Thoughts on GST Council - Heightened Uncertainty & Black Swan Risks

 Considering reciprocal tariff measures, now GOI is compelled to reduce Import duties.However domestic GST reductions are hanging fire for long esp on Health Insurance since Consumers do not have Bargaining power in the GST council to compel GST council to reduce the rates. 

FM and GST Council will have to  keep this in mind and slash the rates from 24% to 20% and 18% to 15% inorder to minimise the tax burden on the common man who has no clear representation in the GST Council .This will definitely boost consumption by putting more money in the hands of the people and will more than offset the revenue foregone. In times of Uncertainty, Kindly  initiate steps to hear the Citizens' voice in GST Council. Is it not the Common Citizen who has an important stake as beneficiary of States' spending whereas FMs of the States have a mandate only to augment its resources to spend?Revenue side is represented whereas the beneficiary side remains unrepresented or under represented!

2)45 % GST+ TCS 1% on Cars is correct. This must definitely come down . If Personal Consumption is down, it is because of high GsT rates on top of the Inflation in the last few years , hampering discretionary income in the hands of aspirational middle class. GST council must take immediate cognisance of this .Central Govt must boldly undertake to compensate States at 8- 10% revenue growth  for 5 yrs ,to push for GST rate reductions.

3)GOI is working on reduction in Fiscal deficit to 4.4% in FY25-26 and a Debt to GDP ratio of 56.1% as per Statement of Fiscal Policy under FRBM Act,2003,with a goal of reducing the Debt to GDP ratio to about 50%(approx) with an expected Nominal GDP growth rate of 10% to 11% over the next 5 years. While these Goals and Estimates are great what are the Black Swan events that can upset this calculation and so must provide for these risks.Therefore, GOI must have a cushion for a rise in FD and also an unexpected calamity that may push up Debt to GDP ratio.

4)The bigger question is -are the States aware of these Risks.They cannot wash off their hands by blaming the Centre.They have an equal responsibilty if not a higher responsibility on fiscal prudence.Why not SC take up freebies issue on suo motu basis and declare any further freebies must be linked to additional mobilisation of resources and not through borrowings.

See the Uncertainty Index of US to understand the increase in Uncertainty and Risks

Tariff wars and its effect on Inflation & Economy

 Economists and the Federal Reserve (Fed) anticipate that increased tariffs, particularly those imposed by the Trump administration, are likely to push up inflation in the United States, at least temporarily, as businesses pass on the cost of tariffs to consumers. 

Here's a more detailed explanation:

•       Why Tariffs Raise Prices:

  Tariffs are essentially taxes on imported goods, and when businesses face higher costs due to tariffs, they often respond by raising prices for consumers to maintain their profit margins. 
• Impact on Inflation:
• The increased prices due to tariffs contribute to higher inflation, as the overall cost of goods and services in the economy rises. 
• Fed's Perspective:
• The Federal Reserve has acknowledged that tariffs are a factor in its elevated inflation forecast for 2025, and that progress in taming inflation may be delayed. 
• Potential for a One-Time Increase-Short term or Long term:
• Some economists believe that the impact of tariffs on inflation may be a one-time price increase, rather than a sustained increase, but that depends on how long the tariffs remain in place and whether they lead to a trade war. While some economists suggest that tariff-induced price increases may be temporary, lasting inflation could occur if tariffs are maintained or if consumers and businesses adjust to the new price levels, leading to wage increases and further price hikes.
• Concerns about Trade War:
• The possibility of a trade war, where multiple countries impose tariffs on each other, is a major concern, as it could lead to a more sustained increase in inflation.
• Impact on Consumer Prices:
• Consumers will likely see higher prices for goods that are either directly imported or contain imported components, as the costs of these goods are passed on to them.When tariffs are imposed, domestic producers may raise their prices, not only for imported goods but also for domestically produced goods that compete with the imported items. This can lead to generalized price increases across various sectors and inflation can become entrenched which may lead to the following:

• 1. Higher prices might lead consumers to alter their purchasing habits, potentially opting for cheaper alternatives, which may indirectly impact domestic industries.

