Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Friday, April 27, 2018 12:45:55 PM
Follow Us On: Facebook Twitter Twitter Twitter Twitter

Indian traders choking on Modi's economic medicine

By
12th-Oct-2017       
Comments
Share your thought
Post a comment »
Read all () »

AFP, Ludhiana :
Tax overhauls and black market clampdowns have been touted as radical medicine to modernise India's economy, but for small traders like Swarn Singh Darera, "Modinomics" has been a bitter pill to swallow.
At his factory in the northern Punjab city of Ludhiana, Sikh businessman Darera is keeping staff on for 12-hour shifts but only has enough work coming in to justify a third of that time.
He blames one man for his predicament: Prime Minister Narendra Modi.
"The government finished us," he said angrily. "These people sitting in their air-conditioned offices have no idea what's happening on the ground."
Over the past year Modi has rolled out controversial, but many argue much-needed, flagship reforms-often dubbed "Modinomics"-designed to streamline Asia's third-largest economy and root out corruption.
In November his government cancelled more than 80 percent of the rupee banknotes in circulation in a bid to clampdown on the black market.
Eight months later it followed up with a massive sales tax overhaul- replacing more than a dozen state and national levies with four different rates of between five and 28 per cent.
Economists had long argued such steps were vital if the country of 1.3 billion people is to continue creating jobs for its ever-growing population.
But small traders-who account for a third of the $2 trillion economy- have been hit particularly hard.
In Darera's shop, a box of axles worth 500,000 rupees ($7,500) spent weeks on the shop floor when the buyer initially balked because the sales tax for the equipment leapt from two to 12 percent when the July reforms came in.
"What are these crazy people doing?" Darera said of the government's tax reforms.
The rupee note withdrawal had already wiped out most of his cash reserves, he said, adding that he was keeping staff on because he didn't want to lose skilled workers.
The government says the initial pain of its economic reforms will bear fruit down the line.
But analysts warn it could take months for the benefits to show, a potential headache for Modi, who faces a national election in less than two years and key state elections sooner.
"The economy is not doing well at all," Credit Suisse managing director Neelkanth Mishra told AFP.
"We are in a period of deep uncertainty. It's like playing cricket on a bad pitch. You can't plan it."
India's economic growth slowed to a three-year low of 5.7 percent in the first quarter. The Asian Development Bank has lowered its 2017 growth forecast to seven percent from 7.4 percent in July.
In an admission that its policies might be hurting India's influential traders, the government on Friday announced a series of changes to the tax law designed to ease the burden on small and medium businesses.
But in Ludhiana-home to thousands of small factories making cycles and parts, shawls, textiles and sewing machines-companies say they are hurting.
"We're feeling very insecure," Arun Aggarwal, a leader of Ludhiana's knitwear association, told AFP.
"It's about the business environment. You're threatening traders, calling them thieves, there's a constant threat of prosecution for any perceived digression," he added.
The nearby Thapar Hosiery Mills is battling with the introduction of taxes -- five or 12 percent-on textiles for the first time and well as new compliance burdens.
There have been lower sales and higher job losses while manipulation is creeping in as buyers insist that companies bill their products at a lower tax rate.
Thapar has laid off 75 of its 100 workers with rows of sewing machines now silent. A handful of men were at work, sewing red and blue sweatshirts for Zara Man.
"Our system of work is more than 100 years old," said managing director Vinod Thapar.
"At least come here and try and understand how our business works before declaring us all thieves trying to evade taxes," was his message to the government.
Pappu Kumar, a Thapar employee, has seen his monthly salary halved to 7,000 rupees.
He has halted English classes for his six-year-old daughter and cut back on expensive foods like paneer cheese.
"Everything is dependent on my salary," Kumar said. "So if that is half, we have to cut back on everything else to survive."
Independent embroidery worker Mohammad Arshi said he had to send his family back to their village in Bihar state in August.
After the July tax reforms, embroidery was taxed at 18 percent, pricing him out of several contracts.
The new measures announced Friday reduced that rate to five percent but Arshi said it was too little too late for this year.

Tariff
Add Rate

News Archive

Inside The New Nation

Editorial »

Corruption becomes organisational


THE investigation teams of Anti-Corruption Commission (ACC) have got evidence about large-scale financial corruptions in 10 government organizations where the Roads and Highways Department topped the list. Second and third positions have been acquired by education and health sectors consecutively. Others are Land, Public Works Department, Chattogram Port Authority, Land ...

