GS Paper II –Government Budgeting.
Clues from the previous post-demonetisation Union Budget of 1978
- The presentation of the Union Budget, a look at the one presented in 1978, immediately after the demonetisation exercise undertaken that year, yields some insight into a few of the problems that the Indian economy currently faces.
Comparison between demonetisation of 1978 and 2016:
- The stated objectives of the demonetisation effort in 1978 were more or less the same as what Prime Minister Narendra Modi announced on November 8, 2016 — not counting the subsequent steady change in the government’s message from ‘eliminating black money’ to moving towards a ‘less cash’ economy.
- “The demonetisation of high denomination bank notes was a step primarily aimed at controlling illegal transactions,” the then Finance Minister H.M. Patel said in his Budget speech a month after the demonetisation exercise.
- “It is a part of a series of measures which Government has taken and is determined to take against anti-social elements.”
some of the economic conditions prevalent at that time were indeed quite similar to what exist now.
- For example, the poor state of private investment in the economy at the moment.
- similar to the current situation, where private investment is languishing and the government is encouraging people to put their money in banks.
- The government had in 1974 enacted the Compulsory Deposit Scheme (Income Tax Payers) Act which mandated that all those earning more than ₹15,000 a year would compulsorily have to deposit a certain percentage of that amount in banks.
Swelling bank deposits:
- “Already bank deposits post-demonetisation have swelled and banks are finding it difficult to deploy these resources as there is no demand,”
- In order to stimulate Private investment, I propose to give a deduction in the computation of taxable income of 50% of the amount invested in equity shares of new industrial companies,” Mr. Patel had said in his speech. “
- The maximum investment in a year qualifying for this deduction will be limited to ₹10,000.
Sources- The Indian Express, The Hindu.
GS Paper II- Important aspects of governance,Transparency.
Supreme Court appoints Vinod Rai to handle BCCI’s affairs
The Supreme Court on Monday appointed a four-member Committee of Administrators (CoA) headed by former Comptroller and Auditor General of India Vinod Rai to oversee the Board of Control for Cricket in India (BCCI).
The others are former woman Test cricketer Diana Edulji,
historian Ramachandra Guha and
IDFC Ltd MD and
CEO Vikram Limaye.
The four will function as the interim bosses of the BCCI and run the day-to-day administration of the cricket body till the Lodha reforms are fully implemented and elections held.
Key Points discussed were:
- Let the Committee of Administrators find out how many directions of the Lodha Committee have already been complied with, what were the impediments and report to us. Then we will see,” Justice Misra observed.
- The Bench said the scrutiny would help in the ‘smooth implementation’ of the Lodha reforms. The Lodha panel secretary and advocate Gopal Sankaranarayanan was asked to give the BCCI CEO a check-list of 16 timelines the panel had prepared for the BCCI and State associations.
- The CEO would consider this to prepare his compliance report.
To be paid for services:
- At one point, BCCI counsel and senior advocate Arvind Datar said the CoA should work pro bono (for free without remuneration) in the tradition of the former office-bearers of the cash-rich cricket body.
- “Why do you want them to work pro bono?” Justice Misra, on the Bench with Justices A.M. Khanwilkar and D.Y. Chandrachud, asked. “Why not? All office-bearers work for the love of cricket,” senior advocate Kapil Sibal, representing some member State associations, retorted.
- “Mr. Sibal, we want a professional set of administrators,” Justice Chandrachud said. The Bench advised the BCCI to come up with a ‘proposition of a respectable amount’ for the Supreme Court to consider as payment to the CoA.
The BCCI CEO, who was in charge since the Supreme Court ousted former BCCI president Anurag Thakur and secretary Ajay Shrike in a January 2 order for stalling the Lodha reforms.
Ordered to submit a report to the CoA detailing the level of compliance achieved by the BCCI and its members in adopting the Lodha recommendations upheld by the court on July 18, 2016.
Sources-The Hindu, The Indian Express. Page 33