Apropos of the news story “Raghuram Rajan optimistic on GST bill” (FE, December 8), the federal structure of our nation was being sadly misconstrued on vital aspects of economy. At present, the myriad indirect taxes levied by the Centre and states add up to 27%. The goods and services tax (GST) of 14%—as once recommended by the Kelkar committee—and now by the Arvind Subramanian report at 17-18% has the potential to reduce existing indirect tax by 10% to 13% to yield a huge domestic fiscal stimulus to the economy. The GST being applicable at the point of consumption, rather than at the point of manufacture, would do away with leakage of revenue through lax assessments such as excise as also improve compliance. The reluctance of state governments to address such leakage has been unfortunate as of the larger political class, when it dallied with the GST Bill, introduced earlier. Better sense should prevail now.
There is a colossal loss of men and material wealth in the recent deluge at Chennai and some other parts of Tamil Nadu. As always, the government has a dominant role to play in the relief and rehabilitation of the people who are most affected. The private sector too, as part of it corporate social responsibility initiatives, has come forward and supported the affected people. For example, automobile companies based in the Chennai region are actively taking part in relief measures. The lower strata of society and the middle class especially have lost several valuable items to floods, especially electronic gadgets such as television, refrigerator, etc. In this hour of crisis, consumer durable companies such as LG, Samsung and others can make suitable arrangements with their local dealers so that the affected electronic items can be repaired for free or at a nominal charge. In case an item cannot be repaired, such companies can come out with mega exchange offers, again for free or at a nominal charge. This is an opportunity for companies to generate goodwill.