Monday, April 03, 2006

When will India be a common market? GST by 2010?

Time to integrate into a common market, its high time we stopped focussing on carving out separate states from the land. This has been in discussion since the 1950s. Now, its possible due to IT.
The European Union has become an Economic Union with one currency, free mobility of factors of production(men, money and materials. We have a single currency in India ever since our Independence. But what about a common market?
For that to happen there needs to be a single rate of Goods and service tax that is levied on all transactions across the country. As of now we have VAT, but there is a divergence of rates across states, there is octroi or entry tax that delay consignments. There are CENVAT, MODVAT, what not. All this only leads to huge inefficiencies, scope for manipulation and subjectivity.
The result? Why to perpetuate corruption another name for rent seeking, not for any service provided, but to facilitate transactions. Our corporates spend their time not increasing productivity to compete globally, but in battling the capability of the system to destroy productivity.
On the other hand, it affects 'public' services equally. Tonnes of wheat rot away in Punjab and Haryana one year, because the Food Corporation of India finds it too expensive to transport it to states like Orissa where people are starving for want of food. Too many taxes along the route!(The state will tell you that rotting mango kernels are traditional food for the rural populace, but don't for a moment believe them. No one cares for the voiceless downtrodden, and the media attention fades away, inevitably, as another crisis intervenes.)
In the name of National integration...don't just keep singing Vande Mataram. Think economics. Think Common market.

Vote for Higher productivity
Vote for more jobs.
Vote for cheaper goods and services.
Banish shortages.
Banish the ghost of the licence-permit raj.

1 comment:

Nikhil Narayanan said...

hey,
read ur comment on readbetweenthe ps that u have SEC Urban classification..care to fwd it at
nikhilnarayanan@gmail.com
me doing MBA at SIBM,Pune..
now doing summers in VIP Bags, Mumbai