Saturday, 7 November 2015

GST (Goods and Services Tax)

As one of the biggest tax reform in India in the modern time GST is aimed at integrating all the states to make India as a single market. As on today there are 140 countries in the world where GST is already applied. France implemented GST in 1954. India is about to follow a two stage GST like Canada and Brazil. Central GST and State GST. 

Benefit:

This taxation system is based on the the collection from a consumption point instead of a origin point system. As a result the states that are net consumer will stand benefited from the system. State of West Bengal and Kerala will get benefit from the system and states like Tamil Nadu and Gujrat will loose. This system will give the consuming states more tax to improve system and increase consumption. It is estimated yearly India will benefit by about $ 15 billion from implementation of GST.

Implementation problem:


There are a few obstacle in the way of GST, first getting it passed in the Indian Parliament (mainly in Rajya Sabha) where NDA does not have the number and not likely to have the number till 2018. Second some states confirmed to the Center that their infrastructure and information systems are not yet ready to implement the GST.

Friday, 6 November 2015

Modi Governments position in Rajya Sabha till 2019

Lok Sabha seats and voting power


Indian Lok Sabha Seat distribution and voting power is relatively simple. Every state and union territory has some defined no of seats, members get elected at the local level to represent the population. In Lok Sabha there are a total of 543 seats and each member have equal voting rights.

BJP Government's power


BJP Government has absolute majority in the Loke Sabha till 2019, and they can pass any bill there without support from any other party.

Rajya Sabha seats, voting power and election method


Indian Rajya Sabha (RS) Structure is more confusing to most of the Indian population. As a no of bills getting stopped at the RS, people need to know the way it is formed, its transformation over the 5 yrs cycle and Governments power at those points. Its important to predict the outcome of the Indian parliamentary procedure. As on today total no of seats in RS - 245 Elected - 233 and Nominated - 12

But its a permanent body. At no point of time all the members are changed. Each member and position has a tenure of 6 years. Each member has a joining date and a retirement date. In every 2 years 1/3 rd of the assembly gets retired.

BJP Governments position over time till 2019

Current Position of Major Powers 


BJP - 48 and NDA - 64
Congress - 68 and UPA - 70

Change in 2016 and 2018 


If we calculate the change in favor of NDA in 2016 and 2018 then NDA figure will go from 64 to 72 in 2016 and 80 in 2018. (calculation is based on the state elections won by BJP from 2011 and its relative MLA seats in addition BJP has not lost power in any of the states in this period.

So the RS power will still be against of BJP till 2019. If BJP fails to make impact in next UP and West Bengal election then they will find significant difficulty in passing bills in RS. Because they won't even have a simple majority. In view of the fact that all the regional parties are against BJP at this moment, and the situation is unlikely to change till 2019. Indian RS will be more important then ever in Indian politics.