FM opens up on North vs South, Congress,GST, IncomeTax & India’s Economy IBP

ITS MOTIVATION TIME

Transcript

00:00:00When it comes to the question of economy, which is going to benefit everybody,

00:00:05the politics cannot be so disrupted.

00:00:08Once upon a time, Prime Minister Rajiv Gandhi said,

00:00:12if I send one rupee to the beneficiary, he ends up getting only 15 paisa.

00:00:18Adopting technology, Prime Ministers ensure that that kind of leakage doesn't happen.

00:00:23One rupee sent is one rupee received.

00:00:25One of the most crucial ministries in Modi's cabinet,

00:00:28the Ministry of Finance has been entrusted to Nirmala Sitaraman.

00:00:31She's one of the top ministers in the government of India.

00:00:34So only 1.5% of India's population is the taxpaying population,

00:00:39whereas for China, this is 10% and in the US it is 43%.

00:00:43Why is our tax base so small?

00:00:45As long as you are earning more, you and your family are happy.

00:00:49But the moment you are under the tax net, you think the government is regressive.

00:00:54There are states like Tamil Nadu which were protesting

00:00:56because they were saying that it's like penalising the states

00:00:58for investing so much money into building factories

00:01:00when there are states that are just resuming things.

00:01:03The state is not building factories.

00:01:04What are you saying?

00:01:05The top 1% of India accounted for 45% of all flights

00:01:09and just 6.5% of the users were responsible for 44% of all UPI transactions.

00:01:16Why is the gap between the rich and the poor increasing so much?

00:01:19Now, the Skill India report says that more than 35% of our B.Tech students are unemployable,

00:01:2530% of our MBA students are unemployable,

00:01:2760% of our ITI students are unemployable

00:01:30and more than 75% of our Polytechnic students are unemployable.

00:01:34The Finance Minister of Kerala, Kian Balogopal argues,

00:01:38he says that Kerala gets only 21 rupees against every 100 rupees that Kerala collects

00:01:42but for UP, this number is 46 out of 100

00:01:44and for Bihar, it's drastically high.

00:01:46Bihar gets 70 rupees out of the 100 rupees that it collects

00:01:49and here's where the North-South divide narrative comes into play ma'am.

00:01:54So ma'am, what is the logic behind dividing this pool of money?

00:01:57I think this narrative is somewhat distorted.

00:02:12Hi everybody, this is a conversation that I had

00:02:16with one of the most powerful women in India

00:02:18who's none other than our Finance Minister Srimati Nirmala Sitaraman.

00:02:23In this episode, we spoke at length on what exactly are the obstacles

00:02:26that India faces while it is on its way to become a $7 trillion economy,

00:02:30why is there rampant unemployment in India,

00:02:33what is the vision that BJP has for India

00:02:35and most importantly, we spoke at length on why southern states

00:02:38like Tamil Nadu and Kerala get less money from the center

00:02:41as compared to northern states like UP and Bihar.

00:02:45So as usual, I tried my level best to ask her

00:02:47as many questions as possible in the limited time that we had.

00:02:51We did miss out on a lot of questions

00:02:53but for the questions that we could ask,

00:02:55Nirmala ma'am was kind enough to explain everything

00:02:57using examples and numbers.

00:02:59So now, it's up to you to decide

00:03:01whether our answers were satisfactory or not.

00:03:04And now, on with the episode.

00:03:06Hello ma'am.

00:03:07Welcome to the Indian Business Podcast

00:03:09and thank you so much for giving us

00:03:11such an important slot in your valuable schedule ma'am.

00:03:15Namthi Ajana for today's podcast is very simple.

00:03:17We want to understand the fundamental insights of great governance

00:03:20which usually gets missed out by mainstream media.

00:03:24And I have very specific questions

00:03:26coming straight from the people of India

00:03:28and what we seek to understand

00:03:30are the underlying insights

00:03:31behind the functioning of the government.

00:03:34So, all throughout this episode,

00:03:35if you can be extremely elaborative

00:03:38with your answers

00:03:39as simple as possible

00:03:41and with as many examples as possible,

00:03:43that would be fantastic ma'am.

00:03:44Shall we get started?

00:03:45Yes.

00:03:45And thank you for having me.

00:03:47Ganesh.

00:03:47Thank you so much ma'am.

00:03:49Now, the first question that I have

00:03:50comes from your India Today conclave answer.

00:03:54And you mentioned

00:03:54that a critical factor

00:03:56to help us become a 7 trillion dollar economy

00:03:58is the coordination between the state, center, and the panchayat.

00:04:03Ma'am, could you please elaborate on that

00:04:04and help me understand

00:04:05what is this coordination issue

00:04:07and how are we solving for it?

00:04:10See, as you know,

00:04:12the governance structure in India

00:04:15is divided by subjects

00:04:18as much as it is divided primarily

00:04:22between the central government,

00:04:26the state government,

00:04:28and of course the third layer.

00:04:31So, there are subjects as they refer to

00:04:34which are entirely the central government's domain

00:04:39and there are subjects

00:04:41which are entirely the state government's domains

00:04:45and there are those which have

00:04:48both of them,

00:04:51they call it as concurrent subjects,

00:04:53where both the center and the states

00:04:55have a role to play.

00:04:57So, even there you know

00:04:59some aspects of that subject

00:05:02will be dealt by the center

00:05:04and some other aspects

00:05:06will be done by the states

00:05:08and the overlaps

00:05:10are kept to the minimum.

00:05:13Overlaps even within concurrent.

00:05:16So, when we refer to the subjects,

00:05:20those can be fantastically done

00:05:22by any one center or the state

00:05:25but even in those,

00:05:27nowadays very clearly,

00:05:29the interests of the states

00:05:32need to be given a voice

00:05:35and in subjects

00:05:38which are states exclusively,

00:05:41even the local bodies

00:05:42because they are also elected,

00:05:44they also have aspirations,

00:05:45they have people's representatives

00:05:48sitting in them.

00:05:49So, they are answerable

00:05:50back to the voters.

00:05:52So, the local self-government

00:05:54or the third layer

00:05:55as we call urban local bodies

00:05:57will also have a very decisive role

00:06:00to play

00:06:01to the limited area

00:06:02in which they operate.

00:06:04But, of late,

00:06:06the one big glitch

00:06:09to this whole thing

00:06:10is being felt

00:06:11because local governments

00:06:13are not yet

00:06:14into that groove

00:06:16because eventually

00:06:18when you take

00:06:19investment to some area,

00:06:22it is in that pocket

00:06:23where they have to be located.

00:06:25Many of the clearances

00:06:26will have to emanate from

00:06:28and therefore

00:06:30there is a need

00:06:32for the local bodies

00:06:33to understand

00:06:34why they have to be

00:06:35easy with people

00:06:36who are coming.

00:06:37Easy meaning

00:06:37well within the rules.

00:06:40Make it facilitative

00:06:41rather than obstructive

00:06:44because

00:06:45when you think

00:06:46you want to regulate them,

00:06:48control them

00:06:48or bring more rules on them,

00:06:51you think you are having a hold

00:06:52but that can frighten people

00:06:54away from your place.

00:06:55So, it is that kind of

00:06:59understanding

00:07:02and participating

00:07:03with the same intent

00:07:05that you need to have

00:07:07all the layers

00:07:07working together.

00:07:08That is why

00:07:09I had said that.

00:07:10Could you help me

00:07:11understand this

00:07:12as an example ma'am?

00:07:13Any example

00:07:14will be,

00:07:14let us say,

00:07:16now you are having

00:07:18all these semiconductor

00:07:20chip manufacturing.

00:07:21earlier you had

00:07:24the Maruti,

00:07:26was it

00:07:27that the smallest car,

00:07:30Nano,

00:07:30which was going to be

00:07:32manufactured

00:07:32and where they went,

00:07:35the state government

00:07:36and the local body

00:07:37did not make it easy

00:07:38for them

00:07:39and at that point

00:07:40in time,

00:07:41before 2014 election,

00:07:43typical of Gujarat

00:07:44which was business friendly,

00:07:46they said,

00:07:47no, you come over,

00:07:48we will do it

00:07:48and therefore leaving

00:07:50the area

00:07:52where it was to be

00:07:53established in Bengal,

00:07:54Tata rushed to Sanand

00:07:57and the Gujarat government

00:07:59together with the local body

00:08:00there enabled

00:08:02within,

00:08:03I am told,

00:08:0410 days

00:08:06the permissions

00:08:07required clearances

00:08:08and everything

00:08:09so that they could invest.

00:08:10Now,

00:08:12without looking at

00:08:14any ill will

00:08:15or malified,

00:08:16why wouldn't that happen

00:08:17in Bengal?

00:08:19After all,

00:08:19the same investments

00:08:21by Tata

00:08:23was going to happen there.

00:08:24Correct.

00:08:25That insensitivity

00:08:26or call it indifference

00:08:28affected

00:08:29a big prospect

00:08:31of a business.

00:08:32Similar is the way

00:08:33in which

00:08:33you have

00:08:34private Indian investors

00:08:36going in

00:08:36for manufacturing

00:08:37semiconductors.

00:08:39it's no good

00:08:41repeating the example

00:08:42Gujarat offered

00:08:43them favourable.

00:08:45Anyone could have

00:08:46offered

00:08:47and that got

00:08:48proven

00:08:49by the fact

00:08:50that,

00:08:51would you imagine,

00:08:52Assam gave them

00:08:53the opportunity.

00:08:55You tend to think

00:08:56North East states

00:08:57need a lot more

00:08:58pushing up

00:08:58to even be

00:08:59at par with

00:09:00many of the states

00:09:01so that

00:09:02industry can go in there.

00:09:04But what did Assam do

00:09:05differently

00:09:06from many other states

00:09:07which in manufacturing

00:09:09except for core industries

00:09:11like cement

00:09:11or something,

00:09:12you don't have

00:09:13any of those

00:09:14new tech

00:09:15technology-driven areas

00:09:17or IT-driven

00:09:19industry being there.

00:09:20But they drew them

00:09:21and hard-nosed

00:09:24business house

00:09:25like Tata's

00:09:26found it

00:09:27possible to establish

00:09:29not a cement factory,

00:09:31not a, you know,

00:09:32integrated steel factory,

00:09:33but a very coveted

00:09:36semi-conductor

00:09:39manufacturing place.

00:09:41So, that is the point

00:09:42in which the state

00:09:43government working

00:09:44together with local

00:09:45authorities

00:09:46can do what you

00:09:47would otherwise

00:09:48in common sense

00:09:48think is impossible

00:09:49if they only move

00:09:51that fast

00:09:52and understanding

00:09:53the need.

00:09:54Solid two examples.

00:09:56Very interesting, ma'am.