  2. The combination of higher prices and potential reduced consumer spending may slow economic growth. Businesses may also delay investments due to uncertainty surrounding trade policies.
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• Examples of Tariffs:
• The tariffs in question include those on steel, aluminum, and other goods, as well as the potential for further tariffs on Chinese imports. Certain sectors may be more affected than others. Industries reliant on imported materials (like steel and aluminum) could see heightened costs, influencing the prices of consumer goods such as construction services, automobiles, and electronics.
• Impact on the Economy:
• Besides inflation, tariffs could also lead to a slowdown in economic growth, as businesses become less competitive and consumers have less disposable income. 
• Fed's Response:
• The Fed may need to adjust its monetary policy to combat the inflationary effects of tariffs, potentially by raising interest rates, but it is also bracing for a hit to growth

India's Economic Growth and Outlook and the Challenges lying ahead

 India's Economic Growth and Outlook:

The highlight of India's robust economic performance, with GDP growth reaching 6.2% in Q3 FY25, is the significant rebound from the 5.6% low in Q2 FY25. This positive trend is attributed to strong growth in agriculture and manufacturing. The FY25 GDP growth is estimated at 6.5%, projecting a 7.6% growth for Q4 FY25, although revisions are anticipated in May 2025. The real GDP growth rate for 2023-24 (9.2%) is the highest in twelve years, second only to the exceptional 9.7% growth seen in FY22. Significant upward revisions to past growth figures reinforce the economy's resilience.

Sectoral Performance:

• Agriculture: The sector showed strong growth (5.6% in Q3 FY25) due to a favorable monsoon and improved farm output. FY25 growth is projected at 4.6%.
• Industry: The industrial sector also rebounded, growing by 4.5% in Q3 FY25, mainly driven by manufacturing. FY25 growth is estimated at 5.6%.
• Services: The services sector demonstrated strong performance, with growth exceeding 7% in several sub-sectors. Overall services sector growth in Q3 FY25 reached 7.4%, while FY25 growth is projected at 7.3%.
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Fiscal Indicators:

Revisions in nominal GDP figures (FY24 by 245 bps and FY25 by 16 bps) will lead to adjustments in the fiscal deficit, which is now estimated at 5.5% for FY24 and 4.7% for FY25. Per capita GDP has reached ₹2.35 lakh in FY25, exhibiting strong decadal growth.

Demand and Expenditure:

Private final consumption expenditure (PFCE) is expected to grow by 7.6% in FY25, propelled by increased spending on health, services, and education. Government expenditure growth has slowed due to fiscal consolidation efforts. Capital formation is projected to grow by 6.1% in FY25, and a weakening rupee has positively impacted export growth.

Savings and Investment:

India's savings rate stands at 30.7% of GDP in FY24, exceeding the global average. While the overall savings rate is healthy, there's some concern regarding the deceleration in gross capital formation and private sector investment. Public sector investment, however, has reached a record high.

Credit Growth:

Credit growth continues to be positive, showing strong momentum in various sectors, particularly in the industrial sector.

Overall Assessment:

We note a generally positive outlook for the Indian economy, emphasizing the need for increased private sector investment to sustain future growth. While the current economic indicators are encouraging, we need to stress the need for continued policy support and monitoring of key indicators.

India's economic growth trajectory and the factors influencing it. After a remarkable 8.2% GDP growth in the previous fiscal year, India's growth is moderating to its trend rate of 6.5-7%, a slowdown anticipated due to lower fiscal impulse, elevated interest rates, and tighter lending.

A temporary dip in the second quarter of 2024-25 is attributed to lower-than-expected government spending due to elections and weather impacts. While a full recovery is expected in the second half of the year, the overall growth for the fiscal year will be lower than initially projected. The Reserve Bank of India forecasts 6.6%, acknowledging potential downside.

Despite the near-term slowdown, the medium-term outlook remains positive, with some agencies estimating an average annual growth of 6.7% until the end of the decade. This is driven by three key factors:

1. Capital Investment: Government infrastructure projects and household investments are fueling growth, with infrastructure development seen as crucial for long-term economic enhancement. While the government's push has been effective, private corporate investment needs to increase significantly to reach full potential.

2. Labour Productivity: Improvements in education, job opportunities, infrastructure, digitalization, and economic reforms (like the GST) are expected to enhance productivity. Digitalization, in particular, is seen as a key driver due to its less capital-intensive nature.

3. Labour Participation: While female labour force participation has improved, it remains low compared to other nations, potentially limiting growth.

