All posts by bizeditors

The Most Comprehensive Compilation of GST Issues #India

Latest reports indicate that about 44 lakh businesses have filed GST returns taking revenue collections from GST to about Rs 94,000 crore.

As business owners, entrepreneurs, tax professionals and accountants grapple with various issues, here is an attempt to present a comprehensive compilation of various GST Issues in India – both policy as well as implementation issues.

If we have missed some issues, please email to admin@bizvidya.com to have those issues added to this list.

GST Issues

[A] GST Implementation Issues

  1. Digital Signature Issues:
    1. A seemingly simple but essential aspect of filing returns led to considerable delays. Under GST, all returns have to be signed electronically with a digital signature certificate (DSC). Jigar Doshi (SKP Group) pointed out that many of his clients were unable to attach DSC due to technical issues. Pratik Jain (PWC) said the DSC was not getting accepted for authentication of returns, despite being valid and functioning and it took multiple attempts to authenticate the returns by using DSC (5).
    2. A particular company could not pay tax, as the CFO of the company holding the digital signature had resigned. The new signatory could not be added until the old signatory allowed the use of his digital signature to include new signatory. The situation gets worse in cases where the signatory has expired or has moved out of the country (4).
  2. TRAN 1:
    1. Taxpayers who intend to carry forward transitional credits – from the pre-GST regime – can file form TRAN 1 till September 28. But those who intended to use the transitional credits to offset their tax liability in July had to fill this form by August 28. To fill out this form, the Goods and Services Tax Network had promised an offline utility tool. But the GSTN failed to deliver on its promise (5).
    2. With the August 28 (Monday) deadline looming for filing returns and ensuring GST compliance, corporates are a deeply concerned lot. The offline utility for GST TRAN 1 form — to be used to claim input tax credit for the pre-GST regime — was not available till Sunday, leaving just a day for filing returns and causing a weekend rush (8).
  3. E-cash ledger
    1. An e-cash ledger works like a wallet for GST purposes. It reflects the amount deposited towards GST liability and debits made to pay tax, interest or penalty. In the GSTN system, the cash ledger for all the laws – Central, State and Integrated GST – is maintained separately, Pratik Jain (PWC) said. But there is no facility to transfer funds from one cash ledger to another, he added. The balances in electronic cash ledger belong to the taxpayers and so, transfer of balances between different heads in electronic cash ledger should ideally be allowed, he added.
    2. Besides this, multiple entries are shown in the electronic cash ledger and sometimes credits made available are more or even less than actually claimed in TRAN-1; obviously these are system errors, Jigaar Doshi (SKP Group) pointed out (5).
  4. Handling data errors:
    1. A another aspect that continues to confound taxpayers about TRAN -1 is whether they can submit a revised TRAN-1 before September 28. A few tweets from government handles suggest that TRAN-1 can be revised; however, there is no clarity on this (5).
    2. There have also been cases where companies have deposited cash under the wrong tax head or have submitted the return with wrong information only to realise it later but with no recourse to change it (4).
    3. Jain pointed out that the GSTN did not allow any rectification or modification in the return once it was submitted. In some cases, the tax liability of the assessees increased by crores of rupees, just due to inadvertent punching of an extra digit in the form, he added. Much to the relief of assesses, the government has now addressed this concern and notified that changes in the summary returns can be made through GSTR-1 and GSTR-2 (5).
  5. Invoice Date Issues:
    1. Some taxpayers are facing errors when the invoice date is before the customers’ registration date (1).
    2. “Since this is the first time of filing GST returns taxpayers are struggling with how to report information under different sections of the GSTR-1. Some are confused and are reporting the same invoice under separate sections of GSTR-1. Some taxpayers are seeing errors where invoice date is before the date of registration of the supplier,” says ClearTax, Founder and CEO (2).
  6. Data Required Mismatch with Notified Rules: The additional data and columns that the GSTR-1 has is different from the format which was notified. For example, there is a column which asks the reasons for giving a debit note. It even asks if the debit note is corresponding to pre-GST or post-GST time frame. This is not there in the notified rule, but when you go online to file the return, such additional data gets thrown up. (2)
  7. Auto-Checks: There are times when companies are uploading invoices, but the system automatically says the invoices cannot be from the pre-GST regime. What has stumped many is the auto-checks the system has been built around. Any divergence and the system refuses to take an entry. “Taxpayers are navigating through a complex web of auto checks, which many a time is not allowing valid transactions, keeping them at tenterhooks. For instance, supplies to SEZ has an IGST component, but the system is not allowing IGST if the supplier is in the same state,” says KPMG, Partner, Priyajit Ghosh. (2)