00:09:57Ma'am, you mentioned

00:09:58about ease of doing

00:09:59business in Gujarat

00:10:00and I've read this

00:10:01countless times.

00:10:02In fact, we've made

00:10:02a case study on Gujarat

00:10:03and we often found out

00:10:05that a lot of

00:10:07entrepreneurs have

00:10:07given a statement

00:10:08publicly saying that

00:10:09it is very easy

00:10:10for us to set up

00:10:10our factories in Gujarat

00:10:12versus in any other state.

00:10:14In fact, Ratan Tata ji

00:10:14himself gave out

00:10:15a statement

00:10:16that while many

00:10:17other states

00:10:18were offering

00:10:19Tata lands,

00:10:22it was only Gujarat

00:10:23that was

00:10:24not just offering

00:10:25but also kept

00:10:26the land ready

00:10:27and that was because

00:10:28of the land banking

00:10:28system in Gujarat.

00:10:29I mean, why is it

00:10:31that we've not been

00:10:32able to scale

00:10:32the land banking

00:10:33system all across

00:10:33the country, ma'am?

00:10:34Why only Gujarat?

00:10:35I wouldn't think

00:10:36you're right in that.

00:10:38There are many states

00:10:39which went ahead

00:10:40with land banking

00:10:41system,

00:10:42keeping certain

00:10:43demarketed areas

00:10:44ready for industry

00:10:45who will come forward

00:10:46and so on.

00:10:48But what is

00:10:48the distinction

00:10:50between

00:10:51what Gujarat's

00:10:53approaches

00:10:53as regards

00:10:55the others

00:10:55compared to

00:10:56Gujarat

00:10:57is consistently

00:10:59they are doing

00:10:59it.

00:11:00Whereas in

00:11:01other states,

00:11:03take the example

00:11:04of Maharashtra.

00:11:05After all,

00:11:06the same bullet

00:11:07train

00:11:07was approved

00:11:09in Maharashtra

00:11:09as well

00:11:10to be one

00:11:11of the terminal

00:11:12points for it.

00:11:13The other terminal

00:11:14point in Gujarat

00:11:15and it runs

00:11:17partly through

00:11:19Gujarat

00:11:19and comes partly

00:11:20through parts

00:11:21of northern

00:11:22Maharashtra

00:11:23and reach Mumbai.

00:11:24It was approved.

00:11:26It was all

00:11:27cleared.

00:11:28Japanese came

00:11:29in a big way

00:11:30both for the

00:11:30technology

00:11:31and for building

00:11:32the quality

00:11:33that is required

00:11:34for the

00:11:34track laying

00:11:35for the

00:11:36bridges which

00:11:37are going to

00:11:38hold them

00:11:38and everything

00:11:38else.

00:11:40But what

00:11:40happened?

00:11:41With a change

00:11:42of government

00:11:43that particular

00:11:45agreement or

00:11:46understanding

00:11:47was put in

00:11:48the back burner.

00:11:49So from

00:11:50the terminal

00:11:52point in

00:11:52Gujarat

00:11:53till almost

00:11:54the border

00:11:55of Maharashtra

00:11:56the work

00:11:56was almost

00:11:57two-thirds

00:11:58complete.

00:11:59But they

00:12:00had to halt.

00:12:00They couldn't

00:12:01come further

00:12:02here because

00:12:03Maharashtra

00:12:03changed its

00:12:04approach to

00:12:05the project.

00:12:05Now a

00:12:06project like

00:12:07that which

00:12:08involves

00:12:09overseas

00:12:10investors,

00:12:11overseas

00:12:12technology

00:12:12having agreed

00:12:14and a central

00:12:15government which

00:12:15is working to

00:12:16get these

00:12:17overseas because

00:12:18most of the

00:12:18overseas loans

00:12:19when they come

00:12:20they come to

00:12:21the states for

00:12:22their projects

00:12:22but the

00:12:23guarantor is

00:12:24the central

00:12:24government.

00:12:26Now with all

00:12:27this done

00:12:27suddenly when a

00:12:29change of

00:12:29government happens

00:12:29and for you

00:12:30for political

00:12:31considerations you

00:12:32say it's not

00:12:33required for me

00:12:34the impact it

00:12:36has on the

00:12:38overall approach

00:12:40to making

00:12:41investment in

00:12:42India attractive

00:12:43just falls flat.

00:12:45Alright.

00:12:46Then again with a

00:12:47change of government

00:12:47that's getting

00:12:48restored.

00:12:49Now what

00:12:51happens to the

00:12:52overall completion

00:12:54of project?

00:12:55What happens to

00:12:56that portion of

00:12:57the project which

00:12:58got delayed and

00:12:59its cost

00:13:00escalations?

00:13:01What happens to

00:13:02the loans that

00:13:03you have to pay

00:13:04back?

00:13:05What happens to

00:13:06the timeline that

00:13:08this business is

00:13:09going to become

00:13:10revenue neutral or

00:13:12you're making

00:13:12your ends meet

00:13:14and there is no

00:13:15loss per se

00:13:17and you enter

00:13:18the stage where

00:13:19you can start

00:13:20making profit

00:13:20everything gets

00:13:22pushed.

00:13:24So when you

00:13:24say you took

00:13:26the example of

00:13:27land bank alone

00:13:28I take it as

00:13:30even the

00:13:31attitude towards

00:13:32development

00:13:34attitude towards

00:13:36economic benefits

00:13:38and the

00:13:39collaterals

00:13:40arising out of

00:13:41a positive

00:13:42approach towards

00:13:43economy as

00:13:44as opposed

00:13:45to disruptive

00:13:48for want of

00:13:49better word

00:13:49disruptive

00:13:50approach.

00:13:52Governments run

00:13:53in continuity.

00:13:54Economy has

00:13:55you know it's

00:13:56like building

00:13:57let us say a

00:13:59dam or a

00:14:00mansion or a

00:14:00house or a

00:14:01even a small

00:14:02cutter that you

00:14:03want to build.

00:14:04You lay the

00:14:05foundation and

00:14:06then start doing

00:14:07something even as

00:14:08you lay the

00:14:09foundation if you

00:14:09say no I'm not

00:14:10laying it for one

00:14:11floor above I just

00:14:12want the car

00:14:13ground although the

00:14:14whole understanding

00:14:15is you want the

00:14:16whole thing done

00:14:16completely.

00:14:18It affects

00:14:19everything that

00:14:19you think in

00:14:20terms of

00:14:21businesses.

00:14:22So states not

00:14:24just for land

00:14:24bank but

00:14:25understanding this

00:14:27principle that

00:14:29governments are

00:14:30in continuity and

00:14:32you cannot for

00:14:34such major

00:14:35things take a

00:14:36decision which is

00:14:37completely going

00:14:38to turn upside

00:14:41down decisions

00:14:42taken earlier.

00:14:45So if that is

00:14:46the example that

00:14:47I have taken to

00:14:47explain not just

00:14:49in land banks but

00:14:50in general

00:14:51governments being

00:14:52in continuity you

00:14:53have to go ahead

00:14:54with some of the

00:14:55decisions however

00:14:56much you may

00:14:57disapprove of it

00:14:57because they have

00:14:59been already taken.

00:15:00So if this is

00:15:01about decisions

00:15:02there is one other

00:15:02point which is

00:15:03necessary to add

00:15:04here.

00:15:05So not only the

00:15:06government in

00:15:08continuity.

00:15:09Economy also runs

00:15:11in continuity.

00:15:12Correct.

00:15:13Unless you give

00:15:14it enough

00:15:14leeway you

00:15:17cannot change

00:15:18your decision.

00:15:19You can always

00:15:20now pit a

00:15:21question against

00:15:22me or on me

00:15:23to answer saying

00:15:25after all India

00:15:26has been a

00:15:26socialist economy

00:15:27all these years.

00:15:28Yeah.

00:15:29We have had

00:15:30public sector

00:15:30undertakings.

00:15:32We have had a

00:15:33lot of investment

00:15:34in running big

00:15:35companies by

00:15:36government of

00:15:37India.

00:15:37Why would you

00:15:38therefore because

00:15:40going by that

00:15:41economy is a

00:15:42continuity government

00:15:42is a continuity

00:15:43argument.

00:15:45Why would you

00:15:46want to go ahead

00:15:47with privatization?

00:15:49In 2021 I am

00:15:51glad to say I was

00:15:52part of this

00:15:53government when

00:15:54we took a call

00:15:55on public

00:15:57sector enterprises

00:15:58policy.

00:15:59Whereby we said

00:16:00it cannot any

00:16:01longer be the

00:16:03prerogative of

00:16:04government alone

00:16:05to be in one

00:16:06area of business.

00:16:08Every area of

00:16:09business should be

00:16:11available for

00:16:11private sector also

00:16:12to be in.

00:16:14Alright.

00:16:15Government will

00:16:16have to be in

00:16:17some sectors which

00:16:18are strategically

00:16:20important for us.

00:16:22One example of

00:16:23that is

00:16:23communication.

00:16:25And unless you

00:16:26have government

00:16:28services in

00:16:29these sectors,

00:16:31communication is

00:16:32one example,

00:16:33you will not be

00:16:34able to reach

00:16:34the border areas,

00:16:36provide telecom

00:16:36facilities there

00:16:37because the

00:16:38private sector

00:16:39would say that

00:16:39area doesn't give

00:16:40me enough profit

00:16:41so I won't go

00:16:42there.

00:16:42You need.

00:16:43Therefore

00:16:43strategically there

00:16:45can be three or

00:16:46four areas and

00:16:49we said that

00:16:50will be about

00:16:52only that much

00:16:54where the

00:16:54government will

00:16:55also have to

00:16:56be present.

00:16:58It cannot be

00:16:59only government

00:17:00will be present.

00:17:01we want the

00:17:02efficiency of the

00:17:03private sector

00:17:03so we opened

00:17:04it up.

00:17:05Now therefore

00:17:06even for that

00:17:071991 is claimed

00:17:10to be the time

00:17:11when we had

00:17:11opening up of

00:17:13the Indian

00:17:13economy.

00:17:14But even then

00:17:15this privatization

00:17:17point was not

00:17:18really worked

00:17:19upon.

00:17:20It had to take

00:17:21its own time.

00:17:23But government

00:17:24here now under

00:17:25Prime Minister Modi

00:17:25said it's high

00:17:27time we have to

00:17:28open this up.

00:17:28and look at

00:17:30the result it

00:17:31has borne.

00:17:32Space sector

00:17:33a bus with

00:17:36private interests

00:17:37investment,

00:17:39private talent,

00:17:41young people

00:17:42wanting to do

00:17:43a lot of work

00:17:44in launching

00:17:44satellites either

00:17:46in the lower

00:17:47orbit or even

00:17:48the higher.

