Economic Times (ET) Global Business Summit – 2015 was held at New Delhi on 16th and 17th January, 2015 which was attended by more than 700 global and Indian CEOs. In a rare appearance at media event, Prime Minister Narendra Modi used the said opportunity offered by the Summit to present his comprehensive economic and political vision in a 45-minute electrifying speech. Number of Indian INC, Global Gurus lauded Modi for his current assessment and new philosophy of business.
We, All India Federation of Tax Practitioners, were alive to the above Summit deliberations and the responses thereto of the distinguished personalities including Noble Prize winning economist, thinker, writer Mr. Paul Krugman of the U.S.A.
In brief, following are the highlights of the Summit:
• Maximum governance: Hon’ble Prime Minister said – “I have often called for Minimum Government, Maximum Governance. This is not a slogan. This is an important principle to transform India. Government systems suffer from two weaknesses. They are complex. And they are slow.
In life, people go on a ‘Chaar Dham Yatra’ to get ‘Moksha’. In Government, a file has to go to ‘Chattees Dham’ and yet not get ‘Moksha’!
We need to change this. Our systems need to be made sharp, effective, fast and flexible. This requires simplification of processes and having trust in citizens. This needs a policy-driven State.
What is Maximum Governance, Minimum Government? It means Government has no business to be in business. There are many parts of the economy where the private sector will do better and deliver better. In 20 years of liberalisation, we have not changed a command-and-control-mind set. We think it is okay for Government to meddle in the working of firms. This must change. But this is not a call for anarchy.
Why do we need the State? There are five main components:
The first is public good such as defence, police and judiciary;
The second is externalities which hurt others, such as pollution. For this, we need a regulatory systems;
The third is market power, where monopolies need controls;
The forth is information gaps, where you need someone to ensure that medicines are genuine and so on;
Last, we need a well designed welfare and subsidy mechanism to ensure that the bottom of the society is protected from deprivation. This specially includes education and health care.
We arrived at consensus with States for amending the Constitution to implement GST which is a major breakthrough. GST has been pending for over a decade. This alone has the potential to make India competitive and attractive for investment.”
• Digital India: “Digital India will reform government systems, eliminate waste, increase access and empower citizens. It will drive the next wave of growth, which will be knowledge-driven. Broadband in every village, with a vide range of online services, will transform India in a manner we cannot foresee.” said Mr. Modi.
• In response, among other distinguished speakers, Mr. Narayana Murthy, Infosys Co-founder, responded saying the speech was very inspirational. He (Modi) addressed the basic problem of creating prosperity. And that is about reducing friction in doing business. We had gone to sleep for a long time and just awoke. A sleepy mind takes time to wake-up…… we are seeing signs of country awakening. He further said – “along with reducing friction for business, the Government has to collect as much tax as possible by introducing a system that is easy to understand, easy to comply with, corruption free and is based on rules that are fair.” Additionally, he said: “the future of this country depends on improving our higher education systems and creating a platform for the exchange of views.”
In the context of the above Summit and background as outlined above, it is necessary for us as a National body of tax practitioners, to do our hard work in the matter of representing the problems of the profession and to have a continuous dialogue with the concerned Government authorities including the PMO, to serve not only our clients but people at large who pay direct and indirect taxes honestly for the growth of the country, but they hardly get any returns. Hence, the spending of the taxes by the authorities are required to be monitored should also be our social responsibility towards people in general.
Members and readers of the journal are therefore requested to respond to this piece of writing!
D.H. Joshi, Associate Editor