- 4 months ago
Days after the bonhomie between Prime Minister Narendra Modi, Chinese President Xi Jinping and Russian President Vladimir Putin at the Shanghai Cooperation Organisation (SCO) summit in Tianjin, President Donald Trump said on Friday it looks like the US has lost India and Russia to "darkest" China.
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00:00Good evening, hello and welcome. You're with the news today. This is your primetime destination news, newsmakers, talking points, news without the noise.
00:10Friday night ahead of the weekend. Happy Onam to all of you out there and we've got plenty on the show.
00:17Talking point, is Donald Trump simply now getting more and more desperate? We'll tell you why we are saying this.
00:23Is the India-China-Russia dialogue now rattling him? Also, we'll be joined in an exclusive by the key figure of the original GST team.
00:33Former Chief Economic Advisor Arvind Subramaniam will break it down and answer all the big unanswered questions on the show tonight.
00:41But first, as always, it's time for the Nine Headlines at Nine.
00:45Days after the Modi-Zhi-Putin meet in China, Trump says, lost India and Russia to China.
00:55MEA lashes out his advisor Navarro over the Bremen profiteering demand.
01:00Finance Minister Nirmala Sitamaraman, in an exclusive on India Today, says GST reforms not due to the Trump tariffs, slams the Congress for calling GST a Gubbar Singh tax.
01:16Asked opposition to do their homework first.
01:22Flat situation continues to remain grim in Delhi.
01:25Yamuna water recedes, but still flowing well above the danger mark.
01:31Several areas near Yamuna Bank remain submerged.
01:36Punjab Chief Minister Bhagwan Maan's health condition worsens rush to a hospital in Mohali after huge fluctuations in his blood pressure.
01:45Maharashtra Deputy Chief Minister Ajit Pawar's heated exchange with a woman IPS officer who was allegedly taking action against illegal excavation of soil goes viral.
01:56Pawar clarifies, says, just ensuring situation remained calm.
02:03Judicial panel gives clean shit to Karnataka Chief Minister Sidhara Mahia and family in the Muda scam.
02:08The panel stated that the allegations had not been proven due to a lack of evidence.
02:15BJP versus Congress war of words intensifies over GST on BDs.
02:21BJP slams Congress over B for BD and Bihar post, accuses them of insulting Bihar.
02:26Kerala Congress's post is later deleted.
02:31Defence Minister unveils India's 15-year defence plan, centred on nuclear propulsion, AI, hypersonic technology and next-generation warfare.
02:40Kerala celebrates Onam with feast and tradition.
02:46The celebration marks the beginning of the new year for the people of Kerala.
02:49We wish all of them a very happy Onam.
02:52But first, our big story that's breaking this evening, the U.S. Commerce Secretary Howard Lutnik has now taken on India,
03:11the latest figure in the Trump administration to target India.
03:15Trump aide Lutnik saying India will say sorry in a couple of months.
03:20He says India should pick a side, says he wants India to move out of BRICS.
03:28Lutnik has said stop being part of BRICS, says eventually India will say sorry to Donald Trump and come to the negotiating table in a couple of months.
03:39So, clearly, the American administration, the Trump administration ratcheting up the pressure on India.
03:46Howard Lutnik, the latest, saying he wants India out of BRICS.
03:51Now, all of this coming on a day where U.S. President Donald Trump once again posted on Truth Social and I quote,
03:57it looks like we have lost India and Russia to deepest, darkest China.
04:03These comments coming soon after that meeting that took place in China between Prime Minister Modi, the Chinese President Xi and the Russian President Vladimir Putin.
04:14The comments mark Trump's sharpest public acknowledgement on the deepening ties between New Delhi, Moscow and Beijing.
04:21Clearly, all is not well. Why?
04:25Take a look first at our Big Top Story.
04:33The troika tango at Tianjin has made the U.S. uncomfortable.
04:39Days after the culmination of the SCO summit in China, U.S. President Donald Trump posted an old image of Prime Minister Modi
04:46along with presidents of Russia and China with a cryptic caption.
04:51He stated, and I quote,
04:54It seems we have lost India and Russia to deepest, darkest China.
04:59May they have a long and prosperous future together.
05:02Unquote.
05:04Donald Trump's post also comes in the backdrop of constant attacks by his trade advisor, Peter Navarro,
05:10who controversially alleged that Brahmins are profiteering from Russian oil at the expense of Indian people.
05:19Because India's high tariffs cost us jobs and factories and income and higher wages.
05:24And then the taxpayers lose because we got to fund Modi's war.
05:28OK, the road to peace runs at least partly right through New Delhi.
05:34The Ministry of External Affairs refrained from commenting on Donald Trump's post,
05:39but did not hold back from hitting back at Navarro.
05:42Regarding the post, I have no comments to offer on this post at this point.
05:49We have seen the inaccurate and misleading statements made by Mr. Navarro, and obviously we reject them.
05:59Significantly, the war of words broke out amid thinning hopes of a trade deal with the United States.
06:08The Ministry of External Affairs asserted that the ties have endured through multiple challenges
06:14and both countries remain focused on advancing bilateral agenda.