00:17:49It has brought

00:17:50in such a lot

00:17:51of synergy that

00:17:53India even as

00:17:54it was standing

00:17:55as a leader

00:17:58in economy

00:18:00driven space

00:18:01launches.

00:18:02Now it's

00:18:04even more

00:18:04efficient.

00:18:05You're able to

00:18:06send the

00:18:07smallest satellite

00:18:07to the lowest

00:18:09orbit and

00:18:10send a satellite

00:18:11which is just

00:18:12going to monitor

00:18:12your land

00:18:14resources,

00:18:14your water,

00:18:15the groundwater

00:18:15table and so on.

00:18:17So you really

00:18:18made that sector

00:18:19vibrant.

00:18:20So that is the

00:18:21kind of change

00:18:22even as you

00:18:23emphasize on

00:18:24continuity.

00:18:25Very interesting

00:18:26ma'am.

00:18:26So you're

00:18:26saying that

00:18:27governance should

00:18:27always take the

00:18:28front seat and

00:18:29politics should

00:18:29be at the

00:18:30back seat.

00:18:31I would say

00:18:32governance,

00:18:33when it comes to

00:18:34questions of

00:18:35governance,

00:18:36when it comes to

00:18:37the question of

00:18:38economy which is

00:18:39going to benefit

00:18:40everybody,

00:18:41the politics

00:18:42cannot be so

00:18:44disruptive.

00:18:45For instance,

00:18:46the UPA

00:18:50government

00:18:50brought in

00:18:53what was

00:18:53notoriously

00:18:55called

00:18:56retrospective

00:18:57taxation.

00:18:59It started

00:19:00to tax

00:19:01for years

00:19:03long before

00:19:03and called

00:19:06it a

00:19:07correction

00:19:07related

00:19:08measure.

00:19:09They had

00:19:10to take it

00:19:11back and

00:19:12ask people to

00:19:13pay up tax

00:19:13for periods

00:19:15which were

00:19:15long gone

00:19:16although at

00:19:17that time

00:19:18in their

00:19:18business model

00:19:19they would

00:19:19have calculated

00:19:20the tax

00:19:22that they

00:19:22have to

00:19:23pay to

00:19:23the government

00:19:23per that

00:19:24prevailing

00:19:25rate at

00:19:26that time.

00:19:27But 10

00:19:28years forward

00:19:29you bring

00:19:31in a law

00:19:32which says

00:19:33a certain

00:19:34tax will

00:19:35have to be

00:19:35paid going

00:19:36backward in

00:19:37time.

00:19:38Businesses

00:19:39and their

00:19:39business model

00:19:40can no longer

00:19:42take that on

00:19:43because they

00:19:43have costed

00:19:44themselves in

00:19:45such a way

00:19:45that for tax

00:19:46this much is

00:19:47given, for

00:19:48dividend this

00:19:49much is given

00:19:49if profit is

00:19:50earned or

00:19:51else the

00:19:52cost of a

00:19:52product that

00:19:53they produce

00:19:54would be this

00:19:54much is all

00:19:56predetermined and

00:19:57based on that the

00:19:58business has

00:19:58happened, goods

00:19:59have bought and

00:20:00sold and

00:20:01everything.

00:20:02Now when you're

00:20:02bringing in a

00:20:03retrospective tax

00:20:04who collects it

00:20:05from whom?

00:20:07Can they go back

00:20:08to searching each

00:20:09of the product

00:20:10consumer?

00:20:12Correct.

00:20:12So when I

00:20:14tell you this

00:20:15example of

00:20:17going backwards

00:20:18governance is

00:20:20always disruptive

00:20:21so you're

00:20:22talking about

00:20:22governance?

00:20:23Which is going

00:20:24to take the

00:20:25back seat and

00:20:25which is going

00:20:26to take the

00:20:26front seat?

00:20:27Is governance

00:20:27going to take

00:20:28the front seat

00:20:29and politics

00:20:29the one

00:20:31behind?

00:20:32I wouldn't

00:20:33look at it

00:20:33like that.

00:20:33I look at it

00:20:34as so long

00:20:36as you're not

00:20:36disruptive and

00:20:38you're taking

00:20:39it forward

00:20:39governance and

00:20:41politics go

00:20:42hand in

00:20:43hand.

00:20:43but the

00:20:44moment you

00:20:45decide that

00:20:46you have a

00:20:46different agenda

00:20:47then not just

00:20:48going forward

00:20:49and giving the

00:20:50benefit to the

00:20:50people who are

00:20:51doing business

00:20:52and the citizens

00:20:53who are benefiting

00:20:54from business

00:20:54you're bound to

00:20:56disrupt it

00:20:56negatively.

00:20:58Very interesting

00:20:59ma'am.

00:21:00Ma'am the next

00:21:00question that I

00:21:01have actually comes

00:21:02from a very

00:21:02interesting chart

00:21:03which was put

00:21:04forth by a VC

00:21:04firm called

00:21:05Blue Ventures

00:21:05and they bifurcated

00:21:07the income tax

00:21:08peers in India

00:21:08and this chart

00:21:09says that

00:21:10out of the

00:21:111.4 billion

00:21:12people 74

00:21:13million people

00:21:14filed for taxes

00:21:15and only 22

00:21:16million people

00:21:16were actual

00:21:17tax peers.

00:21:18So only 1.5

00:21:19percent of

00:21:20India's population

00:21:20is the tax

00:21:21paying population

00:21:22whereas for

00:21:23China this is

00:21:2410 percent

00:21:25and in the

00:21:25US it is

00:21:2643 percent.

00:21:27Ma'am why is

00:21:27our tax base

00:21:28so small?

00:21:30Yes it is

00:21:31small and the

00:21:33attempt is to

00:21:34make it wider

00:21:35but taxation

00:21:37is such a

00:21:38matter that

00:21:39you really

00:21:40can't impose

00:21:41you will have

00:21:41to find out

00:21:42where that

00:21:43revenue lies

00:21:44so that you

00:21:46gradually bring

00:21:47them on board

00:21:48to say you

00:21:49should also be

00:21:49paying the tax

00:21:50and therefore

00:21:53in India

00:21:54particularly it

00:21:55takes a very

00:21:57interesting

00:21:58dimension in

00:22:00that as long

00:22:01as you are

00:22:02earning more

00:22:03you and your

00:22:03family are happy

00:22:04but the moment

00:22:06you are under

00:22:06the tax net

00:22:07you think the

00:22:09government is

00:22:09regressive

00:22:10there is a

00:22:11moral issue

00:22:12here and

00:22:14therefore it

00:22:14will have to

00:22:15take its

00:22:15time.

00:22:16How do we

00:22:16solve this

00:22:16problem ma'am?

00:22:18Nudge the

00:22:19people is the

00:22:19only solution

00:22:20you have to

00:22:21bring in civic

00:22:21consciousness

00:22:22but above all

00:22:24I think there is

00:22:24also an

00:22:26argument which

00:22:26the taxpayer

00:22:27has in his

00:22:28mind and I

00:22:30think I would

00:22:31respect that

00:22:33and that

00:22:34thought is

00:22:35look what

00:22:36do we get

00:22:36for the tax

00:22:37that we pay

00:22:38exactly.

00:22:39This has been

00:22:40a question I

00:22:41think now for

00:22:4150 years

00:22:42correct.

00:22:43Because the

00:22:43taxpayer thinks

00:22:45my road doesn't

00:22:47improve I don't

00:22:49get proper

00:22:50drinking water in

00:22:50my house

00:22:51three-phase

00:22:52electricity also

00:22:53was something

00:22:54very aspirational

00:22:56and then going

00:22:58to a proper

00:22:58hospital was a

00:22:59big thing.

00:23:01Private sector

00:23:01probably showed

00:23:02the way saying

00:23:03better quality

00:23:03medical attention

00:23:05is available but

00:23:06government hospitals

00:23:07were not really

00:23:07up to it.

00:23:09So you thought

00:23:09even if you are

00:23:10paying only a

00:23:11hundred rupees

00:23:12towards tax you

00:23:13thought my

00:23:13hundred rupees

00:23:14is important for

00:23:15me and truly

00:23:15it is important

00:23:17for everybody.

00:23:18But in that

00:23:18hundred rupees I

00:23:19don't seem to get

00:23:20anything better.

00:23:21No value for

00:23:21money.

00:23:22So that anxiety

00:23:24still holds.

00:23:25Although Prime

00:23:26Minister Modi I

00:23:27would generously

00:23:28credit him for

00:23:29one thing.

00:23:31Every rupee of

00:23:32the taxpayer's

00:23:33money he is

00:23:36clear that he

00:23:37has to safeguard.

00:23:38He is clear that

00:23:39that cannot be

00:23:40frittered away.

00:23:42He is also

00:23:43clear that like

00:23:44the way you know

00:23:45once upon a time

00:23:46Prime Minister

00:23:47Rajiv Gandhi said

00:23:48if I send

00:23:50one rupee to

00:23:51the beneficiary

00:23:52he ends up

00:23:53getting only 15

00:23:54paisa.

00:23:55The rest are

00:23:56all gone away.

00:23:58So by adopting

00:23:59technology Prime

00:24:00Minister has

00:24:01ensured that

00:24:02that kind of

00:24:02leakage doesn't

00:24:03happen.

00:24:04One rupee sent

00:24:05is one rupee

00:24:06received.

00:24:07So you are

00:24:07saying that once

00:24:08you start providing

00:24:09value for money

00:24:09to the people of

00:24:10India they will

00:24:11understand the

00:24:12importance of

00:24:13paying taxes or

00:24:14they will at

00:24:14least value the

00:24:15fact that the

00:24:16government is giving

00:24:16them something in

00:24:17return for the tax

00:24:18that they are

00:24:18paying.

00:24:19This stat itself

00:24:20has another

00:24:20underlying insight.

00:24:21It says that out

00:24:22of the 22 million

00:24:23people who pay

00:24:23taxes also only

00:24:244.5 million as

00:24:26in just 0.3% of

00:24:28our population

00:24:29pays 80% of

00:24:30our taxes.

00:24:31This indicates a

00:24:32very big gap

00:24:33between the rich

00:24:34and the poor.

00:24:34And I looked at

00:24:35the consumption

00:24:35levels and even

00:24:36there I found

00:24:37some stats which

00:24:38were quite

00:24:38surprising.

00:24:39It says that the

00:24:40top 1% of India

00:24:41accounted for 45%

00:24:43of all flights.

00:24:451% of Indians

00:24:46took home 22%

00:24:48of India's

00:24:48income and

00:24:49just 6.5%

00:24:51of the users

00:24:51were responsible

00:24:52for 44%

00:24:54of all UPI

00:24:55transactions.

