The 2014-15 Mid-Year Economic Analysis is singularly lacking in positivity. It’s almost as if its author has given up and helplessly accepts the constraints keeping India’s GDP growth at a lacklustre 5.5 per cent. It shares finance minister Arun Jaitley’s woeful complaint of a possible Rs 1.05 lakh crore shortfall in tax collections. Was there any effort to find out why this shortfall? One expects that an economic analysis document would discuss this as it could offer the government ways to kickstart the economy.
It already has the report of Parliament’s standing committee on finance that reveals the tax department’s shocking laxity in even collecting undisputed taxes. It said that direct tax arrears totalled Rs 6.75 lakh crore, and indirect tax arrears shot up to Rs 1.49 lakh crore. The committee also suggested cutting tax sops of '5.5 lakh crore in 2014. This is doable if the government attacks corruption and focuses on improving business climate.
Why is the tax department, that comes under the finance ministry, not collecting this Rs 8.27 lakh crore arrears? May be Arvind Subramanian, the new chief economic adviser, could look into this. This might even turn the whole analysis upside down. One expected some new thinking from the new adviser, even though his oficials have been churning out almost the same material for years.
Mr Subramanian, who spent several years in the US, needs to talk to young, tech savvy Indian entrepreneurs for new ideas in creating jobs, skilling workers and taking India to the next level technologically. For instance, the government’s National Skill Development Corporation, that was entrusted in 2009 with the task of creating a 500 million-strong skilled workforce, had till October 2014 created only a pitiful 34.8 lakh skilled workers, mainly due to old-fashioned thinking.
In contrast, a young entrepreneur at a business summit recently made a brilliant suggestion: why not incentivise 40 lakh medium and small enterprises to skill one entrepreneur each? You will have 40 lakh teachers creating 40 lakh skilled workers/entrepreneurs annually! So whether it is the NSDC or the finance ministry, there is a desperate need to get innovative thinkers who can implement Prime Minister Narendra Modi’s promise of robust change in reviving the economy.