 

[B] GST Policy Issues

  1. Hand Crafted Goods ignored: A note prepared on behalf of the hand-made goods segment and shared with the Prime Minister’s Office draws attention to the fact that the word ‘hand’ (as in, for instance, hand-made or handicraft) is entirely missing from the GST list of items – except for a perfunctory reference to ‘handloom machinery’. This implies that the concepts of ‘handwork’, ‘handicraft’, and ‘hand skills’ have not been acknowledged at all in the GST framework (6).
  2. Small Sellers required to register if selling inter-stateEvery supplier, howsoever small, is required to register under GST when making inter-State supply, which adds to the compliance burden forvery small players like artisans. For example, they may be selling to online portals or those who conduct fairs in various States (6).
  3. Small Exporters:
    1. Small exporters are disadvantaged vis-a-vis big players like those with coveted star trading house tag as they are being asked to furnish bonds and Letter of Undertaking (LUT) to local commissioners unlike the latter (3).
    2. What is more, exporters are running between the offices of customs commissioners and assistant customs commissioners who have been officially delegated powers to accept bonds and LUT but are reluctant to use the new authority for some reason, industry sources said (3).
  4. Credit on Business ExpensesIt is recommended to allow credit on all business expenses rather than restricting some of them. The negative list is still quite big and open to interpretations (4).
  5. Credit linked to Recipient making PaymentIt is recommended that Credit should not be linked to the recipient making payment to the supplier. Business exigencies may require holding back payments or business transactions may require not paying the supplier at all. The government need not walk into the realm of business transactions, especially when online matching ensures that the tax on the underlying transaction is paid (4).
  6. Multiple Tax Slabs for similar items:
    1. The same product can fall under differential tax slabs. For instance, there is no GST on rice sold loose, while branded rice attracts 5% tax.  But because a brand is not recognised legally unless it is registered under the Trade Marks Act, 1999, India Gate, the country’s highest-selling rice brand, will not attract the 5% GST – and will, therefore, have a price advantage over competing registered brands (7).
    2. A similarly curious clause is that yarn blended with more than 50% polyester attracts 18% GST, but yarn with more than 50% wool has a levy of 5% GST. In Uttar Pradesh’s Bhadohi, famous for its carpets, officials were recently asked by traders what GST rate applied to blended yarn with 50% wool and 50% polyester. They did not have a clue.Some suppliers in Bhadohi say they have already planned to show yarn blended with more than 50% polyester as yarn with more than 50% wool in their records (7).
    3. A textile manufacturer pointed to the irrationality of imposing 18% GST on processing chemicals and 28% GST on finishing chemicals, which are used in two different stages of production. Both chemicals come in black boxes, he said. Remove or switch stickers and government officials cannot tell one from the other. Yet the manufacturer said that there are fears that the officials might accuse manufacturers of playing this game even if they have not – and demand money (7).
    4. A fully constructed apartment bought by making a one-time payment will incur zero GST after undergoing verification from a regulating committee. By contrast, all construction-linked payments for flats will incur 18% GST. An apartment costing Rs 1 crore under such a plan will attract Rs 18 lakh as tax, an undeniably huge sum. One realtor said that he could foresee what will happen. He said to save on GST, Person X will book a flat in the name of Y, who is his dummy. The instalments Y pays will actually be X’s money. When the last instalment is due, Y will notify the builder that he does not want to buy the flat, said the realtor. The builder will tell the regulating committee that Y has backed out, but he is fortunate to have a new purchaser in X. The builder will refund Rs 80 lakh to Y, whose money it wasn’t anyway. X will then buy the now completed flat for Rs 1 crore and not pay GST, said the realtor.Such a method will raise issues of income disclosures, but the narrative underscores that multiple, high tax rates are already driving people to think of dodging GST (7).
    5. The state is asking to be cheated by hotels where multiple GST rates also apply. Rooms priced between Rs 1,000 and Rs 2,500 attract 12% GST, but those between Rs 2,500 and Rs 7,500 will have 18% GST. It is possible that hotels with low occupancy will woo customers by making them stay in the more expensive rooms, but bill them for those priced lower. The state will lose 6% tax (7).
    6. Many low-priced items such as needles, kites, carnival toys and broomsticks are now taxed. Mahesh Krishnamurthy, founder of Craftisan, an e-commerce platform for hand-crafted products, says that under the earlier tax regime, in Delhi, VAT was 0 to 5 per cent for handlooms and handicrafts, but now the tax range is from 3 per cent to 18 per cent. “The retail price for consumers will have to increase, which may potentially cause reduced absorption,” he says. Also, certain products and raw materials that are hand-made by the most disadvantaged groups are under punitive GST rates (6).