00:24:56Ma'am why is

00:24:56the gap between

00:24:57the rich and the

00:24:57poor increasing

00:24:58so much?

00:24:59See I wouldn't

00:25:01want to play it

00:25:02up as the gap

00:25:04increasing so

00:25:06much or whatever.

00:25:08I think there

00:25:09is a clear

00:25:12disconnect between

00:25:13the qualifications

00:25:17that you

00:25:18acquire, the

00:25:20education levels

00:25:21that we reach

00:25:22and the kind

00:25:24of jobs that

00:25:26are available.

00:25:28And also

00:25:28equally jobs

00:25:30and the skill

00:25:31sets that they

00:25:32require don't

00:25:33seem to matter

00:25:34in the higher

00:25:35education centers.

00:25:37Correct.

00:25:38So I've

00:25:39heard big

00:25:41companies tell

00:25:41me that a

00:25:47properly qualified

00:25:48engineer is

00:25:50recruited but

00:25:52almost 6 months

00:25:53goes away in

00:25:56making him job

00:25:57fit.

00:25:58Correct.

00:25:58It's an

00:26:00investment for

00:26:00the company

00:26:01and why should

00:26:03they have to

00:26:03do it?

00:26:05So the

00:26:05qualifications

00:26:06with which

00:26:07people ready

00:26:07themselves to

00:26:08face a job

00:26:10are still not

00:26:13really up to

00:26:14the industry's

00:26:15requirement.

00:26:17And many

00:26:17companies,

00:26:19particularly the

00:26:19medium and

00:26:20small ones,

00:26:21can't even

00:26:21afford to

00:26:22invest in

00:26:24training them

00:26:25because after

00:26:256 months of

00:26:26training, God

00:26:27knows where

00:26:27he'll go.

00:26:28Correct.

00:26:28So the

00:26:29considerations

00:26:30for industry

00:26:31are all now

00:26:32becoming so

00:26:33difficult that

00:26:35youth who

00:26:36think that they

00:26:37come out of

00:26:37universities,

00:26:38are ready for

00:26:39jobs, are

00:26:41unable to

00:26:41digest the

00:26:42fact that

00:26:42probably they

00:26:43are just not

00:26:44ready for jobs

00:26:44yet.

00:26:46But so, is

00:26:47this a

00:26:47government

00:26:47observation?

00:26:48Is this

00:26:48something which

00:26:49I'm going to

00:26:49leave it as

00:26:50it is for

00:26:51them to face?

00:26:51No.

00:26:52We are trying

00:26:53to bridge this

00:26:53gap.

00:26:54We are trying

00:26:54to work with

00:26:55industry groups

00:26:56to say why

00:26:57don't you

00:26:58tell us

00:26:59what is the

00:27:00kind of

00:27:00requirement you

00:27:01have?

00:27:02And in the

00:27:03curriculum that

00:27:04is being

00:27:04imparted, would

00:27:05you want to

00:27:06join hands at

00:27:07least in the

00:27:07last one year,

00:27:09at least in the

00:27:09last two years of

00:27:10an engineering

00:27:11course and say

00:27:13look, give him

00:27:13such skills which

00:27:14are required for

00:27:16a forging

00:27:17company, metal

00:27:19forging company

00:27:20or if it's an

00:27:21automobile shop

00:27:21flow, what

00:27:22would you want

00:27:23him to do?

00:27:24I know there

00:27:24are institutions

00:27:25like the

00:27:26Power Tools

00:27:27Corporation or

00:27:29Power Tools

00:27:30Institute or

00:27:31something, Government

00:27:32of India run,

00:27:33which trains

00:27:34mechanical engineers,

00:27:35which trains

00:27:36people how to

00:27:36go about using

00:27:37instruments and

00:27:39be of relevance

00:27:40in the shop

00:27:42flow, but many

00:27:43more such are

00:27:44required, not

00:27:45for just the

00:27:46engineering.

00:27:47Now the

00:27:48PM Vishwakarma

00:27:49Yojana that

00:27:50we've come up

00:27:50with is the

00:27:52one which says

00:27:53for people who

00:27:55are working with

00:27:55some bare minimum

00:27:57tools, in other

00:27:59words, working

00:28:00essentially with

00:28:01their hands but

00:28:01probably using a

00:28:02minimum set of

00:28:03tools, they shall

00:28:05be proper training

00:28:06given, they will

00:28:07be given a kind

00:28:09of a stipend

00:28:10during the course

00:28:12post which a

00:28:1315,000 rupees

00:28:15worth of kit will

00:28:16be provided to

00:28:17them and with

00:28:18that certification

00:28:19today they can

00:28:21qualify for many

00:28:22of these big

00:28:23ticket jobs or

00:28:25assignments or

00:28:26contracts or

00:28:26subcontracts and

00:28:28so on.

00:28:29So yeah, these

00:28:30are serious

00:28:31problems of

00:28:32people with

00:28:34inadequate skill

00:28:35sets aspiring

00:28:37for jobs.

00:28:39I was reading

00:28:40something called

00:28:40the Skill India

00:28:41report and what

00:28:42you mentioned is

00:28:43great for the

00:28:43bottom of the

00:28:44pyramid but what

00:28:45I am deeply

00:28:45concerned about is

00:28:46the middle of the

00:28:46pyramid ma'am

00:28:47because this Skill India

00:28:48report says that

00:28:49just give me a

00:28:51second.

00:28:55Ma'am, the Skill India

00:28:55report says that

00:28:57more than 35% of

00:28:58our B.Tech students

00:28:58are unemployable,

00:29:0030% of our MBA

00:29:01students are

00:29:02unemployable, 60%

00:29:03of our I.T.I.

00:29:04students are

00:29:05unemployable and

00:29:06more than 75% of

00:29:07our Polytechnic

00:29:08students are

00:29:08unemployable.

00:29:09So, and you know

00:29:10ma'am, I have been

00:29:11the perfect witness to

00:29:11this entire transition

00:29:12because 10 years back

00:29:13I was in college

00:29:14and I am that

00:29:15student that you

00:29:15are talking about

00:29:16who thought after

00:29:17college I will

00:29:18find a great job

00:29:18but by the end

00:29:19of college I

00:29:20realized that I

00:29:20do not know

00:29:21anything that is

00:29:21relevant to the

00:29:23industry today.

00:29:24And 10 years

00:29:25later now I am

00:29:26recruiting engineers

00:29:27and I am seeing

00:29:28the same problem

00:29:29ma'am.

00:29:29They are reading

00:29:29out of outdated

00:29:30textbooks, they are

00:29:31reading outdated

00:29:32concepts and they

00:29:33do not know

00:29:33anything that is

00:29:34relevant for

00:29:36today's industry.

00:29:37So ma'am, how

00:29:38are we solving

00:29:38this problem for

00:29:39the middle of the

00:29:40pyramid which is

00:29:41our engineers and

00:29:42management students

00:29:42at least?

00:29:45You've put your

00:29:47example forward.

00:29:48First thing I think

00:29:50and this is not to

00:29:51say it's not part of

00:29:52government's own

00:29:53responsibility.

00:29:55The drive that an

00:29:56individual has to

00:29:57recognize that this

00:30:00is not going to work

00:30:01out for him and he

00:30:02has to find a

00:30:03different thing.

00:30:04As I say, get your

00:30:06mojo back.

00:30:07How do you get your

00:30:07mojo back?

00:30:09Once you identify

00:30:10that you don't seem

00:30:11to have your mojo

00:30:12in a particular

00:30:13area and if you

00:30:15have to acquire

00:30:16it, what is it

00:30:17that you have to

00:30:17do?

00:30:18And once you

00:30:19identify, there

00:30:20are now online

00:30:22or offline

00:30:23courses available

00:30:25for you to be

00:30:26able to

00:30:26equip yourself

00:30:28better.

00:30:29That is one.

00:30:30And second,

00:30:32peer group

00:30:33learning is

00:30:34something which

00:30:35I think till

00:30:36my college days

00:30:37we've all

00:30:38benefited from.

00:30:40Today the world

00:30:40is so fast.

00:30:41we think each

00:30:43of our mobiles

00:30:43will be our

00:30:44peers.

00:30:45No way.

00:30:46Peers are those

00:30:47who will be able

00:30:48to sit with you

00:30:49and put you

00:30:50the context in

00:30:51which you will

00:30:52have to search

00:30:52for what is

00:30:53missing in you.

00:30:54Those kind of

00:30:55interactions are

00:30:56now becoming

00:30:57very few and

00:30:58far between.

00:31:00That's a second.

00:31:00And the third,

00:31:01it is true you

00:31:02quoted the

00:31:03ITIs.

00:31:04ITIs unfortunately

00:31:06are with the

00:31:06state governments.

00:31:08Many state

00:31:08governments in

00:31:10the last 30-40

00:31:12years have

00:31:13stopped investing

00:31:14in them.

00:31:15Why do you

00:31:15need to invest

00:31:16in them?

00:31:17Upgrade the

00:31:18tools.

00:31:18Bring in

00:31:19newer tools

00:31:20with which you

00:31:21will train the

00:31:22young person.

00:31:23And not just

00:31:25in the same

00:31:25repeated skills,

00:31:28there are newer

00:31:29areas in which

00:31:30we want people

00:31:31to come.

00:31:31Take the

00:31:32example of

00:31:32today, the

00:31:34expansion in

00:31:35renewable energy,

00:31:37particularly solar.

00:31:39Who are the

00:31:40young people who

00:31:41are laying the

00:31:42panels, who are

00:31:44setting the

00:31:44panels to a

00:31:45certain angle

00:31:46facing the sun?

00:31:47Who are those

00:31:48people?

00:31:49They are not

00:31:49high-end skilled

00:31:50workers.

00:31:51Where did they

00:31:52acquire?

00:31:53And today, to

00:31:54meet the ever

00:31:55growing demand

00:31:57of solar energy,

00:31:59you have people

00:31:59who are servicing

00:32:00it, who you

00:32:01have people

00:32:01who understand

00:32:02how the film

00:32:03has to be

00:32:03maintained,

00:32:05cleaned, and

00:32:06how it has got

00:32:07to be placed,

00:32:08and so on.

00:32:09So, that

00:32:10sector has

00:32:12found itself

00:32:13having to

00:32:14adjust very

00:32:15quickly to

00:32:16changing

00:32:16requirements.

00:32:18Similarly, for

00:32:19other sectors

00:32:19too, we need

00:32:21both the

00:32:22state and the

00:32:23central government

00:32:24together with

00:32:25private sector

00:32:26joining hands

00:32:28to say, I need

00:32:29good trained

00:32:29workforce, or

00:32:30else I am not

00:32:30going to be

00:32:31able to fill

00:32:32the gap.