06:19We have a comprehensive global strategic partnership.
06:28India-US trade deal had hit a roadblock after Trump slapped 50% tariffs on India over purchase of Russian oil.
06:56But India still remains optimistic over the trade agreement with the US
07:02and is expecting to ink the deal by November this year.
07:08Bureau Report, India Today.
07:12So let's raise the big questions right at the top.
07:15Is Donald Trump now getting more and more desperate in this tariff war with India?
07:19India-China-Russia dialogue, is it really rattling the US?
07:23Are India-U.S. ties now on a dangerously slippery slope?
07:27Just some of the questions we'll raise.
07:29I'm joined by David K. Johnston, a Pulitzer Prize winning journalist and author of a book on Donald Trump.
07:35Appreciate your joining us there, Mr. Johnston.
07:38And Brahma Chalani, someone who's tracked strategic affairs for years, has very strong views, particularly on China.
07:45Appreciate both of you joining us.
07:47David, to you first there, just explain Donald Trump's mind.
07:51Yes, we know that he's unpredictable, but it's now reached the level where it has, it's bizarre beyond belief,
07:59the manner in which he's using truth social to conduct some kind of a public diplomacy war against India.
08:05Yeah, it wouldn't be surprising to the people who read my three bestselling books on Trump or the other book that's a half on Donald Trump.
08:15The important thing to understand is that Donald Trump is an incredibly appallingly ignorant man.
08:23He did not know what happened on December 7th, 1941 at Pearl Harbor, among many, many things that show how ignorant he is.
08:31No, hold on, you're telling me Donald Trump had no idea of Pearl Harbor?
08:36Yes, yes.
08:37And he had to have it explained to him by Marine General Kelly, who was his chief of staff at the time in 2017.
08:43And it's one of many, many examples I could cite to you of Donald, whom I've known and covered now for more than 37 years, not knowing anything.
08:53And so in this matter with India, who does he rely on for advice?
08:57Howard Lutnick, who worked at a financial firm, has no experience in diplomacy or anything else.
09:05And Peter Navarro, who was a fringe character in economic policy and who used throughout his academic work and popular works,
09:16a source who turns out to be Peter Navarro.
09:20So you have a dunce surrounded by dunces who do not know what they are doing.
09:25And Trump is flailing around trying to find out what to do.
09:29We've just had the relevant appeals court hold that his tariffs are illegal because, as I teach my students at Rochester Institute of Technology,
09:39only Congress has the power to impose tariffs, which are a kind of tax.
09:43And Trump, who has declared himself on February 26th to be America's dictator and is trying to consolidate power,
09:52is unable to pull this off so far in a complete and total manner, as he believes he's entitled to do.
09:59He believes he has the right to murder people.
10:02The U.S. government just murdered 11 people on a boat in the Caribbean, and they contend it's our right to do that.
10:07And Donald simply has no knowledge of economics, even though he was given a degree in economics by an Ivy League school.
10:15So the most important thing to understand is you're dealing with an ignoramus, a man who has bluffed his way into the White House twice and has no sense of policy.
10:26And he was intentionally humiliated at the SCO meeting by Xi, Modi, and Putin.
10:34They very clearly, in the limo rides, intended to humiliate Trump, and he now doesn't know what to do except he's angry and hurt.
10:42A dunce surrounded by dunces.
10:44Brahma Chalani, your response to the way Donald Trump, every day, not just him, but his aides now, seemingly getting more and more belligerent.
10:53You might have heard Howard Lutnik saying that India will come to the negotiating table in two months and say sorry.
10:59And, of course, Trump himself saying we've lost India to the deep and dark China.
11:04How are you seeing this?
11:06This has gone well beyond any kind of rationality anymore.
11:11Trump has turned American foreign policy into a one-man reality show.
11:17And his commerce secretary's demand that India leave BRICS clearly shows that the one-sided trade deal that Trump wants with India is not just about trade.
11:33It's about foreign policy.
11:35It's about India's strategic autonomy.
11:37We knew all that.
11:38And that's the reason why the trade deal has not been clinched, because India is not going to accept a trade deal that impinges on India's strategic autonomy.
11:52But this is exactly what Trump is seeking, to mount pressure on India.
11:59He has let loose his attack dogs.
12:01Peter Navarro is only one of them.
12:02But we should not forget that India also came under pressure from Trump's predecessor, Joe Biden, after the Russian invasion of Ukraine in April 2020, for example.
12:16Sorry, in April 2022, Joe Biden's top economic advisor openly threatened India that if India did not take sides in the Ukraine war,
12:27the cost for India, quote-unquote, would be serious and long-term.
12:34That threat only hardened India's resolve to stay neutral in the Ukraine conflict.
12:43Likewise, Trump's threats are going to only reinforce India's determination not to sign on to a one-sided trade deal.
12:55He wants a trade deal on his terms.
12:58He wants a trade deal on his terms, though, Brahma, but the last thing, and you know this better than most,
13:03the last thing we want to do is use, you know, go and deal and negotiate with China when we have a weak hand.