Sources:

  1. http://www.business-standard.com/article/economy-policy/gst-return-filing-woes-remain-117090600032_1.html
  2. http://economictimes.indiatimes.com/small-biz/policy-trends/gst-return-filing-stumps-millions-of-taxpayers-filing-portal-keeps-throwing-tantrums/articleshow/60372889.cms
  3. https://thewire.in/173540/india-exports-gst-slump/  
  4. http://www.forbesindia.com/article/special/gst-heres-what-would-help-its-smooth-implementation/48033/1
  5. https://www.bloombergquint.com/gst/2017/09/04/the-pain-behind-rs-92283-crore-gst-collection
  6. http://www.thehindubusinessline.com/economy/gst-watch-hands-that-craft-have-gone-missing/article9837072.ece
  7. https://scroll.in/article/843861/how-multiple-tax-slabs-provide-small-manufacturers-suppliers-service-sector-a-reason-to-dodge-gst
  8. http://economictimes.indiatimes.com/news/economy/policy/companies-fear-losing-credit-over-gst-filing-errors/articleshow/60249529.cms

Looking for a CTO for funded venture

A well-funded venture in Mumbai region is looking for a world-class CTO to lead and enhance the technology infrastructure for a successful online product (portal) with a successful brick-and-mortar business model.

The CTO /  VP Tech would:

  • Conceptualize and own the technology vision of the venture
  • Create a roadmap to set-up technology infrastructure for venture
  • Align technology and product with organizational strategic vision
  • Synchronize technology and product with branding, marketing and growth strategies
  • Build and lead a world-class technology team

Email your profile to careers@bizvidya.com for a completely confidential discussion.

CodeBharat – App Developers Invited for In-House Entrepreneurship Program #Delhi

Code Bharat Program for App Developers
Code Bharat Program for App Developers

Digital Empowerment Foundation (DEF), under its CodeBharat program, is inviting applications from individual App developers who are passionate about working on real-world bottom-of-pyramid problems and implementing cutting-edge solutions.

This is an exciting opportunity for developers to conceptualize, visualize, design and develop solutions that improve the quality of life for underprivileged communities in rural areas. Through this program, DEF aims to nurture innovators who are inspired to solve social problems and are passionately self-driven to lead a project from ideation and conceptualization to design and development, taking responsibility for end-to-end execution of ideas.

This program shall provide the necessary resources and infrastructure to help app developers translate their skills and passion into real-world working solutions for social development and impact purposes. DEF shall engage and nurture app developers in different solution categories based on their interests, skills and strengths.

Here is an illustrative list of categories:

Apps for Education: There are about 1.4 million schools in India employing about 7 million teachers. Areas of designing mobile solutions could be around improving access to education and enhancing quality of education; increasing attendance at schools; ensuring availability of infrastructure, 100% delivery of education; etc.

Apps for Panchayats: With 265,000 Panchayats in the country and 3 million Panchayat elected members across India, we need tools for Panchayats to manage their resources; engage their communities; achieve better governance; provide services to citizens; etc.

Tools & Utility Apps: Apps that can ease the process of benchmarking, community mapping, data management, surveys and research. This may also include solutions in areas like identity verification, Aadhar, BPL cards, Ration Cards, Voter Cards, government entitlements and others.

