The new official took office with three fires, and modi did the same after he came to power, the first fire was currency reform; The second fire is agricultural reform; The third fire is conscription reform. But what is strange is that all three reforms have been strongly blocked by the public, and even triggered large-scale riots. The three reforms also bore different fates, with the success of the monetary reform, the abolition of the agricultural reform, and the reform of conscription advancing in compromise. Although the three reforms have gone to different ends, if you put these three fires together, you will see the rough side of Modi's talent, he reformed India's finance, agriculture and army, in the long run, these three reforms are conducive to India's rise, but unfortunately the short-sighted Indian people do not support him, otherwise he will enter the fast lane of development of India. This issue is about Modi's reforms and their impact on India's future.
There is no doubt that the Modi Agricultural Reform Act failed, because Modi himself announced the cancellation of this reform, but for the earlier currency reform, many people have different opinions, some people think it failed, some people think it was successful, from the currency reform to now, the results of the reform have been fully revealed, so I prefer Modi's currency reform success, why say so?
A few years ago, Modi began currency reform and issued what became the controversial "money scrap order", when the slogan was to fight corruption and counterfeit money, etc., and as a result, 99% of the old banknotes were later recycled, so many people thought that the plan failed because the black money was successfully laundered. But I would like to say that the original intention of Modi's monetary reform was not this, and the pretext of cracking down on black money was just to reduce the resistance to implementation, and it turned out that this approach was successful and made the currency reform achieve the desired purpose.
What was the original intent of Modi's monetary reform? It is the reform of the tax system, which is to take back the tax power from the local government. Before the currency reform, India had one of the biggest dilemmas, that is, it could not collect taxes, and most of the taxes collected were in the hands of the localities, which indirectly bred corruption. Previously, the power of the local states of India was too large, and they set up many tax policies on their own, and they collected them and put them in their pockets, which led to a shortage of money in the Indian central government, and many policies could not be promoted after the lack of money. After the introduction of the banknote scrap order, the central government directly strengthened its tax power, why did this situation occur?
In the past, India was a direct tax, such as direct real estate tax, tax on capital gains, etc., the result of direct tax is that the tax is many and complex, and this is difficult to be directly determined by the central government, because the situation in each state is different, so it is basically determined and levied by the local state itself, the direct tax is not suitable for poor countries, because the poor are too many to collect taxes, and the rich have a way to avoid taxes, and many people have cash or gold in their homes, which makes the central government do not know which people have money at all. There is no way to start taxing. This also led to the fact that indian banks were in a very weak position and could not use the bank as a financial instrument to help the economy develop.
After the abolition order was promulgated, everyone was forced to take money to the bank to exchange money, how many galaxies you exchanged had a record, the Indian central government will find that many people are actually very rich behind the surface poverty, of course, many companies behind it have also been indirectly exposed, such as a long-term loss of a company, the result is to see so much cash in the hands of the boss. I'm sorry, but in the future the tax department will focus on you. The biggest result of this banknote abolition order is that it counts the cash situation of the vast majority of the Indian people, and indirectly calculates the profitability of enterprises, and India is precisely a country that attaches importance to cash, which collects key information. The tax department can focus on action.
The abolition order is only a specific means of currency reform, but behind it is a whole set of actions, such as direct tax reform into a tax sharing system, which is very similar to our country, and some people say that India is learning from our reform. The tax-sharing system has actually weakened the tax power of the local states of India and strengthened the tax power of the central government. The local financial power has been weakened, and naturally there will be no strength to confront the central government in the future, and the confrontation between the local government and the central government has been a problem that many countries have had to face since ancient times.
Before the currency reform, the role of Indian banks on the economy was limited, because everyone put money at home, which led to the inability of the Indian central government to use the bank as a tool to promote economic development. And the abolition order forced many people to enter the bank, many people by the way to save money, which enhances the status of the bank, because the bank has more money, you can lend to more enterprises, rather than going to borrow money from abroad, before the cash is put at home is a dead money, the national economy is not much help, and now it is equivalent to disguised to let them put money in the bank, which is conducive to the country to make full use of this idle funds to promote economic development, another point of view, the bank's position is strong, the role of the Central Bank of India will be highlighted, Then the central government has one more financial instrument. This process has indeed hit a lot of counterfeit money because they can't be deposited in the bank, and counterfeit money in India used to be more rampant.