13:12I mean, that is a concern also, isn't it?
13:16Yes, but look at a couple of ironies here.
13:21First, he's been quoting China.
13:25He's been seeking, he wants a summit meeting with Xi Jinping.
13:29So when he talks about darkest, deepest, darkest China, that is the first time in his second term he has taken on China in this manner.
13:41Second, he says India and Russia are lost to China.
13:48That's absurd.
13:48Only yesterday he said he's looking forward to talking to Putin by phone.
13:54In fact, in Alaska, he was wooing Putin in order to break the Sino-Russian axis against the U.S.
14:02He recognizes that U.S. policy has pushed Moscow closer to Beijing.
14:07As far as India is concerned, he understands, I'm sure he understands the basic thing that Modi's overture to Beijing is only a tentative one,
14:18an effort to, an effort at detente, a step towards rapprochement.
14:27We know from Modi's earlier efforts at rapprochement, this is his third effort, the earlier two efforts ended miserably.
14:36They failed.
14:37And nobody knows whether the current effort to improve relations with China is going to succeed.
14:43So he knows very well that India is not lost to China, that the rupture between India and the U.S. is not permanent,
14:50that a trade deal eventually will be signed between Washington and New Delhi.
14:54That is, if Trump realizes that his demands are outrageous and will not be accepted by New Delhi.
15:01So yet he is, through his attack dogs in particular, he is turning Indian public opinion against the U.S.,
15:09which is counterproductive to American interests, because the public in India has had a reputation of being U.S. friendly.
15:17In fact, in the global opinion surveys, the Indian public tends to be the most U.S. positive among all publics in the world.
15:26And yet today, through these statements by his attack dogs, he is turning public opinion in India against the U.S.
15:34I take your point, because there seems to be, therefore, a situation which Donald Trump finds himself in David C. Johnston,
15:44which is replete with double standards.
15:47As Brahma Chalani points out, here is someone who wants to do a backroom deal with the Chinese.
15:51Here is someone who wants to do a deal with Putin.
15:54When India deals with them, they are called autocrats.
15:57Here is someone who is happy to lunch with a field marshal, Aasem Munir, who is again a symbol of military autocracy.
16:07I mean, does Donald Trump have any kind of principles at all?
16:11Is it all transactional or is it even transactional anymore?
16:15There are no principles with Donald.
16:18They just do not exist.
16:19And frankly, if you had grown up in the horrible household he did with a cold and distant and unaffectionate mother
16:26and a monster of a father who was constantly telling you how terrible you were,
16:32you would grow up and you would speak just like he does and think just like he does.
16:38You know, I've been telling people since 2011, and I've known Donald since 1988.
16:42I actually wrote about him becoming president way back in 1988,
16:45that Donald believes he should run the whole world.
16:48He is a special, unique person, and everybody else is a stupid idiot.
16:53And a lot of people thought that was way out there in 2011.
16:57Well, earlier this year, Donald Trump told two journalists from the Atlantic magazine,
17:02I run the country and the whole world.
17:04He believes this.
17:06He has these delusional self-beliefs.
17:09And in the case of the relationship between India and Russia and Ukraine and that triangle,
17:14look, India is a beneficiary of being able to buy lots of oil at about 20% below the world price,
17:21which is a huge boon to the Indian economy.
17:24The U.S. produces more oil than it can consume, but it doesn't have all the refining capacity it needs.
17:30So India sells refined oil products to the U.S.
17:33And it sells a lot of diesel to Ukraine.
17:37So it's in a position that Donald can make noise about.
17:42But the simple fact is that India should pursue its best policies in its own interests and not think,
17:50and clearly from the statements you're making, your guest and the ministry spokesman,
17:55they're not bowing to Donald's demand that, you know, I'm your real leader.
17:59You will do what I tell you to do that's in my interest.
18:02Does he have a game plan?
18:04But David, does he have a game plan in all of this?
18:06Because he's always spoken about tariffs and he's weaponized it now.
18:10But is there a, does he really have a game plan when Howard Lutnik says,
18:15no, India will come to the dialogue table and say, sorry, in two months.
18:18Is this all a make-believe world that he lives in?
18:21Or does he have any long-term clear plan?
18:25Donald creates his own reality.
18:28He just makes things up and then you're supposed to believe them,
18:31which millions of Americans do, a minority of them, but tens of millions of Americans.
18:35He has no strategic plan.
18:37He's never in business or anywhere else had a strategic plan.
18:41In fact, he was not a businessman.
18:43He was someone who borrowed money and extra money to take fees,
18:47multimillion-dollar fees for himself,
18:49and then he ran businesses until they were into the ground and shut them down.
18:53Businessmen are people who create wealth.
18:56Donald is a wealth destroyer.
18:58And in the case of the tariffs, what's panicking Donald is he has no authority under the American
19:03Constitution to impose tariffs, which are a form of tax.
19:07The U.S. Constitution makes that solely the province of the Congress.
19:11He hasn't even asked the Congress to pass his tariffs as law.
