Can it give India a commonly understood metre of accountability? 

GST not just about numbers but unleashing potential of the worlds largest free market economy
Voices Opinion Monday, July 03, 2017 - 08:05

Speaking to chartered accountants and others a day after India rolled out the Goods and Services Tax (GST) on July 1, 2017, Prime Minister Narendra Modi said this quoting Chanakya. Time would eventually destroy the very opportunity it offered if one fails to seize it (I am paraphrasing). In other words, time and tide wait for none. There is therefore something inevitable about failure or success and the relentlessness of passing time and opportunity with it. The only way to ensure the success is faith and hard work. There is no short cut for work, power point presentations, marketing blitz and PR campaigns included.

I am not writing a granular analysis of GST tariffs, MRPs and products. I do not believe anybody can say with a fair degree of certainty where all of that will land. The GST has set a major direction for the country. The rest will follow. It is equally irresponsible to say the GST regime is all about perception. Politics is, to a large extent, about perception. But the GST will bring root and branch changes to how India will do business with itself and between itself. Deeply embedded in this is the issue of self-respect. If you lie and cheat, you are cheating yourself, something we as a country have to stop.  Honesty cannot be adjusted according to national borders that goods and services will cross. 

It would be too dramatic to say India is now poised on a razor’s edge in a do or die situation, but it would be churlish to deny that there is an opportunity for all of us to be less corrupt, more accountable and transparent and stop blaming others for the problems India faces. Maybe, just maybe, we can all stop complaining and bragging about ourselves or dissing the next person, put our heads down and see how we can pull together to make GST work. The 'I' has to to be replaced by the "we" and the "us." This idea of working for a collective good is a tall order in India, especially if I can get something for "myself" in the meantime and complain about how nothing works. The GST is about numbers, but it is not only about that. For me, it about unleashing the potential of the world's largest free market economy to grow vibrantly, create jobs, demolish artificial power centres and expose mediocrity. 

It is unfortunate that the Congress party stayed away from the rollout event. Their act speaks to almost everything that has kept India poor and begging and on a dole-track. Former Finance Minister P Chidambaram told the Indian Express has said the compromise expected of states was a forced one and the worst of many worlds will now surface. According to him, hastiness will lead to an increase in inflation. He may be right, but nothing good and valuable in life comes easy. As a nation, we have to learn to earn our right to protest and prosper in peace. Governments are voted in and out of power if they fail to deliver. The GST will be one barometer.  

Compromise is the essence of nation building and if engaged with in a spirited way - a major reform for example - it fluffs out the bad and useless. Fiscal literacy is not a bad thing and I am surprised none of the doubters have primed the benefits of understanding money, investments and growth. The tax collectors, the corrupt and the venal who hide behind paperwork, systems and past practices will stand exposed. It may take time, maybe even an entire generation before that happens but a continent of India's size and diversity cannot be built in a day. Internet connectivity, power-cuts, languages, reach, advocacy, comprehension - all will mingle and may not match initially.  I don’t trust people in the government who say the benefits will be felt by all in a matter of two or three quarters. It won't. But the opportunity staring us in the face is about us, Indians, rich and poor. It is also irresponsible to say poor people will benefit more. All Indians – rich, poor and in between – will benefit proportionately. Obviously poor sections have more to gain as they have nothing to lose. 

And here is another thought. Every now and then I get asked what builds national character among Indians. I wonder if the GST will finally give us a common language of accountability. Beyond the maths and the percentages, will we by accident or design stumble towards one common entity called the Indian market and the harmony it brings? The eternal optimist that I am, I think yes and it will not come easy. Before we get there, there are some national traits we need to discard. As a nation, we are neither leaders nor risk-takers. We have become a people who complain incessantly, expect shoddy and unprofessional work to be accepted as world class and expect the government to do everything for us.  We give up too easily or worse – worse – we ensure that “us and ours” are safe at the expense of others. Yes, we are very selfish as a people and the sense of building a community, a country and an entity does not come naturally to us. Our politicians reflect this. Our institutions reflect this. We, the people, reflect this. Sacrifice is an alien word for most of us.

As I watched Europe bid goodbye to one of it’s tallest leaders Helmut Kohl this weekend, the one thought that recurred in my mind was sacrifice. A true European, he was the man who reunited east and west Germany in 1990. I travelled through villages and cities then, as a reporter. It was clear one side had to foot the bill for the other. The cost – human and resources – of bringing up the other side to parity was huge. People complained, but none stopped. It had to be done. Just the possibility of traveling in the European Schengen space without visas, checks, border crossings, taxes and customs declarations cannot be lost on Indians who seem to be the most agitated about the problems GST will bring. There is no readymade recipe here. Only dictatorships have ready recipes. All else is a stumbling and learning process conducted in good faith. It bears repetition - the GST is a leap of faith for a country that must create at least 15 million new jobs year-on-year if we want to remain afloat. 

I have lived and watched Europe build itself from disparate and desperate dialogue and political diatribe to become one single market. The difficulties encountered by the Continent, the various pulls and pressures, harmonisation of taxes and rules which brought about the European Economic Area (EEA) providing for free movement of persons, goods, services and capital was a very bumpy road. When the EEA came into force in January 1994, it was a moment of pride for all the architects. Even today business environments in Europe vary, there are regional and sub-regional characteristics but businesses and politicians compete towards excellence, not the other way around. The small and medium enterprises (SMEs) are the backbone of Europe's strongest economies. The risk is differently shared.

The roughest ride in India will probably be the one for the SMEs. The heavy hitters, the big guys who go by the name of India incorporated are not the ones who need administrative and legal assistance. Many of them are a pampered lot. It is the companies with one or two fixed employees, the start-ups and those who want to go from the unskilled to the skilled sector where the rub will be rough. Books will have to be kept, the cost of administration will rise initially and states will have to own this juggernaut and turn it around for themselves. It will mean thinking beyond political opportunism and individual benefit. It will mean growing up as a nation, fiscally, economically and politically.  

I see an immediate strike against corruption. I hear often now that people with black money and undeclared wealth are wary. If fear has entered the language and sentiment, it is a good thing and it is about time paying taxes becomes normal. Corruption is a major problem across all sectors in India. Corruption has held us back for decades. The rich and the poor, all are corrupt in whichever way they can make the system work for them. The GST is an attempt to build that system back in a country. Meanwhile, here’s some information the government has put out on the frequently asked questions. 

Now, the least the naysayers can do other than displaying their absence of ambition, lethargy and promise is to stay out of the way. 

 

(Views expressed in the article are personal.)

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