Khirkee Voice (Issue 4) English

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KHIRKEE VOICE

FALL EDITION

ISSUE #4

German Economist impressed with local economy

SEPTEMBER - NOVEMBER 2017

DELHI, INDIA

SPECIAL ISSUE ON LOCAL ECONOMIES

The Soul of the Smart City

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S E A S O N A L REPORT

12 PAGES

A new way of learning with Aagaaz

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“ONE NATION, ONE TAX”

WARM & HUMID, COOLER BY THE END OF NOVEMBER

DEMERARA, GUYANA

WARM, MOSTLY SUNNY, WITH OCCASSIONAL LIGHT SHOWERS

HEIDELBERG, GERMANY

PARTIAL SUNSHINE, OVERCAST, COLD AND RAINY BY NOVEMBER

Workers from one of Khirkee’s many recycling shops make light of their difficult financial state

Mahavir Singh Bisht

KABUL, AFGHANISTAN

O LAGOS, NIGERIA

WARM, PARTIALLY SUNNY, OCCASSIONAL SHOWERS

MOGADISHU, SOMALIA

WARM, PARTIALLY SUNNY, OCCASSIONAL SHOWERS

illustrations: anarya

PATNA, INDIA

LIGHT RAINS, SUNNY, GRADUAL DECREASE IN TEMPERATURE

Gagan Singh’s intuitive drawing process

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LOCAL BUSINESSES GRAPPLE WITH

photograph: mahavir singh bisht

MOSTLY SUNNY AND WARM, COOLS DOWN IN NOVEMBER

Supported by

ne often hears people refer to Narendra Modi as an inimitable leader who works tirelessly to achieve what he sets his mind to. Under his leadership, the central government recently introduced the GST bill, with the slogan ‘one nation, one tax’. While many have called this a ‘revolutionary bill’, there are others who are trying to figure what this bizarre tax is? The government claims that this will improve ease of doing business. We spoke to a few people from the community who run small and medium-sized enterprises in Khirkee to try and understand how the bill has impacted them. Khirkee is an urban village with a proliferation of small businesses like general stores, chemists, electrical, clothing and convenience shops. Majority of these shops are part of the informal sector. One of the objectives of the GST has been the mainstreaming of this sector. But while it is one thing to pass the bill, implementation poses many challenges. In a country as complex as India, it is problematic to impose a single bill that views everyone from a single perspective. There are many contradictions in the GST. First, before the tax was

implemented, it was thought that all goods and services would be taxed at the same rate in order to make it easier to understand and implement. However there are four slabs5%, 12%, 18% and 28% respectively. It was thought that 28% tax would only apply to luxury goods but it is in fact being imposed on basic necessities. It is also difficult to determine which slab certain items fall under. We spoke to SK Verma of Verma Medicos at J Block in Khirkee. He says the arrival of the GST in the aftermath of demonetization has proved to be a double whammy. “We’ve barely recovered after demonetization and now we have to struggle to understand this new tax.” He says that imposing a tax without adequate preparation/notice reduces the supply from dealers. “We sell

essential items like medicines but if we don’t get our supply of items then what are we to sell to the customers? People are having to go back empty- handed.” The rise in prices of second-class medicines has also meant a shortage in the supply of branded drugs. When we told him that its widely believed that this tax has many benefits, he immediately responded that it is hard to gauge them at the moment. It has been stated that this tax will benefit the poor. If everyday necessities like oil, soap etc. has a tax of 18% to 28% and items like cashews, pistachios and almonds have 5% tax, it is difficult to speculate how this is to benefit the poor. It will take time for those running small and medium sized enterprises to understand the nuances of the tax and it will also rob them of their marginal profits. This will also impact lower and middle class customers. Tanvir Ahmad who runs an electrical shop at Hauz Rani speaks of how he has been affected “There is a 28% tax on all electrical items. If purchasing is going to be so expensive then what are we supposed to sell? How will we earn? With the sudden arrival of this tax, getting rid of the old stock is a headache. Also, there will now be an added expense for maintaining accounts. I’ll have to hire at least one person to operate

As profit margins shrink across the neighborhood, humor and cameraderie alleviate some of the daily struggles and confusion of coming to grips with the recently implemented GST bill. a computer for that. The rise in operating costs will directly slash our profits.” He also insists that this tax will leave the big businessman completely unaffected. This leaves us with the question if this tax is only for the big businessmen? What kind of planning is this where the smallest businessman and the poorest customers are the only losers? We then met Ashwini Ji who runs a jewelry shop in the lane beside Hauz Rani. He said that the government should focus on increasing business as opposed to increasing taxes. “If taxes are lowered, the smaller informal businesses will automatically comply with the law.” It seems like the middle class businessmen of our country are perhaps a bit wiser than our policy makers. Instead of making the new tax simpler, the government has only presented the old tax in a new guise. CA Gulshan Sharma agrees that the most affected will be small-scale businesses, trying to understand and comply with the GST. “There will be a fall in their sales and there will be additional expenditure on bookkeeping.” it offers no assurance or guarantees for the small businessmen. It will be a while before they can understand the inconveniences and benefits that result from it.


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