In a country where every seventh person on the earth resides, it cannot happen that there’s only one big news, covering one person out of a billion, for a complete month, especially when we are talking about 2020 – the pandemic year. There are four pillars of democracy and certainly one is not performing its job here. The mainstream media and the hashtag community is keeping us behind in a situation where a virus has already taken away our decade’s work.

Future is uncertain and businesspeople always account for it; however, this time a lot is at stake and clarity is yet to be excavated. You might be confused about the future course of action, whether to build or not, start or postpone, stay safe or ride the risk – well, rest assured, you are not alone, everybody here, is confused. You are confused, people are confused and so is the Government; and if the communication line in between doesn’t perform its work responsibly, well, we are in a state of mental lockdown here, although the material world might be unlocking itself. Let us bridge that gap with a roundup of what’s happening in the real world to stay abreast of the present and clear about the future.

Vaccine Development

A virus which spreads so easily can only be quarantined if an effective vaccine is developed and injected to every person – even a few individuals left out can spread the virus again. While the current focus is on the development of the vaccine, the Government also needs to be prepared with an effective plan to disperse the same. There are atleast 21 vaccines under human trials around the world. India has three vaccines which are undergoing human trials –

  1. Covaxin developed by Bharat Biotech and Indian Council of Medical Research (ICMR)
  2. ZyCov-D developed by Zydus Cadila
  3. Covishield developed by Oxford University for which Serum Institute of India is undertaking trials in India, while AstraZeneca will be manufacturing the vaccine for India.

All vaccines have to undergo three phases of trials which can take more than 6 months to test on a variety of humans, and study the results, as a wrong vaccine can be more fatal. Thus, if successful, India may get a vaccine by January 2021. Meanwhile, Russia has declared successful testing of its vaccine to become the first nation to do so, however, the fast track development of a vaccine has drawn outrage over safety, across the world.

New Education Policy

After 1968 and 1986, in a world which is changing over the decades, the long-overdue reform in education policy was finally released. The key change in the policy is the ‘5+3+3+4’ design of education instead of ’10+2’ structure, for age group 3-8 years (foundational), 8-11 years (preparatory), 11-14 years (middle) and 14-18 years (secondary).

Some of the key recommendations are as follows:

  1. UGS, AICTE will be replaced with one single Higher Education Commission of India
  2. Opening up higher education to Foreign players
  3. Multi-disciplinary programmes (allowing free choice of subjects across streams e.g. economics for science students) and also all institutions to become multi-disciplinary (instead of stream specific) by 2040.
  4. Flexible bachelor degree courses with multiple exit options such as one year with a certificate, two years with a diploma, four years course with one year research allowing entry into one-year master’s programme or five years integrated bachelor-master’s programme.
  5. Mphil to be discontinued, entry to PhD with four-year bachelor programme where one year is dedicated to research or after a master’s degree.

While the policy presents a promising picture, the implementation of the same would require mutuality of the Central and State Government and passing various laws in the parliament and legislative councils, education being concurrent subject. Besides, every state is free to adopt its version of the policy as Tamil Nadu has a two language programme, instead of three as in other states. In 2013, foreign universities did not show any interest when invited to India. Thus, the implementation might take years.

Taxpayer’s Charter

  • Delivering on the budget speech, the Government has introduced the Taxpayer’s Charter which enshrines in law the rights and duties of the taxpayers.
  • Here’s what the taxpayer’s charter says about its commitment to taxpayers:
  • Fair, courteous and reasonable treatment
  • Treat taxpayers as honest
  • A mechanism for appeal and review
  • Complete and accurate information
  • Timely decisions
  • Collect the correct amount of tax
  • Respect privacy
  • Maintain confidentiality
  • Hold the authorities accountable
  • Enable representative of choice
  • A mechanism to lodge complain
  • Fair and just system
  • Public service standards and reports
  • Reduce the cost of compliance
  • Following are the expectations from the taxpayers:
  • Be honest and compliant
  • Be informed
  • Keep accurate records
  • Know what the representative is doing on behalf
  • Respond in time
  • Pay in time

As idealistic and existing it might sound, the taxpayer charter allows officials and taxpayers an official reference in law to claim their rights or mark their duties, if they are being scrutinized, or approach the Taxpayers’ Charter Cell under the Principal Chief Commissioner of Income-tax in each zone for compliance to this charter.

Faceless Assessments

A Central computer will pick up tax returns for scrutiny based on risk parameters and mismatches. The case will be randomly allotted a tax official in any city. The scrutiny by these tax officers will be further reviewed by some other tax officer in another city. Notices will be sent by the Central computer and taxpayers are expected to answer them electronically – Welcome to the New Tax Assessment System – No visiting tax departments, no harassment by tax officers (or vice versa), no bribery, no corruption. Cases would be selected for physical appearance only when there are serious frauds, tax evasions or other crimes involved.