19:15And so he knows that he's facing a terrible problem down the road,
19:20but he doesn't have the intellectual capacity, the theoretical knowledge to do anything about it
19:26except complain.
19:28And pretty soon he's going to say, it's unfair.
19:30You're being unfair.
19:31You're being unfair.
19:32Because that's his default position when he can't get anywhere.
19:35Okay, final word from you, therefore, Brahma, and a quick final word.
19:39Today, India has finally reacted.
19:43Okay, we've seen India reacting to Peter Navarro.
19:48David, do you believe India should react strongly or should stay calm
19:52and allow this reality show, as you're calling it, to play out?
19:56A quick final word.
19:58Don't take the bait.
20:00Don't take the bait.
20:01The resistance to Donald Trump is growing.
20:05There are now some Republicans in Congress who are beginning to realize
20:08that Donald is this mentally disturbed megalomaniac and are pushing back.
20:15There have been two congressional hearings in the last 48 hours that are very revealing about this.
20:20But don't take the bait.
20:23Just continue to pursue your own interests.
20:26And keep in mind, India is the seventh largest U.S. trading partner.
20:29So, the U.S. has an interest in not, as Donald is doing, trying to enrage India.
20:37Donald doesn't have an interest in that.
20:39The U.S. does.
20:41Brahma, very quickly, do you believe that India has to, at some stage, say enough is enough or not?
20:47Today, we've responded to Navarro.
20:49Should we respond now every time America, Howard Lutnik says we'll come and say sorry,
20:54India will come and say sorry?
20:55Should we be reacting or just stay calm?
20:57I think a restrained approach from India is the best way to deal with Donald Trump.
21:06Even today's statement on Peter Navarro was a bit unnecessary.
21:11It's best to ignore these attacks and let Trump and his attack docs, let them attack India.
21:23Because they're becoming increasingly desperate and frustrated.
21:28It's clear, even from Trump's own post, that it's becoming desperate and frustrated.
21:35Because American media is highlighting the fact that he has pushed India to mend relations with China.
21:43So he's on the defensive now because there's been front page coverage in the New York Times and other newspapers about how he has turned India from a close ally into a country that is now seeking closer relations with China.
22:01So in a defensive mode, he has posted this latest thing on Truth Social, claiming that India has lost to China.
22:12It's ridiculous.
22:13Okay, we leave it there.
22:15We leave it there.
22:16Donald Trump, there's a lot of noise around what he says.
22:20But as we've been told today by our guest from America, David, he said, according to you, strong words, dunce surrounded by dunces.
22:28The question is, is there a method to the madness?
22:31That's what we'll see in the next few weeks and months ahead.
22:34But for now, Brahma Chalani, David Johnston, for joining me here, trying to read the mind of Donald Trump, almost an impossible task.
22:42Thank you very much for joining me here on the news today.
22:45I'm turning from there to our other big story tonight because remember, the center earlier this week slashed GST rates on several consumer goods and household items.
22:55In a moment, I'll be joined by someone who was one of the architects of the original GST.
23:00He will take our unanswered questions, former chief economic advisor, Arvind Subramaniam.
23:05But today, we also spoke exclusively to Finance Minister Nirmala Seetharaman, who claimed that the work on GST reforms was underway for the last one and a half years and had nothing to do with Trump tariffs.
23:18Listen in.
23:24Six months ago, when you presented the budget, you brought in direct tax cut.
23:30Now, this is six months later.
23:32It's an indirect tax rebate which has come in, ma'am.
23:37What next is there?
23:40A lot of anticipation around it.
23:42And then we'll be opening the floor to questions and we'll be traveling to Shweta and my home state of Bihar, which is a pole-bound state as well.
23:48Well, this is a big change in GST and change in every thing.
23:56And then we'll be talking about it.
24:26So we absorb a lot of things and we absorb a lot of things and we absorb a lot of things and we absorb a lot of things.
24:36After 20 seconds, the implementation of this whole country is getting a lot of benefits and not getting a lot of things.
24:52It is a big job.
24:54Inflation, the government tries to keep it in control every step.
25:00Sometimes, the supply problem is not in control.
25:06But this is an indicator for the economy.
25:12That's why we can't remove inflation-based measures for the GST reform.
25:20And the GST reform...
25:24You are raising inflation.
25:26After that, you will also add this.
25:28Do you have to take it because of the tariff of Trump?
25:32No.
25:33The work has been happening for a half a year.
25:36The group of ministers was made a half a year before.
25:40Then, the government changed.
25:44That's why the chairman of the G.A.M. chairman of Karnataka, the general chairman of Karnataka,
25:50took the deputy chief minister to Bihar's deputy minister.
25:53All these are being affected.
25:56And in more than 300 items, the rates are lower in goods and services.
26:05We can't do it in one day.
26:08And when inflation is gone, we are talking about this.
26:12We can't do it in one year.
26:14We've gone through every item.
26:27It is a time-consuming exercise.
26:30Okay, the finance minister says this has been a detailed, time-consuming exercise, the GST rate cuts.
26:38But what are the big unanswered questions that you and I, and indeed the citizens of the country, want to know?
