Rang De: A Citizen Movement Against Poverty Through Financial Inclusion


Swapnali Deshmukh is pursuing optometry doing her internship program at Laxmi College of Optometry, Panvel. What makes her journey remarkable is her struggle against the odds to pursue her education and an organization which has supported her through this.

Swapnali, the youngest of 4 sisters comes from a small village in Raigad in Maharashtra. Her father, Jagannath who is a daily wage construction worker was keen to ensure to provide her daughters the best opportunities in life. Having passed her high school with distinction, Swapnali chose to study Optometry. However paying close to Rs 2500 for the hostel fees in addition to her college fees was proving a big challenge for Swapnali. Given her situation, Laxmi College of Optometry recommended Swapnali for an education loan from Rang De.

Rang De is a non-profit organization that works to fight poverty with a variety of grassroots organizations working in sectors ranging from agriculture related farm producer companies, waste management, sanitation, education, handloom related organizations and others working with underserved communities all over India. These field partners work with the communities through the entire loan lifecycle connecting them to Rang De and its social investors. Rang De’s co-founder Ramakrishna NK, an Ashoka Fellow said “The motivation to start Rang De (in 2008), which is India’s first peer-peer lending platform came from the desire to reduce the high interest rates that the poor and underprivileged have to pay to traditional microfinance institutions.” Smita Ram, the other co-founder adds, “We give preference to first-time borrowers as we want to reach out to more people and lift them out of poverty.” After 7 years of existence, Rang De has facilitated over Rs 30 crore ($ 5.1 million) of social investments with repayment rates of 99.8% through its 8000+ social investors. Most of its borrowers (94%) are women.

Swapnali’s loan (at less than 5% p.a. flat) was funded by over 50 social investors. Laxmi also topped the final year of her college and recently presented a paper on Contact Lenses at an international conference in Chennai, plans to repay the loan after finishing her degree. Once the social investors are repaid the money, they can withdraw the money or choose to reinvest it to other borrowers as well.

The Logical Indian Community admires the work of Rang De to deepen financial inclusion and fight poverty and believes that we need many more such institutions.


Moving inch by inch towards GST

The 9th GST council meeting between the centre and the states on January 16 passed off with a broad consensus on several fronts. The roll out of GST would begin by July 1. The centre conceded in leaving 90 per cent dealers in under Rs 1.5 crore annual turnover category within the State government purview.

 Another contentious area of levying tax on economic activity within 12 nautical miles of territorial waters was given to states though such rights vest with the centre.  The initial roll out of GST by April 1 may not happen now and has been deferred to July 1, 2016. Nevertheless, the movement towards a new GST regime is happening inch-by-inch.

 In the next council meeting scheduled on February 18, the officials would sit together to categorize goods under the slabs of 6 per cent, 12 per cent, 18 per cent and 28 per cent. Finance ministers of different states have been making efforts to see that there would be no tax on agriculture products and minimum possible tax on goods used by the common man.

On the issue of differences between states over GST, the centre would intervene and resolve.

 Overall there has been a consensus among all the states barring West Bengal which insists a 100 per cent control over the traders with a turnover below Rs 1.5 crore.

The power to levy and collect Integrated-GST, a tax on inter-state movement of goods and services, would lie with centre but by special provisions, states will also be cross-empowered.  While there are issues such as dual control over assesses, the fact that with each council meeting some headway is being made augurs well for GST.

The coming days are exciting as several questions on sharing of administration, how is it going to be for large tax players, whether it would be on the basis of revenue or type of supply is to be seen.

The publication of GST laws would be keenly observed as all stake holders prepare for what can be termed as a new regime. Watch this space for more on GST.