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Several challenges that lie ahead:

• Energy Transition: India's efforts to balance high growth with decarbonization and energy security are crucial. Technological advancements are necessary for a swift transition.
• Geopolitical Uncertainty: Climate change, tariff wars, and protectionist policies are significant risks, particularly given the potential for renewed trade tensions between the US and China.
• Inflation: High food inflation, particularly impacting vegetable prices, poses a challenge to the monetary policy committee's efforts to manage headline inflation. Intense heat waves have also negatively affected microfinance collections.
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While India's economic prospects are generally positive in the medium to long term, navigating the challenges of energy transition, geopolitical uncertainties, and inflation will require skillful policymaking and continued focus on boosting private sector investments. What is to be emphasized is that with so many factors at play, policymakers need to remain ever vigilant.

World Women's Day-The Heart (the seat of Mahalakshmi) in the Context of Sri Vaishnavism

The Interplay of Heart and Mind in the Context of Sri Vaishnavism

In the rich tapestry of Hindu philosophy, particularly within the Sri Vaishnavism tradition, the conceptualization of divinity and the human experience intertwines through profound symbolism and metaphysical understanding. The imagery of Mahalakshmi, the Divine Consort of Lord Vishnu (Sriman Narayanan), residing in His chest is emblematic of divine grace and the virtues of love, kindness, and compassion that permeate creation. This symbolism invites us to explore the relationship between the heart—often viewed as the seat of softer feelings—and the mind, the rational faculty responsible for discerning right from wrong.

The heart, in Vedic scriptures, is not merely an anatomical entity; it embodies the emotional essence of beings.Similar to our hearts supplying warm blood to the Brain, Mahalakshmi Thayar from the Heart of the Lord passes on Her Grace to the Brain which through the Supreme Consciousness/Mind controls the Body/Universe including the Heart. The Atharva Veda refers to the heart as the “hridaya,” a sacred space where emotions such as love and compassion thrive. Here, the heart is seen as the center of our spiritual existence, resonating with the vibrational frequency of love, which can dissolve the barriers of ego and separation. Shrimad Bhagavatam, a crucial text in Vaishnavism, emphasizes the transformative power of love through devotion (bhakti), where the devotee’s heart becomes a vessel for divine grace.

In a similar vein, the brain, which represents the cognitive and rational aspects of our being, holds the role of decision-making and discernment. In the Bhagavad Gita, Lord Krishna imparts wisdom to Arjuna, emphasizing the importance of knowledge (jnana) in making righteous choices. However, while the mind advises based on logic and analysis, it is often the heart that gives meaning and purpose to such decisions. Thus, the heart and mind must work in harmony to navigate the complexities of life.

This interdependence is beautifully captured in the Vedic principle of "Dharma," or righteousness. The understanding of dharma requires not only intellectual engagement but also an intuitive connection to the heart's wisdom. The Mahabharata, another significant scripture, illustrates this interplay vividly through the character of Dharmaraja Yudhishthira, whose righteous actions stem from a deep understanding of both ethical principles and emotional intelligence.

When knowledge is infused with the qualities of love and compassion, it transcends into wisdom. The Upanishads, which delve into the nature of reality and the self, proclaim that true knowledge aligns itself with the principles of love. When we act with compassion, we elevate our consciousness and align ourselves with the divine will, thus experiencing a deeper connection to both humanity and the cosmos.

In Sri Vaishnavism, the ultimate goal is to achieve a state of union with the divine, which is symbolically represented by the merging of individual consciousness (jivatma) with supreme consciousness (paramatma). This union is facilitated by cultivating an open heart—a heart that embodies the qualities of Mahalakshmi and expresses love and kindness toward all beings. In his teachings, Vedanta Deśika, a revered Sri Vaishnava philosopher, stresses that the grace of the Lord manifests in layers of devotion that purify both the heart and mind, fostering a holistic understanding of one’s duty in the world.

In the context of Sri Vaishnavism, "Purushakaram" refers to the concept of a divine intermediary or facilitator, particularly in the process of devotion and liberation (moksha). The term combines two elements: "Purusha," meaning a person or being, and "Kara," meaning doer or one who acts.

Significance of Purushakaram in Sri Vaishnavism

1. Divine Intercession: In Sri Vaishnavism, Purushakaram is often associated with the role of divine beings such as the Acharyas, the spiritual teachers, and intermediaries that connect devotees to God (Vishnu). They guide the devotees on the path of righteousness and devotion, helping to remove obstacles in the pursuit of spiritual goals.