00:32:33That's what

00:32:33happened during

00:32:34the COVID.

00:32:36I've been in

00:32:37touch with most

00:32:38of the industry

00:32:39during COVID

00:32:40when it was all

00:32:40shut up, to

00:32:42make sure that

00:32:43the workers go

00:32:43back to where

00:32:44they want to

00:32:45go back, that

00:32:46they are not

00:32:46facing any

00:32:47hardship, and

00:32:47so on.

00:32:49Similarly, after

00:32:49the lockdown

00:32:50was lifted, I

00:32:52was in touch

00:32:53with them again

00:32:53to say, are

00:32:54they coming

00:32:54going back, you

00:32:56would be

00:32:56surprised to

00:32:57hear that

00:32:58many of

00:32:59them who

00:33:00booked the

00:33:01air tickets and

00:33:02got these

00:33:02workers earlier

00:33:03through some

00:33:04middle person

00:33:05were told, no

00:33:07sorry, we are

00:33:08not coming

00:33:08back.

00:33:09Why?

00:33:09Because these

00:33:10workers found

00:33:11better bargaining

00:33:12with other

00:33:14areas, so they

00:33:15were able to

00:33:16choose to go to

00:33:17a different

00:33:17company, or

00:33:18with the skills

00:33:19that they

00:33:19acquired, they

00:33:20thought they

00:33:20will be able to

00:33:21do something

00:33:21of their own

00:33:22in their own

00:33:23neighbourhoods, in

00:33:24the villages.

00:33:25I heard at

00:33:26least two large

00:33:27industrialists tell

00:33:28me, and they

00:33:30belong to the

00:33:31south, they

00:33:32said, well, I am

00:33:33not getting the

00:33:34same people who

00:33:35I had trained

00:33:35over the last

00:33:36several years.

00:33:37I am going to

00:33:38have to invest

00:33:39to get newer

00:33:40fellows and

00:33:41train them, but

00:33:42well, now I

00:33:44have realised

00:33:44that how much

00:33:45ever you do, it

00:33:46might be better

00:33:47off for you to

00:33:48get local

00:33:48fellows and

00:33:49train them.

00:33:50So, many of

00:33:51the southern

00:33:52districts of

00:33:53Tamil Nadu

00:33:53also which

00:33:54face labour

00:33:56related problems

00:33:57because they

00:33:59don't have

00:33:59enough opportunities,

00:34:01were picked up

00:34:01and they were

00:34:02trained, and

00:34:03even they had

00:34:04a different

00:34:05level of

00:34:05satisfaction because

00:34:06now they are

00:34:07very closer to

00:34:07home, they are

00:34:08willing to

00:34:08work.

00:34:09So, such

00:34:09reset in the

00:34:11labour market

00:34:12is happening

00:34:13post-Covid.

00:34:14So, ma'am, you

00:34:15are saying that

00:34:15the centre and

00:34:16the state need

00:34:16to again coordinate

00:34:17on this and

00:34:17make sure that

00:34:18there is an

00:34:18industry-academic

00:34:19connect.

00:34:20Such that the

00:34:21demand and

00:34:21supply both

00:34:21are matched,

00:34:22right?

00:34:22And the one

00:34:23question that I

00:34:23had...

00:34:24Which had

00:34:25worked initially

00:34:26very well,

00:34:27and probably

00:34:27continues to

00:34:28work in the

00:34:29domain of

00:34:30start-ups,

00:34:32where we

00:34:32brought in

00:34:33these start-ups

00:34:34to join hands

00:34:35with the

00:34:36hubs which

00:34:38were set up

00:34:39in IIT-like

00:34:40places, Indian

00:34:41Institute of

00:34:41Sciences-like

00:34:42places.

00:34:43People came

00:34:43there, sat

00:34:45with them,

00:34:46and they helped

00:34:47them to understand

00:34:48where the

00:34:48problem is,

00:34:49and where

00:34:49the solutions

00:34:50have got to

00:34:51come.

00:34:52And it has

00:34:52become a big

00:34:53catalytic centre,

00:34:54these hubs.

00:34:56Ma'am, the one

00:34:57question that I

00:34:57had, and this

00:34:58is purely out of

00:34:59curiosity, is that

00:35:00why don't we just

00:35:00put a restriction on

00:35:01the number of

00:35:02engineering colleges

00:35:02that are opening

00:35:03up?

00:35:03Because, ma'am,

00:35:05to be honest,

00:35:05in Pune, there

00:35:07are colleges that

00:35:07are being set up

00:35:08merely for the sake

00:35:09of making money,

00:35:10and the professors

00:35:11are incompetent.

00:35:12They are just

00:35:13great with

00:35:13marketing, and

00:35:14these students

00:35:15and parents who

00:35:16come from far

00:35:17away villages,

00:35:19they come to

00:35:19these colleges,

00:35:20and then there

00:35:20is a sales team

00:35:22which convinces

00:35:22them and sells

00:35:23them dreams that

00:35:24we'll be able to

00:35:24get you a 4.5

00:35:25lakh package,

00:35:26we'll be able to

00:35:27get you a 6.5

00:35:28lakh package, and

00:35:28eventually after

00:35:29four years, after

00:35:30taking education

00:35:31loan also, these

00:35:32people are not

00:35:33able to find jobs.

00:35:34And this points

00:35:35towards a larger

00:35:35problem also, because

00:35:36today if we say

00:35:38that we have 1.3

00:35:39million engineers

00:35:40coming out, to a

00:35:41foreign investor,

00:35:42this seems like a

00:35:42goldmine, because

00:35:43if 1.3 million

00:35:45engineers are coming

00:35:46out every year, that

00:35:47is great, plus our

00:35:48labor costs are low.

00:35:49But when that

00:35:50person comes over

00:35:51here and actually

00:35:51sees the quality of

00:35:52our engineers, and

00:35:54he sees that most

00:35:55of our engineers are

00:35:56not engineers at

00:35:56all, that number

00:35:58one, dents the

00:35:59reputation of the

00:35:59country, and

00:36:01number two, all of

00:36:02these engineering

00:36:02colleges are not

00:36:03engineering colleges

00:36:04at all, they're

00:36:05just engineering

00:36:05colleges for the

00:36:06namesake.

00:36:07So again, with

00:36:07this center state

00:36:08coordination, do we

00:36:10have something by

00:36:10which we can curb

00:36:11the expansion of

00:36:12these engineering

00:36:13institutes in such

00:36:14a way, that

00:36:15whatever supply we

00:36:16have, we have

00:36:17concrete supply, and

00:36:18the rest of the

00:36:19people can just find

00:36:20something else to do,

00:36:21rather than being

00:36:21deceived by these

00:36:23engineering colleges

00:36:24in the name of great

00:36:25packages.

00:36:26Absolutely, a very, very

00:36:27critical question, and

00:36:30an issue, which is

00:36:31definitely a festering

00:36:33issue.

00:36:34Many of them who

00:36:35borrow money and aim

00:36:37to have their children

00:36:38go high in their

00:36:40lives, have been

00:36:41shattered.

00:36:43And quality-less

00:36:45infrastructure, faculty-less

00:36:49programs, have

00:36:51actually hurt the

00:36:53sector.

00:36:54I know the

00:36:55example that you've

00:36:57cited of Pune is

00:36:58also applicable in

00:36:59many parts of

00:37:00southern states.

00:37:01Many engineering

00:37:02colleges are just

00:37:03lying there.

00:37:04Correct.

00:37:05Like huge concrete

00:37:06monsters with nothing

00:37:08in it.

00:37:08True.

00:37:09There has to

00:37:10certainly be a lot

00:37:11more vigilance in

00:37:13this matter and a lot

00:37:14more compliance of

00:37:15standards.

00:37:16Okay, ma'am.

00:37:17Ma'am, the next

00:37:17question that I have

00:37:18is about GST.

00:37:19And ma'am, GST

00:37:20without a doubt has

00:37:20been a phenomenal

00:37:21success because my

00:37:22chacha ji is extremely

00:37:23envious of us because

00:37:24we don't have to face

00:37:25the same problems that

00:37:26he did during that

00:37:27time.

00:37:28And all the

00:37:28stakeholders that I

00:37:29spoke to, in fact,

00:37:30we made a video on

00:37:30GST and we asked

00:37:31people to comment as

00:37:33a business owner

00:37:33whether they were

00:37:34happy with GST or

00:37:35not and most of the

00:37:36people said yes.

00:37:37But there's one

00:37:38category of stakeholder

00:37:39who's particularly not

00:37:40happy about GST and

00:37:41those are the state

00:37:42governments like

00:37:42Tamil Nadu and

00:37:43Kerala.

00:37:44Ma'am, before that, I

00:37:45just want to set the

00:37:46premise for this just

00:37:47so that I have the

00:37:47understanding of how

00:37:48GST operates properly.

00:37:50If a t-shirt worth

00:37:51100 rupees is produced

00:37:52in Tamil Nadu and it

00:37:53is sold in a state

00:37:53like UP and if 20

00:37:55rupees GST is collected

00:37:56on this t-shirt, 10

00:37:57rupees goes to the

00:37:58center and 10

00:37:59rupees goes to the

00:37:59state, right?

00:38:01And out of this 10

00:38:02rupee that goes to

00:38:02the state, it goes to

00:38:04the consumer state which

00:38:05is UP and not

00:38:06producer state which

00:38:07is Tamil Nadu,

00:38:07right?

00:38:08Governments like

00:38:08Tamil Nadu often argue

00:38:09that we've invested

00:38:10thousands of crores

00:38:11into setting up

00:38:11factories, building

00:38:12highways.

00:38:13Then why is it that

00:38:14our benefit of

00:38:16producing the goods

00:38:16are being passed on

00:38:18to other states

00:38:19where there are just

00:38:20more number of

00:38:21people out there

00:38:22to just consume

00:38:23the goods?

00:38:25So ma'am, how do

00:38:25you, ma'am, why

00:38:26don't we just split?

00:38:27I know this is a

00:38:28very amateur question

00:38:29ma'am and I know

00:38:29that there are complex

00:38:30calculations in place

00:38:31but why don't we just

00:38:32split the GST between

00:38:33the producer state and

00:38:33the consumer state

00:38:34equally?

00:38:36How would that work

00:38:37out?

00:38:37Out of the 20

00:38:38rupees that is

00:38:38collected, 10

00:38:39rupees goes to the

00:38:40center, 5 rupees goes

00:38:41to the producer state

00:38:42and 5 rupees goes

00:38:42to the consumer

00:38:43state.

00:38:44Wouldn't that be

00:38:44enough to...

00:38:45In a way, isn't that

00:38:47what is working?

00:38:48Because how do you

00:38:49know which product

00:38:50will be consumed?

