Saturday, August 13, 2016


Overcast skies with a wet afternoon in store are the perfect foil to any good ideas it seems. As I kept waiting at the cafe, hoping for ____ to turn up, the depressing weather drew my attention towards it. Dark skies have this unique ability to draw your attention towards them more than anything else. Even in a market as busy as this, where the noise of the clanging metalware collides with the honking of vehicles packed like cattle on to a street, you cannot help but ignore it all, and continue staring into this bland emptiness. You see some odd people running around for cover, totally unhappy with all the water like a grumpy cat. And yet, they do not interest you more than a cup of steaming tea, while distancing yourself physically by a glass wall, and emotionally with a care-not attitude from the churning outside.

"Can I join you?" I heard a voice, from behind me, and I turned around to see a somewhat young-ish girl staring at me earnestly. Nothing special about her except perhaps her earnestness and curly hair, and a pair of glasses (those 'geeky or nerdy' or something called these days) obscuring her eyes. She perhaps sensed the confusion on my face, and hastily added, "there are no empty seats around." A quick scan was all that it took to affirm her claim, and given the opportunity to be a good Samaritan, I played it to the hilt. "Please seat yourself," I uttered softly, as I tried gathering my stuff thrown all across the table, while she sat down in the chair opposite mine.

It was not more than a few seconds before I resumed my empty gazing, only to realize that I now had a partner in crime. She seemed intent on knowing the secrets of the sky, as she kept looking at the sky. Raindrops kept sliding down the glass panel wall, perhaps too tired to run or walk down the path. Or perhaps they were just not interested in coming down, finding every possible way to delay the inevitable. I turned back to staring into that vast emptiness of the sky and beyond, as if meditating, though it is perhaps just another form. All of a sudden, the girl starts talking.

"Do you stare often at the sky?"

It seemed awkward, the question, as I turned around to see her staring at me for a change. "Why do you ask?" I spoke softly, curious to find the reasons for this question.

"Nothing. I just enjoy staring at the sky for no reason, and thought I had met someone who like doing it too."

"Don't you think it is a very personal question to ask?" I spoke. Staring at the sky is an intensely private thing to do. The sense of seclusion and freedom that it offers cannot be compared to very few things in the world. It has a Zen quality to it, allowing you to lose yourself to something else, while feeling free all the time.

"I agree," she spoke. A closer look at her revealed a sense of chattiness on her face, of charm in her voice. The waiter came up to her, and asked if she would like to have something. "A latte," she spoke, "and those wonderful almond biscuits that you serve with them would do, thank you!" The waiter slunk away from the stage, leaving only the two of us to muse and talk.

"Why do you ask the question?" I asked after a few moments of silence. Curiosity got the better of me.

"No particular reason really," she said, while she stared at me with a deadpan face.

"Are you random around people? Or was it a pointed question?"

"I am what I am," she remarked. "You don't have to answer the question; I am okay with it. But can't we keep silent company in staring at the clouds?"

I did not quite know how to react. It was a strange request in a life where one sees everyone seeking some meaning out of every little thing they do. Drinking the coffee, meeting people, working for someone - everything has a purpose to it. And yet, here was this girl, who just wants to stare at the dark sky, and randomly strikes conversations.

"Are you waiting for someone?" she began again. It feels odd when a random stranger wants to talk to you, and for some reason, you do not feel offended by the questions. Is this because you are enjoying the stranger's company? Or is it a consequence of anonymity, whereby nobody may judge you, or they may judge you incorrectly, much to your delight? I was not quite sure how to react to the situation. And yet, it felt good to have someone, as the coffee arrived, and she took it towards the window, to see someone just enjoy the steam and the coffee, while staring into a dark cloud.

"What do you think is going on out there?" she asked eagerly, as she drew attention to the milling crowds who were struggling to protect themselves from the steady downpour. "It almost looks like that famous rainy day painting you know."

I stared out, only to notice carefully the silhouettes of people scampering around. Yes, it did seem artistic, and perhaps even somewhat magical. And this moment to seemed to become above ordinary all of a sudden. Here I was, with a random stranger, knowing not why or how this discussion was happening. And yet, it was intriguing.

The girl just finished her coffee, and paid the bill. "Thank you," she said, "for not questioning who I am."

With that, she quickly exited the cafeteria with as much mystery as she entered.

After some time, ______ arrived. We greeted each other warmly with a hug, as she sat down.

"You know," she said in half jest, "you should not be seated here."

"Why?" I asked, surprised by her admonition. "What's wrong with this seat."

"I have been told that this table and corner of the cafeteria is haunted."

"Really? By whom? A girl?"

"You know that story?"

"What story? I was just joking!" I laughed nervously, even as my blood froze in absolute horror. Then she told me about a girl who would often sit in this cafeteria, but had died on a rainy day like this several years ago. Rumour was that she was often seen at this table by the visitors to this cafeteria.

