When Rahul baba ditched the zero tax proposal and BJP cashed in

It was about a year-and-half ago that a team from the Arthakranti Pratisthan, Pune, reached the doorstep of Congress vice-president Rahul Gandhi proposing radical tax reforms for India with multiple benefits including a check on corruption.

It was the word “corruption” that had caught the young Gandhi’s attention, right in the midst of the 2G and other scams and the Jan Lokpal movement.

But after going through elaborate security checks and waiting for one-and-half hours, the Arthakranti team got “just 10-15 seconds” with Rahul.

“The Black Cat commandos even refused to allow us to hand over a CD detailing the Arthakranti model. They were not sure what the CD might contain,” a member of that delegation told this journalist.

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[caption id=“attachment_1331471” align=“alignleft” width=“380”]  It was about a year-and-half ago that a team from the Arthakranti Pratisthan, Pune, reached the doorstep of Congress vice-president Rahul Gandhi proposing radical tax reforms for India with multiple benefits including a check on corruption.
AFP[/caption]

“Rahul uttered just one sentence- Please talk to Dr. Mohan Gopal, let him see it first.” The Arthakranti team then spent two-and-half hours with G. Mohan Gopal, Director, Rajiv Gandhi Institute for Contemporary Studies at the Rajiv Gandhi Foundation, who, however, declined to take a call. He in turn referred the group to the National Institute of Public Finance and Policy (NIPFP).

On January 7 when the Bharatiya Janata Party’s former president Nitin Gadkari organized a presentation for journalists in Delhi on these radical tax reforms proposal, he triggered a public debate on the idea, giving vent to an effort going on for more than a decade.

In a nutshell, these proposals call for withdrawal of high currency denomination notes of Rs 500 and Rs 1,000 as they generate black money; withdrawal of the existing taxation system; introduction of a 2% bank transaction tax and restricting cash transactions to a maximum limit of Rs 2,000 with no tax on such transactions.

The concept in its raw form was first taken to NCP president Sharad Pawar by its author, Anil Bokil, a mechanical engineer from Aurangabad who wound up his firm Dot Precision to promote his concept full- time. Prior to this Bokil had helped empower about 100 semi-literate, self-employed welders and fabricators set up tiny units in Aurangabad’s Tiny Industrial Estate, Chikalthana.

From that point on, Bokil and his fellow crusaders who established the Arthakranti Trust in Pune have held presentations before the Reserve Bank of India, top political parties of every hue and colour, senior bureaucrats, spiritual gurus, industrialists and businessmen such as NR Narayana Murthy, NGOs, reputed economists and spiritual leaders among others.

Among the Left parties, senior CPI leader D. Raja had called for a second hearing but did not pursue the issue after that, a member of the core team told this journalist. Economists and financial experts at the Reserve Bank of India and elsewhere rejected the proposal outright and the only two experts who gave a patient hearing were DR Pendse and Suresh Tendulkar, the late economist and chairman, Prime Minister’s Economic Advisory Council.

In the latest round of reactions from financial experts, a rare, seemingly neutral one is from Rathin Roy, director of the National Institute of Public Finance and Policy who told The Times of India: “It would be unfair to say that this proposal doesn’t have intellectual pedigree. There are similar proposals in the US and Brazil but a lot of research and groundwork will have to be done and therefore timeframe within which this can be done may exceed the lifetime of the next government.”

Bokil who lives an austere life and shuttles between Aurangabad and Pune told Firstpost that he was happy that Arthakranti was finally being discussed nationally. “I now feel that the issue has finally reached the level of a national debate which is very important,” he said.

“We have 110% support from Subramaniam Swamy,” he said of the maverick BJP leader, who they hope will help the group in tapping internationally-acclaimed economists to support the idea. Other BJP leaders who are counted as supporters of the proposals include the party patriarch LK Advani, president Rajnath Singh and senior leaders Sushma Swaraj and Nitin Gadkari.

Although senior BJP leaders Arun Jaitley and Yashwant Sinha have expressed opposition to the idea, the Arthakranti team is confident of addressing their doubts effectively.

Bokil is keen to see his tax reforms proposals in the BJP’s Vision Document 2025 which is under preparation and after that in the party’s Lok Sabha election manifesto. He and others in the group are also eager for open support from politicians in other parties too. “People say it is a radical solution, but the fact is that we are in a kind of mess that calls for a radical solution,” he said.

Road shows conducted by the Arthakranti team in colleges and other open and closed door gatherings have always won popular support and a strong people connect which is what seems to have attracted the BJP to this idea.

Shaken by the rising popularity of the Aam Aadmi Party, the BJP is in search of a real differentiator from other parties and sees a potential in the Arthahranti proposals. Although it is finally the experts who will need to endorse the proposals, the BJP could well cash in on the popular support with a promise to examine the proposals seriously.

On its part, the Arthakranti team is keen that support from the masses and across party lines forces politicians to examine the proposals seriously at the national level. The team will also continue to reach out to experts and seek their support for the Arthakranti model.