Chakra & consumption
Two themes stood out in Modi's I-Day address. Mission Sudarshan Chakra, he said, will be a powerful platform that will protect both public places and critical infra, and be operational by 2035. This is evoking comparisons with Israel's Iron Dome. More relevant is the stellar performance of the Integrated Air Command and Control System (IACCS) and Akashteer during Op Sindoor. But air defence is an evolving tech. India faces two issues. First, versatile and rapidly improving battlefield drones. IACCS and Akashteer need upgrades for this. Second, we are still using diverse platforms – Indian, Russian, Israeli, etc. This is less than ideal. If Sudarshan Chakra can address both these concerns, it will be a massive boost for military self-reliance.
On GST, Modi promised Indians will pay a whole lot less for a lot of stuff they buy. Pegging this to Diwali was classic Modi. From what he said and what officials briefed later, the biggest GST reform since its inception will make it basically a 2-rate system – 5% and 18% (a few 'sin' goods will be taxed at 40%). That will be a huge improvement on the current, complicated 5%, 12%, 18% and 28% structure. Consumers are likely to benefit from a large number of consumer goods moving from the 12% to 5% rate, some from 18% to 5%, and axing of the eye-watering 28% rate. Health insurance premiums may finally get taxed at a lower rate. That there'll be procedural rationalisation, too, makes this mithai sweeter. And that GOI seems ready to take a revenue hit initially and bet on higher consumption to make this up down the line, is welcome reformist spirit. BJP will hope lower prices will be a vote attractor in poll-bound Bihar, a densely populated poor state. But that takes nothing away from the significance of what Modi promised.
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This piece appeared as an editorial opinion in the print edition of The Times of India.
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