00:38:51To what extent in a

00:38:53particular state?

00:38:54Maybe some states

00:38:55consume more of,

00:38:57let's say,

00:38:58hosiery products.

00:39:00Some other states

00:39:01may consume a lot

00:39:03more of metal goods.

00:39:07So for item wise,

00:39:09I'll have to, and some

00:39:10other states may consume

00:39:11one item this month

00:39:13and maybe not the

00:39:14next month.

00:39:15So you can't have a

00:39:17thumb rule and do it.

00:39:18It has to be on actual

00:39:20buying and selling.

00:39:21That is why this complex

00:39:23system was what simply

00:39:25saying how much gets

00:39:27sold in a particular

00:39:28state.

00:39:28And that is why when

00:39:30GST was launched in

00:39:312017, manufacturing

00:39:34states were all unhappy

00:39:35saying, I lose my

00:39:37advantage.

00:39:38I got so many

00:39:39industries to come to

00:39:40my place, set up the

00:39:41business.

00:39:41Now are you saying, I

00:39:42won't get my share?

00:39:44No.

00:39:44They were compensated

00:39:45for it.

00:39:46So that they come on

00:39:49board.

00:39:50Saying, okay,

00:39:50manufacturing states

00:39:51will be given

00:39:52something, you know,

00:39:53and they agreed to

00:39:54some kind of a

00:39:55settlement because now

00:39:57the emphasis or the

00:39:58principle of taxation

00:39:59moves on to the

00:40:00consumer.

00:40:01You take that

00:40:02measure.

00:40:02Okay.

00:40:03So after this

00:40:04compensation is now

00:40:05applicable till

00:40:062026, right?

00:40:07The GST compensation?

00:40:08No, it's over.

00:40:10It was till 2022 and

00:40:11then it's over?

00:40:12Yes, it's over.

00:40:12Okay.

00:40:13What you're getting

00:40:14till 26 is the

00:40:16compensation tax gets

00:40:18collected.

00:40:18Okay.

00:40:20It goes towards the

00:40:21payment of the

00:40:23principle and the

00:40:24interest on the

00:40:26borrowings that we

00:40:27did.

00:40:28Okay.

00:40:28During the lockdown

00:40:29when nothing moved,

00:40:32no GST revenues were

00:40:34generated, but still

00:40:36states had to be given

00:40:37money because how

00:40:38will they run

00:40:38otherwise?

00:40:39Correct.

00:40:39So money was

00:40:40borrowed and given

00:40:42to states on the

00:40:43understanding that it

00:40:45will have to be paid

00:40:46back by the

00:40:48compensation cess that

00:40:49we use.

00:40:51Okay.

00:40:51And that compensation

00:40:52cess was therefore

00:40:55extended beyond 22

00:40:57strictly only to pay

00:41:00the compensations due

00:41:03that was to be paid.

00:41:05Assume that during the

00:41:06lockdown, if everything

00:41:08was normal, no

00:41:09lockdown, you would

00:41:10have earned as much

00:41:11as you gave as well.

00:41:13Correct.

00:41:13Without earning your

00:41:14giving because you

00:41:16borrowed.

00:41:16That borrowing has to

00:41:18be paid from where?

00:41:19It has to be paid from

00:41:20the same cess that gets

00:41:22collected.

00:41:23So although till 22 we

00:41:24gave it to the states,

00:41:26now having extended it

00:41:28till 26, the collected

00:41:30money goes only for

00:41:31paying the borrowed

00:41:33amount and its servicing

00:41:35of the interest.

00:41:36Okay.

00:41:36So until 2022 they

00:41:37were compensated, but

00:41:39after 2022, till 2026,

00:41:42whatever the state gave

00:41:43to the center during the

00:41:44times of COVID.

00:41:45No, no, no.

00:41:45Whatever the GST

00:41:47council borrowed to pay

00:41:48the states.

00:41:49Okay.

00:41:50And that is now being

00:41:51collected in the form

00:41:51of?

00:41:52The same cess is getting

00:41:53collected till 26.

00:41:55Okay.

00:41:55And the collected cess

00:41:56between 22 and 26 goes

00:41:59for paying that borrowed

00:42:00amount, which the GST

00:42:02council borrowed to pay

00:42:04the states the

00:42:05compensation cess.

00:42:07Okay.

00:42:07During the lockdown.

00:42:09Understood.

00:42:10Between 2017 and 2022,

00:42:14states were given a 14%

00:42:17compensation.

00:42:19Okay.

00:42:19Meaning every state based

00:42:21based on the 2015-16 base

00:42:24year would be growing at

00:42:26a particular level.

00:42:28Each state grew at its

00:42:29own level based on the

00:42:30trend of the earlier

00:42:31collection.

00:42:32But the GST at the time

00:42:34of launching agreed that

00:42:37it will be assumed that

00:42:38all states will grow in,

00:42:40say, at a 14% level.

00:42:42Now, if you actually grew

00:42:45only at 10% level,

00:42:47hardly any state grew at

00:42:4910%, but many of them

00:42:50grew at 7% or 8% best

00:42:52performers, the others

00:42:53performed less, better,

00:42:55whatever be it.

00:42:57So, if you actually grew

00:42:58at only 7% or 8%,

00:43:00the rest 7% or 6%

00:43:04would be given to you

00:43:05by the compensation cess,

00:43:09which was levied on

00:43:10extra luxurious or

00:43:13sinful goods.

00:43:14Okay.

00:43:15So, that money was

00:43:15collected in the name

00:43:16of compensation cess.

00:43:18And that was used to

00:43:20give the differential

00:43:21between actually what

00:43:23revenue was earned

00:43:24and the protected revenue,

00:43:26which is 14% will be

00:43:27guaranteed to every

00:43:28state.

00:43:28So, between 14% and

00:43:297%, the gap was paid

00:43:32through the compensation

00:43:33cess.

00:43:34Okay.

00:43:34But that was only up

00:43:35to 22%.

00:43:37And in the COVID year,

00:43:39because we couldn't

00:43:40collect anything, we

00:43:41borrowed money and

00:43:42kept that promise up.

00:43:45All right.

00:43:46So, who's going to pay

00:43:47the borrowed money?

00:43:48After 22, we extended

00:43:50the collection and with

00:43:52that money, we are

00:43:52paying back the

00:43:53borrowed money.

00:43:55Understood, ma'am.

00:43:55And this is very,

00:43:56very clear to us because

00:43:57from the mainstream

00:43:59media, what I understood

00:43:59is that there are

00:44:01states like Tamil Nadu

00:44:01which were protesting

00:44:02because they were

00:44:03saying that it's like

00:44:04penalizing the states

00:44:04for investing so much

00:44:05money into building

00:44:06factories when there are

00:44:08states which are just

00:44:08consuming things.

00:44:09The state is not

00:44:09building factories.

00:44:11What are you saying?

00:44:11No, what they're saying

00:44:12is that we spent, we

00:44:13put in so much efforts

00:44:14and thousands of

00:44:15flows into building

00:44:16highways but all of

00:44:18our efforts are being

00:44:19penalized because our

00:44:20revenue is going to the

00:44:20consumer state.

00:44:21That was the narrative

00:44:22so I just wanted to ask

00:44:23you that question.

00:44:24Okay.

00:44:25Now, the next question

00:44:25that I have is about

00:44:27this again north-south

00:44:28divide that's out there

00:44:29and I want you to

00:44:30clarify this just like

00:44:31you did for GST.

00:44:32and this is coming

00:44:34from the divisible

00:44:35pool of taxes.

00:44:37By the way guys,

00:44:37for those who don't

00:44:38know, this is just

00:44:39for the audience.

00:44:40If the center collects

00:44:421000 crores, 41% of

00:44:44it in 2024 goes to

00:44:46all the states.

00:44:47So 1.8% might go to

00:44:49Kerala, 6% will go to

00:44:50Maharashtra and so on

00:44:51and so forth and the

00:44:51finance commission

00:44:52decides which state

00:44:53will get how much

00:44:54percent.

00:44:56And this pool right

00:44:57now is about 12 lakh

00:44:58crores.

00:44:59Right ma'am?

00:44:59Is that correct?

00:45:00Okay.

00:45:01Ma'am, here's where

00:45:02the finance minister

00:45:03of Kerala, K.N.

00:45:05Balgopal argues.

00:45:07He says that Kerala

00:45:07gets only 21 rupees

00:45:09against every 100

00:45:09rupee that Kerala

00:45:10collects.

00:45:11But for UP, this

00:45:12number is 46 out of

00:45:13100 and for Bihar,

00:45:14it's drastically high.

00:45:15Bihar gets 70 rupees

00:45:17out of the 100 rupee

00:45:18that it collects.

00:45:19And here's where the

00:45:20north-south divide

00:45:20narrative comes into

00:45:22play ma'am.

00:45:22So ma'am, what is the

00:45:23logic behind dividing

00:45:25this pool of money

00:45:26between different states

00:45:28and why is there

00:45:29such a drastic

00:45:30difference?

00:45:34First of all, I

00:45:36think this narrative

00:45:37is somewhat

00:45:40distorted.

00:45:41Okay.

00:45:42I'm not coming into

00:45:43saying the numbers

00:45:44are distorted.

00:45:45I'm not even.

00:45:46I'm saying the

00:45:46principle on the

00:45:48basis of which this

00:45:49is being put out

00:45:50is absolutely

00:45:52distorted.

00:45:53Okay.

00:45:53I'll start from

00:45:54an example and

00:45:55elaborate.

00:45:57Let's take Kerala.

00:45:59Let's take

00:46:00Tamil Nadu.

00:46:01Let's take

00:46:01Karnataka.

00:46:03If actually the

00:46:04total amount of

00:46:06revenue or

00:46:06taxation that you

00:46:07pay is the

00:46:10principle on the

00:46:11basis of which

00:46:11tax has to be

00:46:12given back to

00:46:13you, Kochi in

00:46:15Kerala would take

00:46:16away everything that

00:46:18is collected.

00:46:19Yeah.

00:46:20All right.

00:46:21Kochi, which

00:46:22benefits from

00:46:23having one of the

00:46:25world's best

00:46:26ports, which is a

00:46:28national port in

00:46:30which government of

00:46:31India's money goes

00:46:32in.

00:46:33That port is built,

00:46:34maintained, run,

00:46:36modernized, up,

00:46:37keep.

00:46:38Everything is with

00:46:39the center.

00:46:41Look at the way in

00:46:42which complexity gets

00:46:44into the argument.

00:46:45Yeah.

00:46:46All right.

00:46:47Now, Kochi,

00:46:48therefore, also has

00:46:50an airport to

00:46:53which the central

00:46:54civil aviation

00:46:55ministry spends a

00:46:57lot.

00:46:58Okay.