Sports »

Bangladesh Army Area Commander Headquarter logistic area Mejor General Ataul Hakim Sarwar Hasan giving away champoins trophy to the Tenth Infantry Division of Bangladesh Army team,who became Champions of the Bangladesh Army Watersports at Army Swimming Complex at Banani in the city on Thursday.


Entertainment »

Ankhi Alamgir busy with stage shows


Entertainment Report :Ankhi Alamgir is such a popular singer who has to be engaged with stage shows round the year at home and abroad. On April 14, 15 and 19 she took part in three countries - Paris, Vienna and Oman respectively with the invitation from expatriate Bangladeshis there. After ...

City »

BNP Secretary General Mirza Fakhrul Islam Alamgir, among others, at a discussion organised by `Sammilita Bouddha Nagorik` at the Jatiya Press Club on Thursday demanding release of the party Chairperson Begum Khaleda Zia.


Weekend Plus »

Myths, tips for healthy hair in summer


Weekend Plus Desk :Summer can bring in several hair woes. From using right serum to brushing in a proper way, experts say there are easy ways to tame your mane.Arpit Jain, founder and Managing Director of Auraine Botanicals, suggests tips to keep your hair healthy:* Hair serum: Always apply hair ...

International »

India-China summit expected to ease tensions over border


AP, New Delhi :Indian Prime Minister Narendra Modi is meeting this week with Chinese President Xi Jinping, a visit that some experts believe could reset a complicated relationship that faced several tests last year, including a tense border standoff.The meeting between the leaders of the world's two most populous nations ...

Editorial »

Stop women harassment on running buses


A DHAKA court on Tuesday placed three staffers including driver of a Turag Paribahan bus in a case filed over sexually harassing a private university female student in the running bus on her way to campus. According to the case statement, on April 21, the girl boarded the bus on ...

International »

Trump, Russia and China media attacks `threaten democracy`


AFP, Paris :Press freedom around the world is under threat from a triple whammy of US President Donald Trump, Russia and China's bid to crush all dissent, a watchdog said Wednesday.Reporters Without Borders (RSF) warned that a "climate of hatred and animosity" towards journalists combined with growing attempts to control ...

Football »

Liverpool`s Mohamed Salah celebrates with teammates after scoring his side's opening goal during the Champions League semifinal, first leg, soccer match between Liverpool and Roma at Anfield Stadium in Liverpool, England on Tuesday.


Entertainment »

Yami hopes to help kids, one book at a time


Yami Gautam, actress of the upcoming Batti Gul and Uri posted on her social media that she has just supported and donated towards setting up a library for under privileged kids in Kohlapur, Maharashtra. Her donation will help over 400 children in the area to read, learn and imagine. The ...

City »

Human rights activist Dr Hamida Hossain, among others, at a seminar on 'Socio-economic Development of Dalit Women in Bangladesh and National Budget' organised by different organisations in CIRDAP Auditorium in the city on Wednesday.


Football »

Members of Dhaka Abahani Limited during their practice session at the Abahani Ground on Tuesday.


Sports »

Senior Operative Director (Head of Games & Sports Department) of Walton Group FM Iqbal Bin Anwar Dawn (second from left) speaking at a press conference at the Club House in Army Golf Club on Tuesday.


Entertainment »

Sonam to quit Bollywood!


Sonam Kapoor's wedding has been one of the most talked about topics of discussion in the industry. A lot of speculations are being made about Sonam-Anand's wedding. Recent reports suggested that Sonam will be shifting to London post her wedding with Anand.These speculations even gave rise to rumours that Sonam ...

Editorial »

Police must not feel free to abuse police power against police discipline


A MOTORCYCLE was stolen from in front of a high police official's residence last week. Motorbikes are the easiest target for thieves. They either stealthily take away the bikes or stop the riders at night and snatch away their bikes. Sometimes, the bikers are knifed or beaten up. Last year, ...

 
Items that you save may be read at any time on your computer, iPad, iPhone or Android devices.
 
Are you new to our website? Do you have already an account at our website?
Create An Account Log in here
Email this news to a friend or like someone
Email:
Write a comment to this news