India to cut tax rates on some goods, services from Jan. 25

India's Finance and Defence Minister Arun Jaitley can be seen in this file photo.(Reuters)
Updated 18 January 2018
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India to cut tax rates on some goods, services from Jan. 25

NEW DELHI: India will cut rates on some products and services under the new Goods and Services Tax (GST), the finance minister said on Thursday, in a bid to encourage greater compliance as revenues have dipped since the landmark reform was announced in July.
The Goods and Service Tax Council comprising federal and state finance ministers, agreed to lower tax rates on 29 goods and 53 services from Jan. 25, Arun Jaitley said after the meeting.
Businesses have raised concerns about high rates of taxation and cumbersome processes in GST, billed as India’s biggest tax reform in 70 years.
Asia’s third-largest economy faces the risk of missing its fiscal deficit target in the current fiscal year as lower revenue collection from slowing economic growth and teething troubles with value-added tax launched in July hit the economy.
The goods on which GST will be lowered include biofuel- run buses, used motor vehicles and diamonds and precious stones.
Tax on sales of liquefied petroleum gas by private firms for domestic use has been reduced to 5 percent from 18 percent.
In the services segment, India will cut taxes on transportation of crude, gasoil, gasoline, jet fuel and services relating to mining, exploration and drilling of oil and natural gas, among other things.
Jaitley also said the council would consider including petroleum products under GST in the next meeting, but did not give details.
The South Asian nation’s tax collection plunged after GST was implemented in July, which hit the economy and complicated tax filings for business.
The country’s tax indirect tax collections have been falling since the launch of GST, reducing to 808.08 billion rupees ($12.66 billion) in November from 940.63 billion in July.
To curb tax evasion, the government plans to roll out online monitoring of inter-state transport of goods beyond 50,000 rupees from next month.


Indian manned space flight ‘by 2022,’ PM pledges

Updated 12 min 3 sec ago
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Indian manned space flight ‘by 2022,’ PM pledges

  • Modi highlights manned space mission and major health care initiative during independence day address
  • PM’s speech a campaign launch for next year’s elections, observers say

NEW DELHI: India is planning its first manned space mission by 2022, Prime Minister Narendra Modi announced on Wednesday.

Delivering his fifth independence day speech from the ramparts of the historic Red Fort in New Delhi, Modi said that the manned flight would be the culmination of India’s recent advances in space science.

“We have decided that by 2022, when India completes 75 years of independence, or before that, a son or daughter of India will go to space with a tricolor in their hands,” he said.

India will become the fourth nation after the US, Russia and China to send a manned mission to space.

In his 90-minute speech, Modi listed his achievements of the past four-and-a-half years and announced a new health care scheme that would cover 5 billion people.

Observers described Modi’s speech as a campaign launch for next year’s elections.

“No doubt next year’s elections are playing on the PM’s mind. The tone and tenor of the address reflects that,” said political analyst and author Nilanjan Mukhopadhyay.

As expected, the Indian PM announced his government’s flagship program, Ayushman Bharat, a national health scheme that will offer health insurance from about $5,000 to 1.4 million poorer families.

Popularly named “Modicare,” the scheme targets rural and middle-class voters and will be rolled out in the final week of September.

Comparing the past four years of his leadership with the previous government, Modi said that “the red tape has gone and now there is more ease of business — the sleeping elephant has started walking.”

He boasted that “India’s standing in the world has increased in the past four years and today when any Indian goes anywhere, all countries of the world welcome them and the power of the Indian passport has increased.”

However, the opposition Congress Party described the speech as high in rhetoric and low in substance.

“The Indian economy is a virtual shambles. The rupee has crashed to a historic low. Joblessness, farmers’ suicides, atrocities against marginalized Dalit groups, attack on minorities, corruption — all these show that the government has failed,” said Sanjay Jha, a Congress Party spokesman.

Aateka Khan, of Delhi University, said Modi’s speech was “hollow” and that “India has never looked as divided as it is looking now. He has failed to assure the besieged minorities about their security.”

Mukhopadhyay said the speech was “disappointing” and failed to reflect the vision Modi set out when he addressed the nation for the first time in 2014.

“He seems to be still blaming the opposition for the ills of the country,” the political analyst said.

Mukhopadhyay believes that “Modicare” ignores India’s huge infrastructure deficiency. “In the absence of good medical facilities, how are poor people going to benefit from the insurance?” he asked.

India’s 71st independence day also offered observers a chance to reflect and assess the country’s future.

“The legacy of freedom is under siege today. We as a modern nation state with secular principle are at a crossroads,” said Santosh Sarang, a political analysts based in the eastern Indian state of Bihar.

“The forces of division are more predominant today than ever before in this independent nation.”

Sarang said that “economic growth is not the only parameter that can make India great; keeping India together and preserving its syncretic culture is also important. The way the attack on minorities has increased and their sense of insecurity has been institutionalized make us question how long we can remain a liberal and secular democracy.”

He warned that “majoritarian Hindu forces now want to rewrite the Indian constitution to make it exclusive, not inclusive.”

Urmilesh, a New Delhi-based thinker and analyst, agreed. “What is at stake is the idea of India. In 1947, we took a pledge to make India a modern, progressive nation and tried to promote scientific temper among new generation, but today a new idea of India is being promoted which sees its future in majoritarian politics. This is very much against the spirit of freedom struggle and nation-building.”

He said that independence day left him “somber and sad” that fundamentalist forces, such as Rashtriya Swayamsevak Sangh and its protege Bhartiya Janata Party, which never participated in the freedom struggle and opposed the creation of a liberal and secular India, are ruling the country.

“The atmosphere in the country is so vicious that religious minorities and liberals have been pushed to the edge,” he said.

The right-wing activist Nirala, however, said that “the meaning of independence day does not remain the same all the time. We cannot have the same prism of looking at India as it was in 1947. What is happening today is the redefining of nationalism, which reflects the majoritarian thinking. Hinduism is the way of life in India and it should asserted unabashedly.”