Infrastructure Apps: Apps that help manage large-scale project implementations, monitor government schemes and track local issues, campaigns and elections. Also, tools related to banking, microfinance and complaint mechanisms for local issues like water, transport, crime, etc.

Health Apps: Considering there are about 2 million frontline health workers in India, the entire ecosystems around them needs information dissemination, training and capacity building, monitoring and evaluation, and engage with communities to deliver better health services.

Tenure of CodeBharat Program: 6 – 12 months based on needs of the specific project and availability of the candidate.

Benefits to Developers: A monthly remuneration, incubation support including infrastructure and mentoring support. Developers who complete the full tenure of the program, shall have the opportunity to be co-founders of any entity that may be founded as a result of a successful implementation.

Eligibility Criteria: The applicant should herself / himself be the programmer, coder, visualizer & have very strong sense of understanding of the concerned subjects.

How to Apply: Email your CV with portfolio links to amar@defindia.org mentioning your name, current location and years of experience in app development in SUBJECT of the email with a short note as to why CodeBharat interests you and how you can contribute.

Good Luck!

Exciting Inaugural Launch of PEERSTART

Thanks to all the amazing entrepreneurs who made sure the event was a rocking success!
PeerStrat May 17 2014 Delhi
PeerStrat May 17 2014 Delhi

It was all about rich, in-depth and frank sharing of business challenges, opportunities, solutions and collaboration! A unique engaging rigorous Business Strategy Workout with cross-fertilization of ideas…

…and rich sharing of business referrals & leads!

Next meetup is on June 21, 2014 (3rd Saturday of each month)!

Thanks to #IndiaWowChat.com for covering our event, posting photos and sharing encouraging feedback about us on their Facebook Wall here:
Interesting new groups keep popping up in Delhi – the freshest is Peerstrat initiated by Omnizient Labs. This group is designed for entrepreneurs and SMEs. Participants review each other’s businesses and explore ways to grow faster and be the best in your industry. Lively insightful interaction!

To know more about the structure of PEERSTRAT see this presentation here.

We are getting a huge response on our Facebook post here. Bookmark http://facebook.com/peerstrat to stay tuned for more news and events.

PeerStrat Photo By IndiaWowChat
PeerStrat Photo By IndiaWowChat
PeerStrat on May 17 2014 New Delhi
PeerStrat Strategy Workout on May 17 2014 New Delhi

SME Joinup Partners with Omnizient Labs to promote PEERSTRAT

SME Joinup Network – India’s Largest Services Network, has partnered with Omnizient Labs to promote PEERSTRAT .

PeerStrat SMEJOINUP
PeerStrat SMEJOINUP

PEERSTRAT is a first of its kind event, where entrepreneurs, business professionals, corporate executives take the prime speaking slot instead of monotonous star speakers or a high-power panel. This unique event – a high energy Peer Strategy Review workout (PEERSTRAT) session is being conducted by Omnizient Labs.

Date: Saturday, 17th May, 2014
Timings: 3:30 to 6:30
Location: Samavar, B-36A, Pamposh Enclave, GK-1, New Delhi – 110048

SME Joinup Member Special Offers:

There is a special offer for SME Joinup members. All SME Joinup members can avail of a 25% discount on the fees of attending the event. To avail of this offer, use the Promo Code SMEVIDYA on PeerStrat Event on Sat, May 17, 2014 at New Delhi. To use promo code, click on the link “Have Discount Code?” at http://www.meraevents.com/event/peerstrat. For more information fill the form below.

Why should you attend:

All participants are invited to share the challenges and opportunities they are facing in their business as per the following Five Step PEERSTRAT Agenda:

#1 Build Unique Business – Eliminate Competition!
#2 Recreate Brand – Tell a Compelling Story!
#3 Maximize Revenues – Penetrate Newer Markets!
#4 Maximize Profits – Transform Business Processes with Standard Operating Procedures (SOPs)!
#5 Track Success – Identify Critical Success Measures – What Gets Measured Gets Done!

Plus a Networking session, which will not be just merely exchanging card, but actually people seeking reference from a particular company or seeking some business opportunity or looking for a supplier or any type of business, platform will enable that.

