Welcome to letsstudytogether.co, as we all know that now a day’s in All Banking Exams and other competitive exams most of the English Sections were taken from Editorial pages. So it is essential to have a sound knowledge and understanding of English vocabulary. So here we are presenting you THE Hindu Editorial with Vocabulary from THE HINDU newspapers. This will help you to sail and score good marks in English Language section.
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The GST train chugs along
In about a month, India’s new indirect tax system will be rolled out. It has been described as the biggest reform in indirect taxes. India now joins some 160 other countries that already have a Goods and Services Tax (GST). The only large economy exception without a GST is the United States. Most other countries have this consumption tax as a key component of their indirect taxes.
In a nutshell
Here are the key features of the GST. First, it moves the tax system from production to consumption. It covers the gross domestic product (GDP) more comprehensively. Because the tax base is now a much wider set of transactions, hopefully the per capita tax incidence will be lower. Second, it eliminates a major bane of cascading (arrange (a number of devices or objects) in a series or sequence.), i.e. having to pay tax on tax. It will thus increase efficiency of taxation. Third, the GST has interlocking incentives for compliance, because your tax incidence, and refund, depends on production of proof of tax paid by your supplier. The paperwork, or rather the computer records, is interlinked in a chain. No one person in the chain can evade tax because it hurts either his vendor or customer. In that respect, the GST’s interlocked incentives look similar to Grameen Bank’s joint liability lending in microfinance. Micro loans are given without any collateral, but if one person defaults, the entire group is blacklisted. This ensures an almost 100% repayment rate. Similarly, the GST too has interlinked incentives for the whole value chain. For these three reasons and many more, the GST is expected to bring many benefits to the economy. These are higher GDP growth, lower inflation, buoyant tax collections, wider coverage and less tax evasion, and, most importantly, a truly common economic market across the country. Indeed the slogan for promoting the GST was “One Country One Tax”.
The roll-out of this historic reform required amending the Constitution, legislative action in Parliament as well as State legislatures, setting up of the GST Council and deciding on the applicable tax rates on more than 1,200 items. Much of this work is already done. Indeed this achievement is itself a heroic example of consensus-building across States and political parties. The implementation will quite likely involve many hiccups (हिचकी लेना ), delays, and computer glitches, but the GST train has left the station and is chugging along (साथ में चलाना).
Some fault lines
Let’s examine what the status of the GST is as it takes birth, and how successful it will be able to fulfil the expectations thrust on it. The origins of the GST go back almost two decades and are also found in the reports of the Kelkar Committee on Tax Reforms, written at the turn of this century. The basic premise of tax reforms then and now is to aim for lower rates, simpler code and eliminate exemptions. On all these three goals we have much distance to travel.
First, with five slabs of 0%, 5%, 12%, 18%, 28% plus cess, we have increased the chance of classification disputes, discretion and litigation. The high rates encourage tax evasion, distort decisions, and promote wasteful resources into tax avoidance. As the GST Task Force of the Thirteenth Finance Commission has said, multiple rate slabs exacerbate the problem of bracket creep and classification disputes. A rational tax system should have very few rates and low rates. Indeed, before the introduction of this GST, the service tax had just one rate, that was 15%, applicable to all services. We now have multiple rates and the chances of disputes and legal battles have increased. Multiple rates are attractive politically. Items consumed by the poor are taxed at low rates and luxury goods are taxed at higher rates. But this classification itself is problematic especially in a diverse, fast-evolving economy. For instance, perfumed hair oil may be a luxury item in Bihar but not in Tamil Nadu. Rubber slippers are worn by the poor, but also the rich at beach resorts. There is also a quality continuum (अबाध क्रम – a continuous sequence in which adjacent elements are not perceptibly different from each other, although the extremes are quite distinct.), and from unbranded to branded. Furthermore, today’s poor may be tomorrow’s rich, so there is an aspirational class too. It is far too complex to classify goods rigidly as those consumed by the poor and the rich distinctly.
But multiple rates increase cost and complexity. As the task force also pointed out, the cost of auditing the classification of exempt, low rate and high rate slabs across every stage of production, distribution and consumption is very high. Single or few rates are easy to comply with and involve much lower disputes. Multiple rates have been introduced so as to soften the blow of inflation. By keeping most of the goods consumed by the poor (as identified by their consumption basket), the hope is that inflation will be in check.
Which leads us to the second question? Will inflation remain in control? Since almost 60% of India’s GDP is from services, and the rate is moving from 15 to higher, it is quite likely that inflation will inch up. This is especially evident in the financial, telecom, hospitality and trade services. Of course, to the extent that service providers will now get input tax credit, which they might pass on to their customers, inflation may not rise by much. Since the IT systems are not fully in place and refunds are not instantaneous, the benefit of tax credit will be delayed. This cost of delay and consequent cost of working capital too introduces an inflationary element.