26:45Aside from the political noise, we are joined by someone who's tracked GST for years.
26:50He was part of Arun Jaitley's original team that brought in GST in 2017.
26:55Arvind Subramaniam, former chief economic advisor, one of the country's leading economists, joins me.
27:00Appreciate your joining us, Mr. Subramaniam.
27:03Thank you very much for taking out the time.
27:05I'm going to ask question by question, and you can break it down for our viewers.
27:09I know you've been writing about this, sir.
27:12My first big question, do we finally have, Dr. Subramaniam, a good and simple tax?
27:20Is this exactly what you wanted all these years?
27:23You couldn't do it in 2017.
27:25You've got it now, just two major tax brackets.
27:31Yeah.
27:32First of all, Rajiv, thanks for having me on the show.
27:34Great to be here.
27:36The kind of simple answer to your question is that the GST, by eliminating the 28% slab, which never deserved to be there in the first place, and by reducing taxes on a number of items, the tax has become more good and more simple.
28:00It hasn't become the perfect good and simple tax.
28:04Certainly, lots of tax cuts which will benefit the middle class.
28:08I think eliminating the high tax on cement will, I think, boost production.
28:12So, on the whole, a terrific effort to take the GST one step closer to what many of us would desire to be a really good and simple tax, but we're still some ways away from reaching that goal.
28:30What would it take for that, since you're saying we'd be still some, what would act, what is it that needs now to be done to really make it a good and simple tax?
28:39I recall before the reforms came, you'd put out an article saying, there were, it wasn't just three rates, there were numerous rates.
28:47Of course, famously, how popcorn between salted and caramel had three different rates.
28:52What would you like to see happen next to make it truly a good and simple tax?
28:57I think, first of all, Razdeep, as you said, and as my colleagues and I wrote, you know, on the face of it, it seems like there are two slabs or three slabs, you know, the zero, the five and the 18.
29:13But in practice, there are, especially if you take the cesses, there are many, many more slabs.
29:21Even outside of the cesses, there, you know, for example, you have a 1% GST without ITC.
29:30You have a 5% GST without ITC for restaurants and 18% with ITC.
29:35The composition, which applies to small traders, you have multiple rates for them.
29:41And then, you know, so the multiplicity is still there.
29:44There are still lots of cesses.
29:46We don't know how the tax rates, the cess rates on the goods, on the sin goods will be simplified.
29:53There's still some duty inversion where taxes on outputs are still lower than taxes on inputs.
29:59As you said, there's the popcorn problem.
30:01There are things like, you know, taxes depending upon the end use.
30:06I mean, if you use it a certain way, there's a certain tax.
30:10If you don't use it a certain way, a certain tax.
30:12And then even there are taxes based on, you know, what goes into it.
30:16You know, if it's based on wood, furniture, taxes are an item.
30:21If it's not good, so there's still a lot of complexity that needs to be addressed.
30:26And I think that should be the next stage of making it a truly good and simple tax.
30:32You know, at least popcorn now is uniformly at 5%, whether you buy salted, caramel, packaged or loose.
30:40But let's come to the next question, Dr. Subaravaniam.
30:43What specific measures need to be taken to ensure that businesses pass on the benefit of rate cuts to consumers?
30:50There's a concern that will businessmen automatically transfer benefits to consumers.
30:55What's your view on that?
30:57I think, you know, in many of these cases,
31:01my sense is that the tax rates have been sizable enough that they will be passed on to consumers.
31:10I think the second thing to note, Rajdeep, is that if you believe that the economy is soft,
31:18then the incentive for producers to actually reduce prices and pass on these tax cuts, I think the incentives will be strong.
31:30So I think we should let, you know, it play itself out.
31:35And I think what I think we shouldn't have is some heavy handed intervention, you know, to force people, producers and traders to reduce prices.
31:45I think you should trust in the fact that there have been large cuts and hope that given the state of the economy, that these cuts will be passed on to consumers.
31:56So no preemptive, heavy handed action.
31:59OK, let's turn to the third question. And you partly raise that in your original answer as well.
32:05How will the revenue loss of approximately 48,000 crores, and this is only one figure that's been thrown around, be managed by the center?
32:14How do you? The fear, of course, is that there will be a huge revenue loss.
32:17Will this affect fiscal deficit numbers? Will it affect the revenues of states?
32:24How do you believe this will be managed by the center? Will we see more cesses is one concern?
32:31So I think that's a very good question. I think there is a lot of uncertainty about what the revenue consequences will be.
32:40But I think we should break this up into what will be the revenue consequences for the country as a whole and what will be the consequences for the states.
32:50I think that the government has put out some number like 48,000 crores or whatever.
32:56Maybe that's only a half year estimate. But I think if you look at any reasonable estimate of what has happened in terms of the tax cuts and use that to project something for the year as a whole.
33:10And remember, this is the key point that if you consider the whole, you know, GST and cesses, what is happening to the whole kitty.
33:19Our own estimate is that something like one and a half to two lakh crores will be the loss on an annual basis for the overall kitty.
