foreign Trade
Mint
Pant calls for a more holistic approach to India’s trade policy given the government’s aim for a $5 trillion economy by 2024-25 and the changing nature of global trade. He lays out three elements of trade — trade in commodities (imports and exports), in services, and FDI.
India needs to account for the growing intra-industry, explains Pant, in which imports and exports are intertwined. In order to export more “value-added electronic products”, there also needs to be an improvement in export of information technology enabled services (ITeS). This will also help India “move up the technology ladder” and establish itself among global value chains, or GVCs.
This is important, writes Pant, because being on the international trade map make inroads into foreign transnational corporations (TNCs) which bring in overseas investment once they enter a market. Trade policy and FDI are slowly becoming “two sides of the same coin”, explains Pant, which is something to keep in mind.