Two steps taken by the Modi government have dealt a blow to the way business is done in India. Short term impact has been disastrous though long term benefits will be good. The point is will people suffering listen and wait long enough?
1 - Demonetization of 8th November 2016
2 - GST of 1st July 2017
Demonetization at least temporarily has destroyed the informal sector mainly working on cash. GST threw the economy off balance for 2 months as everyone was busy complying to the new law. Job creation has been negligible and particularly the age group of 38 years and above are finding it extremely hard to find jobs. Many are simply sitting and waiting it out for the turnaround to happen. Many of these experience professionals have opted for raising funds and opening startups. The Middle class particularly is finding the going extremely tough. With no incentive to pay taxes demonetization has not been very helpful as 98% of the money has come back to the banks. Finding out who did what and whose money it is, is a herculean task and could lead to a lot of people being unnecessarily harassed.
The way out could be some creativity from the finance ministry like abolishing income tax as advocated by Mr. Subramaniam Swamy or at least taking a flat income tax of 10%. A massive Public Spend on projects could be another way to move forward. Massive incentivization to sectors that employ huge people forces could be another step.
1 - Demonetization of 8th November 2016
2 - GST of 1st July 2017
Demonetization at least temporarily has destroyed the informal sector mainly working on cash. GST threw the economy off balance for 2 months as everyone was busy complying to the new law. Job creation has been negligible and particularly the age group of 38 years and above are finding it extremely hard to find jobs. Many are simply sitting and waiting it out for the turnaround to happen. Many of these experience professionals have opted for raising funds and opening startups. The Middle class particularly is finding the going extremely tough. With no incentive to pay taxes demonetization has not been very helpful as 98% of the money has come back to the banks. Finding out who did what and whose money it is, is a herculean task and could lead to a lot of people being unnecessarily harassed.
The way out could be some creativity from the finance ministry like abolishing income tax as advocated by Mr. Subramaniam Swamy or at least taking a flat income tax of 10%. A massive Public Spend on projects could be another way to move forward. Massive incentivization to sectors that employ huge people forces could be another step.
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