Any reform has advantages and disadvantages, currency reform is easy to affect the economy, so when the reform of the Indian economy had serious problems, but I think the benefits of this reform far outweighed the disadvantages, such as the increase in India's central fiscal revenue, and since the currency reform, the Indian central fiscal revenue has increased year by year, and the tax power has completely fallen from the local to the central government. Here's a statistic.
From April 2014 to February 2015, India's net tax revenue was Rs 651419 crore before the reform, while after the currency reform, India added 10 million taxpayers in the 2017-18 fiscal year alone. The most critical of these is the 19% year-on-year increase in personal income tax revenue, which is the result of currency reform.
In addition to tax and fiscal revenue growth, Modi is also paving the way for digital currency, in fact, digital currency is an effective way to combat corruption and black money, but we must be clear that the main purpose of the implementation of digital currency is not to fight corruption, but to promote economic development and taxation, when the income of enterprises and individuals are transparent, it is difficult to evade taxes.
If you want to promote digital currency, you must let the people connect with the bank, otherwise it will be difficult to advance. Secondly, there is a need for a large number of intelligent mobile phones, so we see that Modi has been in power for several years, and the large-scale popularization of smart phones has brought favorable conditions for the comprehensive promotion of digital currency, so this year the Bank of India announced that it will start digital currency next year, due to the previous enhancement of the status of banks, which is conducive to India's promotion of digital currency, which is an effective way to combat corruption and black money.
In summary, through the abolition of banknotes, India has obtained the power of taxation, strengthened the financial instrument of the bank, and calculated the income of the people, which will be conducive to promoting the issuance of numerical currency and increasing tax revenue. From this point of view, India's monetary reform was successful.
If reform was so good for the country, why was there a backlash from a large number of indians at that time? Because many people are involved behind the interests, the abolition reform is mainly aimed at big banknotes, that is, more rich people, who have been hiding their income for many years to evade taxes, and this reform will make them shine, so they naturally have to take the lead in opposing it. In addition to the rich, there are also the interests of the local states, because this reform is obviously aimed at the local states, to reclaim their tax power, and the local states will later distribute a large amount of cake to the central government, and they will of course oppose it. These two strata are opposed, and they have a strong voice, so they will naturally incite the masses who do not know the truth to protest and obstruct. But in the end they failed, because the people found that their losses were really small, but the corrupt officials and capitalists had suffered a lot of losses, and under the guidance of some calm and rational people, they did not make trouble but cooperated with the state, so Modi's reform was actually successful.
The central government has money to have more investment, such as military, economic, infrastructure, etc., many people do not know, India's investment in infrastructure is actually more careful, because it is related to investment and economic development. Therefore, in the past two years, India has accelerated the transformation of the national electrified railway, and in the next 3 years, they will complete the national railway electrification transformation. In addition to railways, India is also upgrading roads, ports, airports and more. And without these currency reforms, the central government wouldn't have much money to support these plans, so from that point of view, Modi is really thinking about the future of India as a whole.
Modi's reform is far-sighted, in addition to currency reform, Modi also engaged in agricultural reform and conscription, the result is a large number of popular opposition, and is fierce opposition, which is mainly to offend the short-term interests of the people at the bottom, but in the long run, these reforms are actually conducive to the development of India, conducive to the rise of India, but like currency reform, have been met with short-sighted people's fierce protests, but the outcome is different, agricultural reform failed, conscription reform compromised, However, the conscription system should still have a great effect, at least it will make India get rid of a large financial burden, and it will also enhance India's military strength.
So from that perspective, Modi is really a brilliant leader who is trying to bring loose India together, trying to create a centralized central government, and making the most visionary reforms of the financial, agricultural, and military at its core. And this reform really stands at the indian national level, not for the benefit of some vested interest groups or some local states. Although Modi is a big talent, it is a pity that the Indian states are independent and the people are too short-sighted, especially under the flicker of the super democratic slogan, it is easy to let his reform plan not pass smoothly, which has to be regarded as a major loss for Modi and India.