GST just needs a push and a shove

The Goods and Service Tax (GST) can still be rolled out from April 1, 2016

It goes without saying that the GST is a causality of demonetisation and the fear of it getting postponed from the planned roll out from April 1 seems likely. But then political will and smart moves could well see the game-changing reform that it has come to be known become a reality. A consensus on key issues such as rates and jurisdiction must be reached before the budget session that starts from January 31, notwithstanding the opposition moves. This consensus is crucial for the roll out. Technically, the new direct tax regime has to be rolled out by September 16 as the one-year time given in the gazette notification on amending the constitution expires. The challenge that the Finance Minister Arun Jaitley faces is to wade through the different forces that wish to scuttle GST and postpone it further.

With five assembly elections round the corner, the push for GST must happen sooner than later as a lot of dust would rise after the elections. What the GST needs is a push and a shove. Once the elections are over, the political firmament would have taken a different hue and the possibilities of pushing GST under the carpet seem likely.

Reaching out to states by the centre to explain how GST is beneficial to them is an exercise that the Finance Ministry could well do as it is the states that are going to benefit. The guarantee to states that they would be compensated for losses they incur would do a great deal of good for the roll out of GST.

The Bharatiya Janata Party’s efforts in the last 18 months to amend and usher in GST is laudable but then with the mammoth changes that have taken place in the last three months should not belittle the efforts towards GST and the leaders need to gain traction and usher in an early GST that will pave the way for a cashless economy.

A crucial component for the realisation of GST roll out in April depends on the budget. If there are no changes in the rates of excise duty and services tax on products and services, it would make it easy for the easy implementation of GST. All the hard work of the last one and a half years to bring the GST to the brink of implementation cannot and should not be scuttled. What it needs is just a push and a shove.

Should NRIs be gung ho about a clutter-free tax highway?

The winds of change are sweeping India as far as the Goods and Service Tax (GST) is concerned as multiple level taxes would be subsumed under a simple one tax structure. Should the Non-Resident Indians (NRIs) be jumping with joy? Not yet. 23 states in India ratified the GST bill but it would take a while before the system is in place. However, there is something not just for NRIs but everyone in India too to cheer about.

Firstly, GST in its new avatar is expected to drive demand and reduce cost by 10 % and once implemented the unorganized sector would come under a uniformed tax base. For NRIs, there will be less tax harassment and easier compliance for NRI businesses. It will free manufacturers from the burden of multi-level taxes as the tax would be levied only at the destination.

To explain in a simplistic way: Unlike in the past, all taxes would be collected at the point of consumption which would include both central as well as state government taxes. What it essentially means is that a consumer would not be paying tax on tax which was the case before.

For NRIs who export goods from India, stand at an advantage as they would no longer have to flex muscles at multiple levels. The advantage of a single market reduces cost and time, reduces paper work and according to estimates over a period of time, the impact would be such that it would add 2 to 2.5 % to GDP and increase exports to the extent of 10 to 14 %.

The impact on companies is direct as lowers tax burden and improves profit margin for some. There would be no distinction between product and service for tax, a uniform tax across the nation would ease of doing business and smooth movement of products across states is being seen as a boon.

Lower transit time would result in higher truck utilization and a seamless inter-state flow of goods is expected to give a fillip to the logistics sector.


The road to GST Bill

➤ It all started during Vajpayee’s regime in 2000 and paved the way for serious discussions.

➤ By 2004, the Kelkar task Force suggested for a comprehensive GST.

➤ In 2007, an empowered committee of state finance ministers started working on preparing a roadmap and in the same year in the month of November a report was submitted.

➤ In 2008, the final report was submitted.

➤ In 2009, the first discussion paper was released by the Empowered Committee.

➤ In 2010, the then Finance minister mentioned about GST.

➤ 2011 was a landmark year as 115th amendment bill was introduced in the Lok Sabha for levy of GST on all goods or services except for specified goods.

➤ In 2013, the Empowered Committee rejected the government’s proposal to include petroleum products.

➤ In 2014, 122 amendment bill was passed in Lok Sabha for levy of GST which enabled the introduction of GST by April 2016.

➤ On August 3, 2016, 23 states in the country ratified the GST bill.