00:46:59Kochi also has

00:47:01one of the biggest

00:47:01centers of navy

00:47:03for which central

00:47:06government exclusively

00:47:07spends money.

00:47:08Now, all of them

00:47:10have a ripple

00:47:11effect on the

00:47:11economy, Kochi.

00:47:13Correct.

00:47:13Right?

00:47:14But even after

00:47:17that, if Kerala

00:47:19representatives say,

00:47:21Kochi gives so

00:47:22much tax, are

00:47:23you, first of

00:47:24all, excluding

00:47:25these big ticket

00:47:27investments, which

00:47:29are giving the

00:47:30ripple effect for

00:47:30the Kochi economy

00:47:32and pretending

00:47:34that everything

00:47:35that which is

00:47:35happening in

00:47:36Kochi is made

00:47:37out of Kerala's

00:47:38own money?

00:47:38So, it starts

00:47:41with a bit of

00:47:42an illogic

00:47:43there.

00:47:44Okay.

00:47:44Second, if

00:47:47Kochi alone is

00:47:48able to generate

00:47:49so much, what

00:47:51happens to

00:47:52Kannur?

00:47:54What happens

00:47:55to Tirashur?

00:47:57What happens

00:47:57to further up

00:47:58Hodikod?

00:47:59What happens

00:48:01to Patanam

00:48:01Titta?

00:48:03Avi then

00:48:04Singh.

00:48:06Everything that

00:48:06Kochi gives,

00:48:07Kochi gets

00:48:07back.

00:48:09Be damned

00:48:09with the rest

00:48:10of the

00:48:11districts.

00:48:12So, in the

00:48:13case of

00:48:14Tamil Nadu,

00:48:15everything which

00:48:16happens in

00:48:17Chennai or

00:48:17Coimbatore goes

00:48:18back to Chennai

00:48:19and Coimbatore.

00:48:20Be done with

00:48:21velours of the

00:48:22world.

00:48:23Perambalur of

00:48:28the world.

00:48:29Forget

00:48:29Ramana

00:48:30the Puram.

00:48:31Would you

00:48:31say that?

00:48:33No.

00:48:34You can't do

00:48:34anything in

00:48:35Ariyalur.

00:48:37So, come

00:48:38similarly to

00:48:39Karnataka.

00:48:40Your Chitra

00:48:40Durga,

00:48:42your Bidar,

00:48:45Raichur,

00:48:46Yadgir,

00:48:47will all be

00:48:48left because

00:48:49every money

00:48:49will have to

00:48:49be going back

00:48:50to Bangalore.

00:48:51So, what

00:48:53are we

00:48:53trying to

00:48:54convey?

00:48:55I am not

00:48:55even getting

00:48:56to talking

00:48:56about, you

00:48:57know, we

00:48:58give one

00:48:58rupee, we

00:48:58get only 25

00:48:59paisa.

00:49:00No, I am

00:49:00not even

00:49:00coming to

00:49:01that.

00:49:02First of

00:49:02all, as

00:49:04I took the

00:49:04Kuchi

00:49:05example, I

00:49:05will take

00:49:05Bangalore

00:49:06example.

00:49:08How many

00:49:09industries in

00:49:09Karnataka and

00:49:11also in

00:49:12Bangalore or

00:49:12Mangalore are

00:49:14funded by the

00:49:14centre?

00:49:16Leave all

00:49:17that.

00:49:17The common

00:49:18man travels

00:49:18by train.

00:49:21Is the

00:49:22Karnataka leg

00:49:23of the

00:49:23train being

00:49:24funded by

00:49:24Karnataka

00:49:25government?

00:49:26Central

00:49:26government funds

00:49:27it A to

00:49:27B, B to

00:49:28C, C to

00:49:29Z.

00:49:31Railways are

00:49:31fully with.

00:49:33Similarly,

00:49:34Air Force,

00:49:36Bangalore has

00:49:37one of the

00:49:37Air Force big

00:49:37centres, army

00:49:39headquarters there,

00:49:40one of the

00:49:40southern division

00:49:41is there.

00:49:44Are there not

00:49:44monies coming

00:49:45from the centre?

00:49:46So, I

00:49:48want this

00:49:49whole thing

00:49:50to be placed

00:49:51in its

00:49:51proper context

00:49:52and again

00:49:54throwing it

00:49:54as though it

00:49:55is Prime

00:49:56Minister Modi's

00:49:56government which

00:49:57decides on

00:49:57these rates

00:49:58is a

00:50:00deliberate

00:50:00attempt to

00:50:01mislead.

00:50:02After all,

00:50:03people who

00:50:03are sitting in

00:50:04governance holding

00:50:04responsible

00:50:05constitutional

00:50:06positions do

00:50:08realise that

00:50:10these are not

00:50:10percentages decided

00:50:12by Prime

00:50:13Minister or the

00:50:14government of

00:50:15India, there

00:50:16is a

00:50:16constitutional

00:50:17body called

00:50:17the Finance

00:50:18Commission that

00:50:19decides it.

00:50:22So, when that

00:50:23next commission

00:50:23comes which is

00:50:24already constituted,

00:50:25the 16th, meet

00:50:27them and put your

00:50:28cases forward.

00:50:30What are the

00:50:30most important

00:50:31parameters that the

00:50:32Finance Commission

00:50:32considers while

00:50:33distributing this

00:50:34money from the

00:50:34divisible pool?

00:50:35A few things

00:50:36remain throughout

00:50:38and a few others

00:50:39keep changing,

00:50:40being brought in

00:50:41and so on.

00:50:42And I know

00:50:43the one solid

00:50:44argument which

00:50:45the southern

00:50:46states would

00:50:47put in is

00:50:47about population,

00:50:49also put about

00:50:52schools and

00:50:53colleges and

00:50:53medical facilities

00:50:54and so on.

00:50:57But whatever be

00:50:58it, the

00:51:00arguments will

00:51:01have to be put

00:51:01to the

00:51:02consideration of

00:51:03the Finance

00:51:03Commission and

00:51:04once the

00:51:05Finance Commission

00:51:05decides on the

00:51:06rates, we have

00:51:08to follow it.

00:51:09So, population

00:51:10is one parameter.

00:51:11Ma'am, any

00:51:12other major

00:51:12parameters?

00:51:13I think, education,

00:51:14climate, resilience,

00:51:17many other

00:51:18things.

00:51:19So, obviously,

00:51:19when you talk

00:51:20of the state's

00:51:21GSTP and the

00:51:22population, it

00:51:23will all fall in

00:51:23place.

00:51:24Okay.

00:51:24Because here's

00:51:25where again,

00:51:25Kerala brings

00:51:26another argument.

00:51:26Right now, Kerala

00:51:27is facing an

00:51:27economic crisis.

00:51:29And I just did

00:51:29some math and

00:51:30they said that,

00:51:31you know, from

00:51:32the 10th Finance

00:51:33Commission to the

00:51:3315th Finance

00:51:34Commission, our

00:51:35share in the

00:51:35divisible pool has

00:51:36decreased from

00:51:373.8% to

00:51:381.9%.

00:51:39They've said that?

00:51:40Yeah.

00:51:40I want to say,

00:51:42I want to say,

00:51:43even before you

00:51:44complete your,

00:51:47till the

00:51:49constitution and

00:51:50completion of the

00:51:51work of the

00:51:5214th Finance

00:51:53Commission,

00:51:5514th Finance

00:51:56Commission's report

00:51:57was submitted in

00:51:582014.

00:51:59First thing,

00:52:01which after the

00:52:02Prime Minister took

00:52:03charge in 2014,

00:52:0514th Finance

00:52:05Commission's report

00:52:06came.

00:52:06Okay.

00:52:07So, till then,

00:52:09beginning the

00:52:1010th, till the

00:52:1114th, mostly, it

00:52:15was the UPA

00:52:16government.

00:52:17Okay.

00:52:17Mostly, in most

00:52:19of these UPA,

00:52:20Congress-led UPA

00:52:21governments, Kerala

00:52:23has had at least

00:52:25five or more

00:52:27ministers sitting

00:52:28there.

00:52:29Other than the

00:52:30Kerala government

00:52:31themselves, couldn't

00:52:33the ministers in

00:52:34the Kerala, I

00:52:35mean, in Congress-led

00:52:37UPA, ministers

00:52:38who came from

00:52:39Congress, tell

00:52:41their own

00:52:42government, saying,

00:52:43please go back to

00:52:43the Finance

00:52:44Commission, Kerala's

00:52:45revenue is coming

00:52:46down, to pick it

00:52:49up now and throw

00:52:49it at us.

00:52:5110th, 11th, 12th,

00:52:5313th, 14th, 15th.

00:52:55They themselves are

00:52:56saying, right?

00:52:56Yeah.

00:52:57From the 10th to

00:52:5814th, it's all been

00:52:59falling.

00:53:00It was all yours.

00:53:03Because, ma'am, the

00:53:04argument is coming

00:53:04right now and is

00:53:05becoming more relevant

00:53:06because right now

00:53:06they're facing an

00:53:07economic crisis.

00:53:08And I try to

00:53:09understand the

00:53:09gravity of this

00:53:10argument.

00:53:11So, 3.8%...

00:53:11It has nothing to

00:53:12do...

00:53:12I mean, I'm

00:53:13sorry to interrupt

00:53:13again.

00:53:14You say, revenue

00:53:16falling may be one

00:53:18of the problems.

00:53:21Your own state's

00:53:22efficiency in

00:53:23collecting revenues.

00:53:24What is the

00:53:25problem over there,

00:53:26ma'am?

00:53:26Why is it so

00:53:27inefficient?

00:53:27I'm asking this

00:53:28as a question.

00:53:29Okay.

00:53:30Why not look at

00:53:31your own state's

00:53:33resources that you

00:53:34collect?

00:53:35Be more efficient.

00:53:36Bring in more

00:53:37elements into it.

00:53:39And also, the

00:53:41borrowing on which

00:53:42they went to the

00:53:43court, to the

00:53:44Supreme Court.

00:53:45I'm asking, budgetary

00:53:47borrowing, extra

00:53:49budgetary borrowing?

00:53:51Please account for

00:53:52all of them in the

00:53:53assembly where

00:53:54elected representatives

00:53:55of Kerala are

00:53:56sitting.

00:53:58You don't talk

00:53:59about the borrowing

00:54:00which has been

00:54:00extra budgetary and

00:54:01continuing at some

00:54:03level till now.

00:54:05Whereas, who have a

00:54:06problem with

00:54:08revenue falling?

00:54:10If the central

00:54:11share is falling,

00:54:12I'm also asking,

00:54:13every state has its

00:54:14own way of improving

00:54:15their own collection,

00:54:17their own state's

00:54:18own resources.