Who should attend:

Independent Professionals, Entrepreneurs, Senior Business Managers, Business Heads, CXOs, Directors, Partners of family owned business, Proprietors, Middle Management.

Cost:

Participation fees are nominal INR 1000 to cover basic cost of the event.

Contact SME Joinup

See the promotion details here. Contact details are here.

SME Joinup Partner: Omnizient Labs

Omnizient Labs is a pioneering Training, Coaching & Consulting organization which specializes in creating a holistic 360 Degree view for individuals and groups and helping them take quick decisions and actions to maximize benefits in a short time.
Omnizient is impacting people in various communities and workplaces across the globe including regions like North America, Europe, Far East and South East Asia.

Looking for Freelance Content Writers & Research Writers

Our work with organizations including Startups, SMEs and NGOs, requires us to churn out world class content at great speed.

Your Interests: You are already well-read and love to read more.

Your Skills: You enjoy research, analysis and sorting tons of statistics and data.

Your Strengths: You have a knack to compile summaries from multiple sources of data.

If this interests you, please email your résumé with links to your work to amar @ bizvidya.com

Location: Delhi, Gurgaon and NCR Region is preferred, though remote writing is possible.

Terms & Payments: Terms & conditions vary from assignment to assignment, so you may freely mention your interest areas and expectations.

Looking for Freelance Content Writers & Research Writers
Looking for Freelance Content Writers & Research Writers

Entrepreneurship Development Programme (EDeP) by iTREE

Entrepreneurship Development Programme (EDeP) by iTREE
Entrepreneurship Development Programme (EDeP) by iTREE

“ENTREPRENEURSHIP DEVELOPMENT PROGRAMME” (EDeP)
Starting From 26th April, 2014

While you are helping India decide its future by casting your Vote…
It’s time also to choose a career for yourself…
Which is exciting, rewarding, performance oriented and limitless….. “ENTREPRENEURSHIP”.

Registrations are invited from students, school or college dropouts, working executives, start-ups or anyone with a dream to become an entrepreneur !

Institute for Training in Employment & Entrepreneurship- iTREE
A Division of IamSMEofIndia
announces
“ENTREPRENEURSHIP DEVELOPMENT PROGRAMME” (EDeP)

DURATION
It is Summer Programme over 12 weekends (24 Days & 108 Hours)
Starting 26th April, 2014

WHO CAN JOIN:

Anyone with dream to become an entrepreneur, students of Management, College students, working executives, start-ups…. anyone!

EDeP NEED & OVERVIEW:

EDeP aims to provide training and mentoring to enable young minds understand the fundamental principles of business and also the real-life practical situations for managing businesses successfully and overcoming the unforeseen, unexpected challenges!

HIGHLIGHTS:

All trainings by real-life Professionals and successful Entrepreneurs, covering all aspects of Business:

  • From nurturing/developing an idea.
  • Identifying resources,
  • Implementation,
  • Project Management,
  • Certification & Registrations,
  • Branding,
  • Safety,
  • Regulations,
  • Govt. Support and Subsidies,
  • Practical Trainings,
  • Project Report Writing,
  • Financial & Business Literacy…. more!
  • Grabbing opportunities,
  • Developing a business plan,
  • Arranging resources/ Bank Finance/ Equity,
  • Operations,
  • Quality,
  • Marketing,
  • HR,
  • Compliances,
  • Laws and Regulations,
  • Global opportunities,
  • Industry-visits.

SPECIAL NOTES:

Participants interested in the programme may write to Mr. Vinod K. Pandita (Programme Director) or Mrs. Suchitra Choudhary (Programme Manager) at itree@iamsmeofindia.com for clarifications, if any.
Once registration is accepted, cancellation /refund queries and requests will not be entertained.

PROGRAMME FEE:

For Students, School & College Dropouts: Rs. 30,000 + 12.36% Service Tax
For Second Generation & Other Aspiring Entrepreneurs: Rs. 45,000+12.36% Service Tax (inclusive of mentoring & support for one year post course completion)

Limited Seats

Last date of Registration: 8th May 2014
EDeP Classes Starting On: 26th April 2014

 The registration is open till 8th May and interested participants can join beginning 3rd May and 10th May sessions.

