An elephant called GST

K. Raveendran

India’s IT power has evolved into its current pre-eminence because the government, meaning bureaucracy, could not do anything to stop it despite their best efforts. The government and the bureaucracy had virtually no clue as to what was happening. Otherwise they would have stalled it through various means, including labour-related and administrative issues. By the time they realised the reality, technology had grown beyond them, although they have not given up the bid to overwhelm it through regulations. Essentially, government, or more realistically the bureaucracy, and technology are the perfect antithesis of each other. There is so much of difference in their respective approaches.
Software engineers by nature are ‘boring people’ who live in a world of their own, where there are only events, conditions and their results. They eat, drink and breathe software. At the same time, they are most creative when it comes to their profession. Commonsense and logic are their domains and they hack their own work to eliminate unintended results. Contrast this with the approach of the bureaucrats, who simply love whatever they do and hate to see their work criticised. They would rather have the world revolve around them and their airs. Bureaucracy cannot be more adamant when they realise that events are overtaking them and these are not to their liking. As a result of this mindset, its members often fail to see beyond their nose.
Take for instance the case of demonetisation and GST. Had they been truthful to their responsibility, and the privileges that their job accorded them, both would have taken different courses altogether. Demonetisation may be a slightly different proposition as the bureaucracy was mostly sidestepped in the whole process; to the extent to which it was involved, we have instances of people like former RBI governor Raghuram Rajan opposing it as impractical. For argument sake one can say that the bureaucracy was involved only at the implementation stage, which was anyway bungled and was probably destined to be so in view of the basic fallacy of the idea.
But the haphazard manner in which the GST rollout has taken place smacks of foolhardiness, and outright arrogance, the midnight ‘riff-raff’ launch included. It was clearly a miss-step taken before its time. Who couldn’t have imagined, except an inept and time-serving bureaucracy, that the small window of time allowed for the registration for GST, especially the huge number of small and medium businesses, would challenge the capacity of the infrastructure available for such a massive operation?
At the drop of a hat we go to Facebook and other social media platforms to share our thoughts, moods and what not, but little do we realise the gigantic operation that makes all this possible. Facebook, with a membership exceeding a billion, handling around 2.4 billion pieces of content and 750TB of data every day, has spent over $3 billion to power its network infrastructure, according to available information. Amazon has over 450,000 servers in its seven data centres located across the world, storing about 40 billion objects, with around 17 million monthly visitors accessing 410TB of data from its platform on its cloud servers alone. Such infrastructure does not get built overnight and is the result of years of pain-staking planning, investment and hard work.
Leaving the technical issues apart, the bureaucracy has failed to think through even the most basic issues of GST before embarking on this misadventure. Quite unlike the software people, our bureaucracy seems to have developed a genetic disorder that prevents them from seeing the obvious. The much-hackneyed saying commonsense is not so common is not more true for anything as it is for our bureaucracy.
It is such predicament that forced Prime Minister Narendra Modi to assure the people that the government will not hesitate to take corrective measures after watching the results of GST implementation for three months. Is this the only way we can ascertain the practicality of a measure?
Revenue Secretary Hasmukh Adhia, who has been the defender-in-chief of the government’s GST plan, has now no qualms in saying that that some rejig in the rate structure may be required to reduce the burden on small and medium businesses.
“There is need for some rejig in rates … it is possible that some items in the same chapter are divided. There is a need for harmonisation of items chapter wise, and wherever we find there is a big burden on small and medium businesses and on the common man, if we bring them down, there will be a better compliance,” Adhia told different media outfits in separate interviews.
But compared to the dead hurry in which the GST regime was rolled out, he is more liberal with the time frame for the review. If everything goes well, it will take only one year, he avers. “Because it is a new system for everybody… There has been a complete overhauling of tax system in GST so one year is needed.”
It is indeed sad that in the era of big data and new analytical tools and models, which are redefining the operations of the world’s leading companies and establishments and creating new opportunities, we are still groping in the dark like the proverbial elephant and the blind men. (IPA)

Friday, 3 November, 2017