00:54:21Understood, ma'am.

00:54:22So, you're saying

00:54:22that this will pool is

00:54:23not a practical

00:54:24solution.

00:54:24They have to manage

00:54:25their economic system

00:54:26better.

00:54:26That's also one of

00:54:27the things they have

00:54:28to give their own

00:54:28attention.

00:54:29Many states have

00:54:30shown rapid changes

00:54:32in the way in which

00:54:33they brought in more

00:54:34creative ways of

00:54:36revenue generation.

00:54:37Okay.

00:54:37For example, ma'am?

00:54:39Look at the way

00:54:40stamp duty has been

00:54:41handled.

00:54:41Okay.

00:54:42Maharashtra, for

00:54:42instance, during

00:54:44COVID, realized that

00:54:45unless they were going

00:54:46to change their

00:54:47approach towards

00:54:48stamp duty, the

00:54:50inventory which was

00:54:51sitting in real

00:54:52estate, meaning

00:54:54built properties,

00:54:55housing, will

00:54:58languish, and they

00:54:59changed the rate, and

00:55:01what a difference it

00:55:02made.

00:55:03They collected more

00:55:05revenue, the inventory

00:55:06with all the builders

00:55:07was cleared, now

00:55:09there's fresh demand

00:55:10for more housing.

00:55:11That is one of the

00:55:12ways to do it.

00:55:14The other way to do

00:55:15it, there are still

00:55:16some items which are

00:55:17exclusively left to

00:55:19the states.

00:55:20In that, are you

00:55:22efficient?

00:55:22I'm not asking for

00:55:23an increase in tax.

00:55:25Because I know

00:55:27there is this

00:55:27temptation, people

00:55:28will immediately say

00:55:29that, oh, she's

00:55:30suggesting increasing

00:55:31tax.

00:55:31No, I'm not saying

00:55:32that.

00:55:32Efficient tax

00:55:33collection.

00:55:33Efficient tax

00:55:35collection, plug

00:55:36loopholes, make sure

00:55:38that you're using

00:55:39technologies to

00:55:40understand where

00:55:41evasion is happening.

00:55:43Loophole is one

00:55:44thing, evasion is

00:55:45another.

00:55:47You know, there can

00:55:48be people who are

00:55:49completely avoiding

00:55:50paying taxes, finding

00:55:52out ways in which

00:55:53they can skip the

00:55:54net.

00:55:55Correct.

00:55:55Are we improving

00:55:56all that?

00:55:58Ma'am, you have

00:55:58done a phenomenal

00:55:59job with GST

00:55:59because the number

00:56:01of tax pays is

00:56:01increasing, the

00:56:02amount of tax

00:56:03collected is

00:56:04increasing, and

00:56:05you brought in some

00:56:05revolutionary policies

00:56:06to make tax

00:56:08collection more

00:56:08efficient.

00:56:09So, ma'am, how

00:56:09did you do it?

00:56:11First of all, I

00:56:13must say the

00:56:14readiness to adopt

00:56:16technology and to

00:56:19deploy technology to

00:56:20make it simple is

00:56:22something which

00:56:23prime minister has

00:56:24done in Gujarat.

00:56:25Okay.

00:56:25He as prime

00:56:26minister now, as

00:56:28chief minister in

00:56:28Gujarat and as

00:56:29prime minister now,

00:56:30continuously kept us

00:56:32pushing, saying, can

00:56:33you not bring in

00:56:34technology to assess

00:56:36where it goes, how it

00:56:37gets collected, can you

00:56:38not see using, you

00:56:40know, artificial

00:56:40intelligence, where you

00:56:43can trace the money

00:56:45and where loopholes

00:56:47are happening or

00:56:48where wrong hands

00:56:49are receiving, let

00:56:51us say, the refund

00:56:52that you're paying,

00:56:53or false claims

00:56:54being laid, saying,

00:56:56I've exported so

00:56:57much, give me some

00:56:58money back, where

00:56:59actual export has

00:57:00not happened, only

00:57:02paper, you know,

00:57:03shuffling has

00:57:04happened.

00:57:05So, using technology

00:57:07for the purposes of

00:57:08better revenue

00:57:08collection has actually

00:57:10given us good

00:57:11results.

00:57:12Otherwise, you

00:57:12will be fishing or

00:57:14as you say, in

00:57:15technology-based

00:57:16language, internet-based

00:57:17language, fishing

00:57:18expedition would be

00:57:19going on.

00:57:20You will be, you

00:57:21know, doing a wild

00:57:22goose chase.

00:57:24What we are doing

00:57:25now is, when you do

00:57:26with the AI, you are

00:57:28able to get the

00:57:29entire spider's web

00:57:31as it were.

00:57:32So, one leads to

00:57:33another, third leads

00:57:34to the fourth, fourth

00:57:35leads to something

00:57:36else.

00:57:36So, you touch one,

00:57:37you are able to touch

00:57:38everybody else.

00:57:39So, the whole web

00:57:40just falls apart.

00:57:43Ma'am, can you give

00:57:43me one example of

00:57:44this?

00:57:45One example of

00:57:46this was in the

00:57:48input tax credit.

00:57:50Okay.

00:57:52In the GST, you

00:57:54get the credit or

00:57:57if there is an

00:57:58inversion, you get

00:57:58the refund back.

00:58:00Okay.

00:58:01In such cases, where

00:58:03there is no

00:58:04transaction happening,

00:58:05but bills are being

00:58:06shown, you ended up

00:58:08having to base the

00:58:10bill, pay the

00:58:11people.

00:58:11bill.

00:58:12Okay.

00:58:12But the bills are

00:58:13only paper work.

00:58:15Like, even in the

00:58:16toll tax, which was

00:58:18moving, a truck would

00:58:20move up and down two

00:58:21or three times with no

00:58:23stuff in it.

00:58:24Oh, okay.

00:58:25And the claim would

00:58:26be, this truck went

00:58:27four times and

00:58:27therefore, you have to

00:58:28pay us to that

00:58:30extent.

00:58:30Okay.

00:58:31Where no mall was

00:58:32transported.

00:58:34Okay.

00:58:34That came to light

00:58:35because, particularly

00:58:37because Gujarat and

00:58:39Uttar Pradesh, both

00:58:40came up saying,

00:58:41something is hanky

00:58:43panky here, we'll have

00:58:44to check it up.

00:58:45How did they identify

00:58:46that, ma'am?

00:58:46One truck?

00:58:47The same truck

00:58:48registration number.

00:58:50How many times will

00:58:50he go within a

00:58:51matter of 48 hours in

00:58:53two different distances

00:58:54which are more than

00:58:55300 kilometers each?

00:58:57I'm saying roughly.

00:58:58Okay.

00:58:59So then, they got

00:59:00nosy about the

00:59:01whole thing and when

00:59:01they actually went in

00:59:03to find out, they

00:59:04got to know it.

00:59:04Ma'am, this almost

00:59:05looks like a Netflix

00:59:06documentary.

00:59:06That's right.

00:59:07Most of the customs

00:59:08related and GST

00:59:09related matters are

00:59:11all coming up because

00:59:12of these kind of

00:59:13mild efficiencies,

00:59:15which officers say,

00:59:17you know.

00:59:17They detect something

00:59:19and then they're

00:59:20curious, they want to

00:59:21tie up the loose

00:59:22ends, they end up

00:59:24seeing a big problem

00:59:25and technology helps

00:59:28them today instead

00:59:29of having to, you

00:59:30know, spend hours

00:59:31searching for where

00:59:33it goes, who's the

00:59:33fellow who ultimately

00:59:34receives it because

00:59:35money trail is so

00:59:36quickly established.

00:59:37This is almost like

00:59:38an FMCG company

00:59:39trying to find out

00:59:40leakage.

00:59:40That is excellent,

00:59:41ma'am.

00:59:42Ma'am, one last

00:59:43question.

00:59:43If your government

00:59:45comes to power, what

00:59:46is your vision for

00:59:47India from 2024 to

00:59:482029, ma'am?

00:59:50I think broadly, it's

00:59:51very well laid out.

00:59:54First of all, get to

00:59:55the third largest

00:59:57economy within a year

00:59:59and a half or two.

01:00:00Okay.

01:00:01Unless, you know,

01:00:02something black

01:00:03swan, we don't know.

01:00:04But otherwise, we

01:00:05should be able to.

01:00:06Okay.

01:00:06And work towards

01:00:092047, Vikasiddh Bharat.

01:00:11And primarily, ease of

01:00:12doing business for

01:00:13that.

01:00:13Yes.

01:00:14And to make sure that

01:00:15manufacturing, make in

01:00:17India, Atmanirbar,

01:00:18Bharat, all go hand

01:00:20in hand.

01:00:21You already have a

01:00:22service sector which is

01:00:23contributing more than

01:00:2460% to our GDP.

01:00:26You already have an

01:00:28agriculture sector where

01:00:29there's a lot of

01:00:29activity today to

01:00:30export and give the

01:00:33farmer better returns

01:00:34on his produce.

01:00:36Because exporting

01:00:37abroad, he gets

01:00:38money in foreign

01:00:39exchange that gives

01:00:40him better yield,

01:00:42assurance that his

01:00:43products will be sold

01:00:44at that price and so

01:00:45on.

01:00:46So, the comfort of

01:00:47export will have to

01:00:48also be extended.

01:00:49But of course, because

01:00:50in India, we can't be

01:00:53indifferent to the

01:00:54prices at which

01:00:55products will be sold.

01:00:57The consumer end of

01:00:58agricultural products

01:01:00is also important.

01:01:01Farmers important, the

01:01:02other end the

01:01:03consumer is important.

01:01:04So, everything going

01:01:05for export is going to

01:01:06make it too expensive

01:01:07expensive and probably

01:01:08goods will not be

01:01:09available for Indian

01:01:10consumers.

01:01:11Correct.

01:01:11So, we'll have to

01:01:11find a balance there

01:01:13for agriculture and

01:01:15manufacturing as I

01:01:16said.

01:01:17So, balance of

01:01:18agriculture, manufacturing,

01:01:19ease of doing business

01:01:20eventually leading us to

01:01:21the third largest

01:01:22economy and the vision

01:01:22of 2047.

01:01:23Is that correct, ma'am?

01:01:24Thank you so much, ma'am.

01:01:25Thank you so much for

01:01:26being so patient with all

01:01:27of your answers.

01:01:28Especially for giving

01:01:29examples because I was

01:01:30able to understand

01:01:30everything.

01:01:31I just hope everybody

01:01:31else did.

01:01:32Thank you so much, ma'am.

01:01:33It was a pleasure to

01:01:34have you.

01:01:34Thank you very much.

01:01:35Thank you so much.

Category

Transcript

Recommended