PAYMENT DETAILS

Payment can be made through demand draft /cheque drawn in favour of  “Integrated Association of MSME of India” payable at Faridabad.

RTGS/NEFT Details :
Integrated Association Of MSME of India
Syndicate Bank
A/c No. 82141010007612
IFSC : SYNB0008214
Branch : NIT Faridabad, Haryana
MICR Code : 110025202

For further details and queries, please contact;
Mrs. Suchitra Choudhary (Programme Manager), +91- 99717.43443.
or
Mr. Vinod K. Pandita
Director-iTREE (+91-9811146673)
I am SME of India
℅. Faridabad Small Industries Association – FSIA
FSIA Park, Opp. Plot No. 23, Sector 24, Faridabad- 121005
info@iamsmeofindia.com ; itree@iamsmeofindia.com
+91-9711123111

All successful participants will duly be awarded with accredited certificate on successful completion.

Invitation to PEERSTRAT at High Tea on Saturday May 17, 2014, New Delhi

Business Strategy: Peer-Review workout session for entrepreneurs and business professionals

Click here to book your seat at Meraevents

Invitation to PEERSTRAT: Peer Strategy Review workout at High Tea on Saturday May 17, 2014, New Delhi
Invitation to PEERSTRAT

Dear Business Folks,

We are delighted to extend an invitation to you for a Peer Strategy Review workout (PEERSTRAT) session conducted by Omnizient Labs:

Date: Saturday, 17th May, 2014
Timings: 3:30 to 6:30
Location: Samavar, B-36A, Pamposh Enclave, GK-1, New Delhi – 110048

The PEERSTRAT sessions enable you explore ways to make your business get bigger, grow faster and be the very best in your industry.

All participants are invited to share the challenges and opportunities they are facing in their business as per following Five Step PEERSTRAT Agenda:

#1 Build Unique Business – Eliminate Competition!
#2 Recreate Brand – Tell a Compelling Story!
#3 Maximize Revenues – Penetrate Newer Markets!
#4 Maximize Profits – Transform Business Processes with Standard Operating Procedures (SOPs)!
#5 Track Success – Identify Critical Success Measures – What Gets Measured Gets Done!

Who will benefit from this event

Independent Professionals, Entrepreneurs, Senior Business Managers, Business Heads, CXOs, Directors @ Companies, Partners of family owned business, Proprietors, Middle Management

Participation

Participation fees are nominal INR 1000 to cover basic cost of the event. Tea and Snacks would be served during the session. Please confirm your participation by marking an email to raj @ bizvidya.com.

Click here to book your seat at Meraevents

Contact Details:
Raju Moza: raj @ Bizvidya.com,  +91-9818-662-001

Role of Board of Directors: Do you have competence and excellence at the top?

An Effective Board!
An Effective Board!

I was recently invited by one ‘Fitness company’ to advise them on how to cut the losses. One of the ways devised by them was to appoint franchisees so that they can have economies of scale for buying equipments and marketing expenses. Now that the company had decided to expand through franchisee route, the whole focus of the said company was to find people, though acquaintances or any other other means who would be their potential franchisees. I had no problems in this strategy, which perhaps was a good and viable option. However, I was my concern was they were missing an important piece when you are expanding your business. In my assessment, they needed to expand their bandwidth at the top and it was necessary to think about composition and functioning of the board. The kind of milestones the company intended to reach would be near to impossible to achieve without a proper board.

In India, the board is plugged mere for regulatory network, in case of private limited, the number of directors required is two and in public limited, the number should be seven. Most of the time, the board is comprised of friends or families, irrespective of their qualifications. Board doesn’t meet often, and whatever transactions it does, it mere does for regulatory considerations. In India, there is a dire need of sound board, but the importance of board is not at all valued in India, let alone talk of actual functioning of board.

The fundamental problem is that, overwhelming number of business people are ill educated about the need of Board. Management studies are bereft about the emphasis of what board potentially can deliver.

Board Room on a lighter note!
Board Room on a lighter note!

Few years back, most of the traditionally business house did underwent professional makeover but board remained untouched, somehow its importance has picked up.

Another misnomer about board is that people think only listed companies require it, whereas in my view the smaller companies need it more. It can provide direction, accountability and better guidance.

