GST—NEITHER GOOD NOR SIMPLE?
Dr. K. ‘Kali’
GST is neither good nor simple. Although the government claims that tax structure reforms would be rationalised in such a way that they remain good for masses and simple for administration and taxpayers. No doubt it is very difficult to create simple tax structure in the complex world of finance. It is rightly said that simplicity is the ultimate sophistication. Once R.W. Emerson was asked the essence of wisdom and replied- simplify, simplify and simplify, and then remarked that one time, simplify is more than sufficient. It highlights the significance of simple to understand, easy to calculate and administer tax rate structure.
No doubt it is very difficult to create simple tax structure in the complex world of finance. It is rightly said that simplicity is the ultimate sophistication. Once R.W. Emerson was asked the essence of wisdom and replied- simplify, simplify and simplify, and then remarked that one time, simplify is more than sufficient. It highlights the significance of simple to understand, easy to calculate and administer tax rate structure.
Reacting to growing discontent over GST, the government came up with far-reaching changes in the existing GST provisions. The field of public finance is very fascinating, as it deals with how government raises income in the form of taxes to meet its ever-increasing expenses. Unlike an individual, the government first estimates its expenditure, then imposes taxes and raises income to meet this expenditure. Kautilya in his ‘Arthshastra’ says the burden of tax on the public should be minimum and raised in such a way that it involves minimum pain, as butterfly sits on flower takes essence (honey) from it. But nowadays, government behaves in this matter to the extent of exploitation.
Public finance has two dimensions- one to collect taxes and another spending the public money on public goods. As far as the first aspect, imposition and collection of tax, there is debate and discussion and there is much dissent and in media, there is a hue and cry, the government yields to make desired changes, as it happened in the case of GST.
But the other aspect goes totally unnoticed. How much is the government spending, whether it is spending on production items or totally unproductive or consumption items? When everything is being privatised, even development activities are being outsourced, why people should pay taxes to the government. Even the very important public fields like education, health and employment, the government is asking the private sector to come forward and share its responsibility.
No matter expenditure on ever increasing facilities and perks to ministers and other political VIPs like Chairmen of Boards and so on is not checked and has no upper limit and resource constraints. These huge army of political VIPs are privileged to squander the hard earned money of common man. A common government employee, who joins as a youth, gives his entire productive period of life to service, is not entitled to a pension, but an MP or MLA once elected gets paid pension not for five years, but for whole life. In a democratic form of government, there politically VIPs claiming themselves public servant, lead the
In a democratic form of government, these political VIPs claiming themselves to be a public servant, lead life like a king and monarch and have amenities and luxuries available only to emperors of older years. This is sickening. Here is an anecdote. Once a Seth promised to a charitable or religious institution one lakh rupees. When the representative came to collect the promised money, he observed that the Seth who was writing the cheque took a matchstick from his matchbox, cleaned his ear and threw it on the floor. The Seth changed his mind and wrote the cheque for only a thousand rupees. When asked why he changed his mind to give thousand rupees instead of the promised one lakh rupees, the Seth replied why he should give money to an institution which would not take care of his hard earned money. He assumed that his given wealth would be used for good purpose, but he could not see his resources being wasted and not properly cared for. But as dutiful taxpaying citizens, we don’t have this alternative. Taxes are as certain as death.
So there is urgent need to be awakened and raise the voice in this regard also. Democracy is an expensive form of government, but the way our representatives are squandering the public money only on unproductive heads, rather than on development items is shameful.The national resources are meant for common man and development for all. Spending is as important as raising of resources, but in case of public money, spending is rather more important and that too on productive heads.
(The author, a noted economist, is responsible for the opinion shared in this article)