It was hoped that not many items would be in the 28% bracket, failing which inflation will be higher. The tax burden on industry is coming down in the GST. This is because currently, excise plus State VAT adds up to more than 25%, which will definitely go down. Since inflation in India is currently moderate — indeed this has been a major achievement of the NDA government — the impact of the GST, even though inflationary, will still be modest. In the longer term, further price moderation is possible due to the supply side-effect of the GST.
Finally, a large part of the economy is still not covered by the GST. Potable alcohol, crude oil, natural gas, aviation fuel, diesel, petrol, electricity and real estate are currently out, and States will levy their own taxes on these. Taxes paid on these will not be able to be offset against the GST. To that extent it is an inflationary distortion. Hopefully, this lacuna in the GST will be fixed soon.
The high rates and multiple slabs reflect an outcome of a very complicated political compromise achieved in the GST Council. This required assuaging the fear of revenue loss to States which have just surrendered their tax autonomy. It required assuaging the fear of politicians about unleashing inflation.
The ideal of a low, single rate and comprehensive total GDP coverage, with a fully IT-enabled compliance system, is a destination still far away. But as Mr. Kelkar himself has said, the journey of a hundred miles must begin with the first step. To that extent this historic tax reform has come alive. Along the way it will be tweaked and modified a thousand times to eventually hit the right stride, for that is the genius of India’s democracy.
Magical Vocabulary from “The Hindu Editorial”
- Comprehensive (Adjective) व्यापक: complete; including all or nearly all elements or aspects of something
Synonyms: inclusive, all-inclusive, complete, thorough, full, extensive, all-embracing, exhaustive, detailed.
Example: Unbelievable in its comprehensive scope, the vast material supports a view of Africa as the archetypal artistic environment.
- Buoyant (Adjective) प्रसन्नचित्त / बहता हुआ: (of an economy, business, or market) involving or engaged in much activity./ cheerful and optimistic.
Synonyms: jolly, lively, jaunty, high-spirited, perky, optimistic, confident, positive, peppy.
Example: Unfortunately, the foam insulation inside the suit also makes divers more buoyant and even less able to swim downward.
- Discretion (Noun) विवेक / : the quality of behaving or speaking in such a way as to avoid causing offense or revealing private information.
Synonyms: circumspection, carefulness, caution, wariness, chariness, guardedness, tact
Example: The committee will use its discretion in deciding whether to grant permission or not.
- Exacerbate (Verb) ख़राब करना: make (a problem, bad situation, or negative feeling) worse.
Synonyms: aggravate, worsen, inflame, worsen, aggravate, exasperate.
Example: At least the government is trying to find an actual solution, rather than exacerbating the problem.
- Distinctly (Adverb) स्पष्ट रूप से: in a way that is readily distinguishable by the senses; clearly. Synonyms: decidedly, markedly, definitely, clearly, noticeably, obviously, plainly.
Example: These are patterns I interpret as distinctly negative in nature and in probable outcome
- Evident (Adjective) प्रत्यक्ष: plain or obvious; clearly seen or understood.
Synonyms: obvious, apparent, noticeable, conspicuous, perceptible, visible, discernible.
Example: It is evident there is an ongoing need for a local group campaigning in the cause of peace and justice.
- Instantaneous (Adjective) तात्कालिक: occurring or done in an instant or instantly.
Synonyms: immediate, instant, on-the-spot, prompt, swift, speedy, rapid, quick.
Example: This is because the travel time of light, although very rapid, is not instantaneous.
- Distortion (Noun) विरूपण / तोड़ना–मरोड़ना: the action of giving a misleading account or impression.
Synonyms: straining, twisting, torture, overrefinement
Example: The real challenge, then, is to be able to correct for distortion between the template and wafer.
- Lacuna (Noun) कमी / अभाव : an unfilled space or interval; a gap.
Synonyms: lack, reduction, decrease, shortage, deficiency.
Example: Rather, this gap must be seen as a serious lacuna in the surviving texts, a gulf that will critically limit our analysis.
- Assuage (Verb) शांत करना: make (an unpleasant feeling) less intense.
Synonyms: relieve, ease, alleviate, soothe, mitigate, allay, palliate, abate, suppress
Example: The point is, hunger and the desire to assuage it had little, if anything, to do with honoring or dishonoring God on the Sabbath.
Courtesy And Official editorial link :- The Hindu
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