In this direction, I am glad that Omnizent labs is driving this educative as well as actually providing Directors for small companies. It will be a low cost exercise for small and medium companies.

For details about how to become a director or how to avail the services of director and make your board strong you may read this introduction page here and write to us at raj@bizvidya.com.

Author: Raju Moza has 14+ years of experience across various industries and domains like Telecom, Retail, Education, Electronic & Mobile Services, Travel & Hospitality and Manufacturing. He has been a turnaround leader with deep insights in understanding of diverse markets. He is regularly invited to speak at seminars and conferences. Besides the strong business pedigree, he is an ‘active writer’, has written some of the critically acclaimed pieces on diverse subjects namely Kashmir, Afghanistan, Political Islam, International Affairs, Political Economy and Short Stories. He recently shot a documentary as well.  He is an MBA in finance and has recently done a Venture Capital development program from ISB, Hyderabad, India.

Where India Went Wrong?

Where India Went Wrong
Where India Went Wrong

Few days ago I woke up to the last quarter growth figures, which have plummeted to unexpected 4.7 % in last quarter ending December 2013. As I write, latest news alerts say India’s exports fall by 3.67% in February 2014.

I got a feeling that this was coming and perhaps it will be difficult for India to come back to the growth trajectory it witnessed in last two decades. Market analysts are busy attributing this down fall to fiscal Deficit, high inflation, policy paralysis, bank rate and myriad of other reasons.

However, my humble submission is that India never looked at its growth impediments holistically. India’s Honourable finance minister is of the view that factors which have contributed to slow down have bottomed out, I beg to differ with him. I am of the view that “Era of high growth” for India is over, only a monumental repair work can bring back it to high growth trajectory, which it witnessed in last two decades.

There are numerous reasons, why this has happened and all of them are plausible but I don’t blame this to pure economics or structural problem, albeit root cause of the problem is somewhere else. I have tried to narrow down it to following three reasons why India have missed a great opportunity:

  1. Growth taken for granted: The perception amongst the policy makers, business people as well state apparatus was that of confidence or even over-confidence, it depicted a sense where all was hunky-dory and that the momentum of growth will remain unabated. Perhaps the basis of this confidence stemmed the way India remain insulated, when 2008 sub-prime crisis hit the world. Another aspect is the way India story was constructed, basis some reports, it gave a false belief in India that high growth is fait accompli. In the bargain, it overlooked the inherent problems in infrastructure, bureaucracy and polity.

  1. Lack of commensurate reforms: Reform was a new word in our lexicon, but the commensurate reforms I am talking about is not typical what we hear like Insurance sector, aviation or retail policy reforms. The two sets of reform which were not commensurate to India’s growth aspirations were Administrative and Political reforms. The way India was administered three decades back, same set of procedures are in vogue. With such an archaic administrative blanket, still one had ambition to become super power defeats logic. As far as the political reforms is concerned,barring some reforms in Election process, overall India polity has worsened.

  1. Over Reliance of Great Indian ‘Jugaad’: Shortcuts, manipulations and a short term view was still the way of life in India. It did some global acquisition, some of its corporations are in fortune 500 list but that ambition of setting up a global empire was conspicuous by its absence. The overall enabling atmosphere encouraged holding a short term view then a long term Nation building Vision.

The history of this world has missed a great opportunity when several million people could have been extracted from poverty. India, as a global power, given its history as nation state, would have been a great balancing power. Its not the misfortune of India, that it missed an opportunity but of world, as it could have been a great contributor to the world progress, if India would have leveraged this opportunity.

Author: Raju Moza has 14+ years of experience across various industries and domains like Telecom, Retail, Education, Electronic & Mobile Services, Travel & Hospitality and Manufacturing. He has been a turnaround leader with deep insights in understanding of diverse markets. He is regularly invited to speak at seminars and conferences. Besides the strong business pedigree, he is an ‘active writer’, has written some of the critically acclaimed pieces on diverse subjects namely Kashmir, Afghanistan, Political Islam, International Affairs, Political Economy and Short Stories. He recently shot a documentary as well.  He is an MBA in finance and has recently done a Venture Capital development program from ISB, Hyderabad, India.