33:29Now, that's that's a little bit higher than what I think the government is projecting.
33:35But I mean, this depends upon some assumptions.
33:38But I think motor motor, you know, one and a half to two lakh crores for the kitty as a whole.
33:43Now, of course, some of this is going to depend upon what the government is going to do to the same goods.
33:48Are the cesses going to go up? Are they going to remain the same? Are they going to come down?
33:52But that's roughly the order of magnitude. So there will be a loss overall to the GST kitty.
34:01And I think what everyone should realize is that pre GST, the overall kitty was something like six point one to six point two percent of GDP.
34:13When all these reforms are played out, that will be closer to five and a quarter, five and a half.
34:19So over 10 years, the overall GST kitty will has led or will lead to a loss.
34:26And that will affect the fiscal situation of the country as a whole on a permanent basis, which I think we'll all have to grapple with.
34:35So that's the first point. The second point is what's going to happen to the states.
34:39Now, if the overall kitty comes down, you would think that the states will also have face a thing.
34:46But the government has argued and many people are arguing that no, the states will not lose out.
34:53And they are not wrong because what they're comparing it is with the current situation.
34:59In the current situation, just to give viewers a sense, we are taking in about five point nine percent of GDP overall kitty.
35:08Of that, about point four percent is raised from the CES.
35:13At the moment, the CES is neither going to the center nor going to the states.
35:18Basically, the center is collecting it and paying off the loans.
35:22So at the moment, the states are getting something like two and a quarter, two and a half percent of GDP.
35:29Going forward, they could actually retain that amount. And so it seems like the states are not going to lose.
35:37But if you look at it in the broader context of what they were getting pre-GST, because the overall kitty is coming down,
35:45they will also face probably a hit relative to that.
35:48And that's why they've expressed some anxieties about, you know, their position needs to be safeguarded.
35:55Interesting. Let me come to my next question.
35:58And this is a challenge that you must have faced even when you all unveiled GST in 2017, but also today.
36:04How does one ensure better compliance and administration of GST?
36:10There is a fear and I hear it all the time of Inspector Raj that has come in too many forms originally.
36:17Now it's the government claims they are simplifying it.
36:20Do you believe that more needs to be done to ensure compliance and administration of GST?
36:26Looking at input tax, you mentioned how if I'm in the furniture business, there are lots of input costs involved.
36:33And sometimes the GST inspector will use that to harass me. And that's exactly what's been happening.
36:40Yeah. I think that's a really fair and good question. I think one should separate out two things.
36:47I think the more simple the tax becomes, the better compliance will be and less the discretion and arbitrary enforcement of the tax authorities.
37:00So in that sense, what has happened with these recent reforms is a step in the right direction.
37:06But I think almost separate from that, there is a whole history and background of the tax inspector Raj.
37:16I think that's a much bigger issue. And I would, in fact, argue that post-GST that has become marginally worse, as it were.
37:26Something about the GST has made tax authorities. And by the way, sure, the culprits are as much state governments as state tax authorities, as central tax authorities.
37:37I think something about the GST has maybe made it more legitimate in the eyes of tax authorities to go after the common man, the small and medium trader.
37:49It's a much bigger problem, some of it aggravated by GST, hopefully some of it attenuated by the recent simplicity.
37:58But I think tax authorities in India need to look much more broadly at themselves and say, how do we get rid of this harassment, especially of the small and medium trader?
38:11It's something that I think we really need to focus much more on that.
38:16My next question is partly political, but will the GST rate rationalization fully offset the impact of Trump tariffs?
38:24Now, the finance minister says this rate cut has nothing to do with Trump tariffs, but it seems too much of a coincidence.
38:31Do you believe, though, that it puts us in a better position with these rate cuts to offset the impact of Trump tariffs?
38:38Rajdeep, my own view is that these GST tax cuts will maybe give a modest boost to the economy in the short run, right?
38:52The Indian problem, the malaise of the Indian economy is much deeper and structural.
38:58If one wanted to summarize it, it would be why is private investment, domestic and foreign, so weak and has been so weak for a very long time?
39:08The GST reform, while desirable, I don't think it's going to seriously address the bigger problem that India faces.
39:17How do we boost private investment?
39:19And, of course, now that weak environment has been aggravated by the Trump tariff shock.
39:24So, while the GST reforms are desirable, you know, welcome, they will not really solve this more serious problems of the weak private investment and the Trump tariff shock.
39:38That requires much more serious structural reform, which I hope the government will embrace seriously.
39:46As you know, there's a deregulation commission.
39:48I hope we'll have new ideas on that.
39:51But I think, but let me just say, Rajdeep, one last point.
39:55I think I would like to tell viewers, when we think about what the government needs to do for reform, I think there's an equally big agenda on what the government should not do in terms of this.
40:09You know, whether it's the arbitrary enforcement, whether it's the tax terrorism, whether it's, you know, favouring some at the expense of others.
40:18There's a lot of a, you know, do no harm agenda as much as a do more good agenda.
40:25Very interestingly put there, Arvind Subramaniam.