2. Role of Mahalakshmi: In many interpretations, Purushakaram can also refer to Mahalakshmi, who is considered the divine energy that enables the devotion of the devotees to reach the Lord. As the embodiment of grace and abundance, she plays a crucial role in facilitating the process of devotion and the attainment of moksha.

3. Bhakti and Grace: The concept emphasizes that while human effort (Purusha) is essential in the path of bhakti (devotion), divine grace is what ultimately leads to salvation. It highlights the interplay between self-effort and the reliance on divine will.

4. Philosophical Underpinnings: Purushakaram reflects the core philosophical teaching of Sri Vaishnavism that while individuals must strive to cultivate devotion and righteousness, they should also seek the grace of God through surrender and humility.

Therefore, Purushakaram in Sri Vaishnavism signifies the importance of divine intermediaries and the necessity of divine grace coupled with human effort on the spiritual path. It encapsulates the relationship between the devotee and the divine, emphasizing a balanced approach to spiritual practice.

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Regenerate

The imagery of Mahalakshmi (Purushakaram)residing in the chest(is that why Treasure is kept in Treasure Chest?!!) of Sriman Narayanan encapsulates the interplay between heart and mind, highlighting that knowledge and wisdom flourish when nurtured by love and compassion. As Vedic scriptures illuminate, a life guided by this harmonious relationship leads to a deeper understanding of dharma and fosters a more profound connection with the divine. As we aspire to embody these virtues, we engage in the eternal dance of existence, where the heart’s grace illuminates the mind’s path, ultimately guiding us toward spiritual fulfilment and collective upliftment.

Three Language Formula and TN Politics

 The purpose of "Three Language Formula" under the New Education Policy has been framed as "an enabling provision".

In the noise created to arouse passions In the name of safeguarding our mother tongue, even the so called educated fail to appreciate that " three language fomula" is an enabling provision for students to choose any third language- no compulsion to choose Hindi. Moreover when Education is a fundamental right,my children should enjoy the freedom to choose ,learn, understand, and equip themselves in any language they choose and " three language formula" enables them- it is not disabling any child- only two language formula is crippling them.

 Three language formula is both a burden and an opportunity. The formula is " an enabler" . For those who see this as an Opportunity, those children may learn any third language. Somebody said v have 22 languages will u teach all? Based on student's interests they may choose a language and learn. Students in CBSE schools learn Hindi and in some Govt schools they learn Urdu- Similarly it can be Malayalam, or Telugu or Kannada also depending upon the choices available. Education being fundamental right, every child will have to get an opportunity to learn a third language and what is wrong in that?

Three language formula is an enabling feature and it does not impose Hindi alone. Students can choose whatever 3rd language they want to learn.if children learn 3rd language why should DMK stop them making a value judgment. Is Education including learning a language not a fundamental right of a child - a citizen?!!

First of all, there is no compulsion to learn Hindi nor is there any imposition of hindi- third language is "an enabling driver" which is an opportunity for some to learn a new language- be it Telugu, Malayalam or Kannada etc - schools bordering the States of Andhra,Kerala,and Karnataka respectively may use this provision. Already in some Govt schools Urdu etc r taught. Moreover DMK ministers run private CBSE schools that have this privilege of teaching Hindi.The question is why not extend this to all Govt schools that can reach  the underprivileged ?those who see an opportunity can learn a third language. Nobody is talking of imposition.

If you love videshi and hate swadeshi ,then there is a serious problem in your psyche.Centre is not imposing but it is a call for improving our communication within the country.English speaking Indians r bare minimum whereas Hindi speaking r vast majority. Language is 4 communication

 Whenever DMK as part of ruling dispensation faces stiff Opposition and grave Corruption accusation, poor Governance, deteriorating Law & order issues, they divert attention thro such tactics like raking up Hindi imposition raising the peoples' passion & sons of the soil rhetorics.Since Annamalai of BJP and Actor Vijay r viewed as a serious threat to their electoral prospects , they r indulging in such cheap theatrics.

Now when they have failed to arouse the emotions , they have changed the tactics to Sanskrit hate and crying foul that Sanskrit entry thro back door is facilitated under three language formula.So clearly the Sanatan Dharm hate mongering is out and unmasked!DMK's first family do all pujas invoking Sanskrit mantras thro Vedic Sanskrit pundits but in public they denounce Sanskrit and Sanatan Dharm- clearly Orwell's "Doublethink" and doublespeak at public display!!