I was quiet. Was that coffee unreal? I wondered, as I searched for the mug, only to notice that the only coffee mug there was my own.

Except for the cookies.

Wednesday, August 3, 2016

Why the GST Will Have Only A Marginal Effect On the Indian Economy - Yet It Is Important

Arun Jaitley in the Rajya Sabha on an earlier occasion (Courtesy: The Hindu)

The doors to this temple of the tax gods have been finally opened, and a new deity by the name of Goods and Service Tax (GST) is being prepared for installation with the Prana Pratishtha currently being undertaken in the Parliament's Upper House. While there are points being extolled in its favor, and state parties and regional leaders voicing concerns of revenue loss to their state administrative budgets, there is a near unanimous consensus on the bill being made a reality. The country is being unified into one market in terms of the indirect tax net. Even across the various cabals and lobbies the unanimous chants of 'this is a landmark reform' are gaining strength.
Even as we scour the layers of discussions and platitudes piling up across various fora, the benefits are being overstated. Yes, there is a need for a simpler taxation structure, and yes, free movement of goods and services should not be a problem. However, it is pertinent to note that the only comparable economy in terms of size and federal structure, The United States of America, has never indulged in entertaining this idea. Simpler taxation is certainly a utopia for everyone including state administrators; however, viewed from the prism of the political economy, one can notice several inconsistencies in the process. A GST in its present form takes away in a snatch the advantages of working in states that worked hard to simplify the processes in order to attract investments and greater economic activity. It will also benefit states that do not work towards simplifying such measures, awarding perverse actions on their parts. While the former loses revenue, the latter gains significantly. While this is being addressed through compensation, the change will make no significant impact on the fortunes of the poorer, less developed states. The policy structures being much simplified, and the inherent geographical amendments they own, the poorer states need not do anything about easing the business environment, thus continuing the status quo on the front of employment and overall development. For example, Maharashtra and Gujarat will continue to remain important investment destinations, while states like Bihar will fail to attract investment. Moreover, states that want to attract investment will struggle to find ways to provide incentives to potential investors.
Another interesting layer is the impact on transaction cost in the economy. Many transaction costs in the Indian economy are of an indirect type, and most belong to the informal, unaccounted economy. There are enough bribes that flow in this economy - be it at the checkpoint, be it the excise inspector, be it the underreporting, and be it the inability to trace low margin-high volume transactions that are the hallmark of the Indian economy (think your haircut, or your tailor refitting your dress). While transaction costs can be reduced partially, states have no incentives to reduce the transaction costs of the informal nature in the current setup. It is not clear if states will make the effort to simplify registration procedures, revenue reporting procedures, excise processes and a bevy of several layers of bureaucracy. Moreover, there are several delays in clearances that add further layers of transaction costs. While these are being addressed to some extent through several reforms, the inability to tap into the informal economy will persist. How will the government remedy this without resorting to tax terrorism? That question needs to be addressed suitably. It is essential to note that India has seen considerable growth periods without having a unitary market, and this had more to do with reducing transaction costs, and this clearly shows that considerable political capital has been spent over the past decade on something that only marginally addresses these issues. For instance, claims that buying a flat in Delhi-NCR would be cheaper are laughable, since the real challenge lies in a combination of demand-supply constraint, pre-tax property overpricing, and significant informal black money transactions thanks to underreporting involved. Au contraire, the prices would go up in the short run, as services will become expensive. This can be a major bitter pill in the short and mid term, given the service-sector driven nature of the Indian economy. If multiple GST rates are announced, this defeats the purpose of GST - a single uniform rate.
Another challenge lies in the benefit transfer to the end consumer.  As can be seen with fuel pricing, the end consumer never gets the benefit of falling prices; however, rising prices are immediately transferred to the end consumer. In no way is the end consumer benefited, so unless a mechanism that directly benefits the consumer - either in the form of a refund or a discount - does not arise, all such claims to benefit do not hold water.
All that said, GST does put forward advantages in a different sense. Increased revenue collection from indirect taxation can have a direct bearing on fiscal health of the economy. In a country like ours, where barely 20-30million people pay income taxes, indirect taxation has always been the real revenue source of the state, and this can be used as a bargaining chip by the middle class voters to directly push for lower income tax rates, pushing further towards the milestone of zero income tax, an idea which seems to be moving one step closer towards realization with the GST. It does make operations in the market easier. But the benefits will not be as great as are being bandied about.
So while the GST mantras are chanted, let us not fool ourselves about the benefits of GST.

What Vinay Sitapati Has Missed Out –The BJP-RSS’ View of India As seen in Fictional Writings by Deendayal Upadhyaya

  There has been a lot of discussion about Vinay Sitapati’s book on the Bharatiya Janata Party (BJP) in the pre-Modi era, especially the Ju...