40:28My next question, is there an urgent need for bringing petroleum in the near future under GST?
40:33And how will states be compensated for the potential revenue loss?
40:37Rajdeep, great question.
40:40And I have actually changed my views on this over the last five years.
40:44I used to be a big proponent of saying, let's get petroleum into the GST.
40:50Let's get electricity in the GST.
40:52I mean, I'm still theoretically in favour.
40:55But having seen the experience of the last five, six years, where the state's fiscal sovereignty was to some extent taken away by the GST,
41:07the hope was that the revenue performance would be so good and the centre would also behave in a spirit of cooperative federalism.
41:17Now, I think I'm afraid to say that both the revenue performance and the overall, you know, spirit of cooperative federalism has not been as strong as it used to be.
41:29Therefore, to ask the states to say, give up more sovereignty by bringing petroleum into the GST is a tough sell and a tough ask.
41:39And it's not something I think the climate is right to, you know, further narrow states' fiscal sovereignty.
41:48So, on that score, I would not be in favour of bringing petroleum into the GST.
41:54I have a final question for you.
41:56And this is someone who was part of the original team under Mr. Jaitley, who brought GST in place.
42:02I had Mr. P. Chidambaram on my show only yesterday and he said that it's come eight years too late.
42:09Do you believe that much of this could have been done much earlier?
42:14I often wonder why was health and life insurance, for example, under GST, it could have easily been zero, which is what's happened today.
42:21How would you respond to that? Was it simply something that was, that was waiting to be done a long time ago?
42:28Or is it we have finally at least taken the incremental steps forward?
42:34I think, Rajdeep, as in most cases, both your statements are true.
42:40It's both this should have been done eight years ago and done, you know, I still feel at the moment of conception was the big opportunity.
42:50The big opportunity that we lost to really make it a good and simple GST.
42:54Why didn't it happen? Why didn't it happen? As someone who was an insider, why didn't it happen then?
42:59Why were you all unable to bring a good and simple tax eight years ago?
43:04I think, Rajdeep, I hate to be self-referential, but my book of counsel has, you know, it's partly political and partly, I wish,
43:16or to be a bit honest, I wish the leadership had been convinced of the need for simplicity and lack of complexity at that stage.
43:27I think they were less, I think, convinced by it. And I wish there had been more.
43:33But let's not also forget, as you said, Deirai, but, you know, at least now we've done it, better late than never.
43:42I think if you do the counterfactual as today versus five years from now, it should have been done eight years ago, but better today than never, better today than five years ago, five years later.
43:54Arvind Subramaniam, you know, great to have you on the show. You've got a major book coming out next month.
44:00We hope to get you on that and look at the overall trajectory of Indian reform over the years.
44:05Often reform in this country is done by stealth. And either way, it is a step forward.
44:10Is it as big a step forward as it's being made out to be? I think that we'll wait and see.
44:15As you've rightly pointed out, there are still many gaps that still need to be filled in.
44:20But I appreciate you taking the time off and joining us on the show tonight. Thank you very much.
44:26Rajdeep, great to be on the show. Thanks very much for having me. Yeah.
44:29Thank you. Okay, good. Good to have one of the finest voices on the economy speaking to us there, Dr. Arvind Subramaniam.
44:37Let me turn to my home state of Maharashtra, one of my home states where, again, our politicians are on the wrong foot.
44:43This time, Deputy Chief Minister Ajit Pawar landing himself in a fresh controversy after a viral video showed him allegedly pressurizing a woman IPS officer to halt action against illegal soil excavation in Solapur.
44:58Later, Pawar himself issued a clarification claiming he had no intention to interfere in the functioning of an IPS officer.
45:08Take a look at why Pawar is in a bit of a hole.
45:13Another day, another abuse of power by our netas.
45:23And this time, by the second in command in Maharashtra, Deputy Chief Minister Ajit Pawar.
45:30A video has surfaced showing Pawar allegedly pressurizing a woman IPS officer to halt action against illegal soil excavation in Solapur.
45:42Sub-Divisional police officer Anjana Krishna was acting on complaints.
45:49of illegal moram mining when villagers clashed with officials.
45:56That's when NCP worker Baba Jagatab dialed Ajit Pawar and handed over the phone.
46:10On the call, Pawar is heard asking the officer to stop the action.
46:27When she fails to recognize him, he goes ahead and questions if she has become so daring.
46:33The Maharashtra Deputy Chief Minister has now put out a statement saying his intention was not to interfere with law enforcement,
46:48but to ensure that the situation does not escalate further.
46:52I think that Ajit Pawar has never met with any officers with a wrong job.
47:03There is no one in front of us.
47:05It happens that it is not known in front of us.
47:07Meanwhile, the opposition is turning up the heat, demanding an immediate resignation.
47:37But the brow-beating of an IPS officer is not unprecedented for the NCP strongman.
47:49As viewers will remember, Ajit Dada is no stranger to brash acts of VIP arrogance.
47:56Just this January, at a Baramati event, he sparked anger with an insensitive remark that his voters do not own him.