This is one of the best policy changes that has been brought in the tax system of India since a while now.  However, there are serious questions around its successful implementation:

  1. Will the tax officials abide by the rules? There is already a letter submitted by the Income Tax Employees’ Association raising concerns over the new scheme.
  2. How will grievances be redressed? Are written communications alone going to be sufficient explanations and effective for the assessment? The written communications between the taxpayers and officials in our country, as on date, are not something that we can rely on.
  3. The system is moving on to be based completely on the statistics. However, numbers do not always represent the complete picture, thus, certain taxpayers might be inadvertently tagged on the risk parameters.
  4. The statistics would be generated based on the previous filings and reports from various authorities like CBIC, RBI, etc. and information collected from institutions such as banks, hotels, credit card companies, etc. Will the information flow appropriately from one end to the other end? If not, how will the taxpayer clarify such situations? Or the assessment system account for it?
  5. More problems would arise when the actual implementation occurs, however, this move is towards the right end and after a few years of disruption, we might see a better assessment system.

National Recruitment Agency

In a welcoming move, Government has announced to set up a National Recruitment Agency (NRA) who will conduct a Common Eligibility Test (CET) to screen candidates for all Central Government jobs. This would significantly reduce the recruitment cycle and ease the process of obtaining Government jobs. The Government has approved INR 1,517 crore to set up the National Recruitment Agency. over a period of three years. The fund will also be used to set up examination infrastructure in the nearly 117 districts.

National Digital Health Identity

In times of pandemic, the biggest realization is about our health – how we are and where we stand. Realising the same, the Government has announced to launch a massive program where every citizen would be given a health ID  which would contain information about medical data, prescriptions and diagnostic reports, previous hospitalisations, etc. This would ensure that the Government, as well as the doctors, will have a patient’s medical history in hand.

However, the safety and security of the data become paramount. The idea proposed by the Niti Aayog makes the health ID optional, however, as with most Government schemes, it would become imperative to participate, if not mandatory by law. In 2005, the UK Government initiated a similar program to create health records by 2010. However, the program was unsuccessful and resulted in £12 billion loss.

Negative GDP,  false hopes, 5 trillion is off the tables

For the first time since 1996, India has recorded a negative quarterly GDP growth rate for the Q1 of 2020-21 owing to pandemic and lockdowns. India’s GDP contracted 23.9% with manufacturing sector contracting 39.3% and construction sector 50.3% which is much worse than the same predicted by the analysts. This officially ends the country’s chase to 5 trillion dollar economy by 2024.

Cannot pay GST compensation due to ‘Act of God’

The Ministry of Finance revealed that the Centre would not be able to pay the compensation cess to the states. While owing to the current economic situation this was around the corner, the excuse that the Government has used has raised eyebrows of many – ‘Act of God’, a clause that private contracts contain to indemnify one or both parties from carrying out the contract due to events beyond control. Instead, the Government has offered borrowing options to the states which may involve lower interest rates.

When GST was introduced, the Central Government offered to compensate the states with the shortfall in the GST collections. While the idea seemed appropriate, what sounded unreasonable was 14% annual growth rate of the collection – even when GDP growth rate was in single digits. State Governments happily accepted the GST proposal back then.

Reliance and Adani Group spoiling level playing field

Two years ago, India launched a program to private the airports and use the proceeds for government schemes. However, all six airports went to one bidder – Adani Group. Meanwhile, Mukesh Ambani who launched Reliance Jio in 2016 single-handedly crushed all competition with only Bharti Airtel and loss-ridden BSNL left in the competition while Vodafone Idea is struggling to pay the AGR dues. This is not the end of the story, as the recent activities by Reliance Industries such as acquiring Future Group, the launch of JioMart, copy-pasting Google Meet to create JioMeet, plans of acquiring Urban Ladder, etc. have brought up the issue again – Will India be dominated by handful capitalists? The need for better competition policy is being felt more than ever.

Coalfields at the cost of ancient forests

The Government has announced that 40 new coalfields would be opened to mining to boost the economy and reduce imports. While the move promotes the Self-Reliant India plan, these coalfields are located in India’s most ecologically sensitive forests. The coalfields will be privatized and amongst the top bidders will be the Adani Group which operates the largest coal power plants in India. India is the second-largest consumer of coal in the world with annual imports of 247 metric tonnes. The move also comes as a surprise as the Government had announced recently its ambitions to promote green energy and renewable sources, at various forums.