48:03And back in 2013, during Maharashtra's drought crisis, he faced outrage for saying,
48:10should he urinate in the dam since it had dried up?
48:14Such repeated brazenness raises only one question.
48:19When will those in power realise they are not above the janta?
48:24Bureau Report, India Today.
48:26Sometimes power can be misused and abused.
48:35Okay, let's turn to another of our top stories.
48:37Manipur appears to finally be seeing some light at the end of a long dark tunnel.
48:44Over the last two years, more than 250 people have died in ethnic violence.
48:50Now, the Kukizo Council announced that it's reopening a key national highway
48:56and has signed a fresh peace agreement with the centre.
49:00All of this comes ahead of a likely visit by the Prime Minister to Manipur in the next few days.
49:07Take a look at this report on what's happening on the ground in Manipur.
49:11For the last few years, Manipur has been on the boil since the Kuki and the Meti groups clashed.
49:26To date, the state still awaits lasting peace.
49:31Efforts are currently underway by the both central and the state governments
49:35to restore normalcy in the northeastern state.
49:38In a significant decision, the Kukizo Council decided to open the National Highway 2
49:46for the free movement of commuters and essential goods.
49:50The Ministry of Home Affairs and the Manipur government
49:52have also signed a suspension of operations agreement with Kukizo insurgent groups.
49:58The agreement signed with the Kuki National Organisation
50:01and the United People's Front is expected to positively contribute
50:05to ongoing peace efforts in Manipur.
50:08However, valley-based civil society organisations,
50:13particularly the All Manipur United Clubs Organisation,
50:16have strongly opposed the centre's decision to extend the agreement with Kuki militant groups.
50:23They argue that the pact is not people-oriented
50:26and poses a threat to Manipur's already fragile peace.
50:30During the Sioux, so many unwanted incidents have been carried out by the Sioux cadders.
50:41The mention may be made by the Jaguarato massacre
50:43and so many condemnable actions were done by the Sioux cadders.
50:49Meanwhile, the Kukizo Council, following a delegation-level meeting with the Home Ministry in New Delhi,
51:03has welcomed the extension of the agreement and reaffirmed its commitment to political dialogue.
51:09A new clause has been added in the agreement which says that after the signing of the SO agreement,
51:17there will be political dialogue and political solution will be based on a negotiated political settlement
51:24under the constitution of India in a time-bound manner.
51:27The Congress, on the other hand, has alleged that the agreement was allowed to lapse in February 2024.
51:36So far, over 250 people have lost their lives
51:40and thousands have been displaced in the ongoing conflict.
51:43With this suspension of operations between the government of India and the three Kukizo group,
51:51people in Manipur generally hope that this is a step towards the long-lasting peace
51:57in the striped-torn state Manipur.
52:00Bebi Shirin, in infault for India today.
52:04Let's turn to the story of Punjab,
52:06where floods triggered by the overflowing rivers of the state continue to destroy homes,
52:11submerged crops, uproot families, leaving thousands in tents or temporary shelters.
52:17Punjab's villagers along the river are still counting their losses.
52:21Take a look at how people are struggling to piece together their lives.
52:37It is the worst floods Punjab has ever seen.
52:41And the worst affected are Punjab's farmers.
52:45The satlaj has swallowed up vast fields and farmers have lost all their land.
52:51In Gatti Rajok, in Punjab's Firozpur,
52:55farmer Tarsim has lost his land, his health and his hope.
52:58Nearby 70-year-old Pyaro lives under a leaking roof with six family members.
53:28In the neighbouring village of Rukhnevala, the floodwaters have led to the collapse of several houses.
53:5370-year-old Milky Ram, who was blinded in the 1988 floods, has now been rendered homeless once again.
54:02His family remained stranded for 10 days before rescue teams reached.
54:06There was no one, there was no bank of tax.
54:08�ind to keep him safe, need to stop the water from the people after 14, 16, 16, 17.
54:11Existление the law that stays with 100, 16.
54:12If there were thousands of children in the past...
54:13We were living in the Championships for 14, 16.
54:15The more than 14 in the past, we were living in the past, we were living in the past.
54:16The good time of coming to abortion when we were living in the past, we were living in the past.
54:18In the past, we are living in the past.
54:20I don't know if I'm a girl.
54:26I think I'm a girl.
54:30What are you doing?
54:32I'm a girl, I'm a girl.
54:38In Habibke village too, it's the same story.
54:41Massive crop losses have deepened the already severe crisis for farmers.
54:46While in Fazilqa, farmers are struggling to protect their cattle and belongings,
54:52with up to four feet of water inside their homes.
55:05Across Punjab, the floods have impacted nearly four lakh people,
55:09destroyed over 1.7 lakh hectares of crop and claimed at least 43 lives.
55:17Over 20,000 people have been evacuated and many of them remain in relief camps.
55:22These stories from flood-hit Punjab, which are merely a few among thousands,
55:28reflect not just immediate suffering, but a looming long-term crisis
55:33of crippling debt, health risks, homelessness and broken livelihoods.
55:38With Aman Bhardwaj, Bureau Report, India Today.
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