Slowdown, Employment, Environment and Tax Concessions

Priyani Gupta · Jun 11, 2025

amit2011 said:
Slowdown, Employment, Environment and Tax Concessions

By: Amit Bhushan Date: 10th Sept. 2019

With the news media roping in the Industry leaders (or may be vice versa) on concerns regards slowdown, the expectations of tax concessions are being built up. These would perhaps do some benefit to employment, it is assumed. However most such tax benefits are designed to push consumption and it is believed that if a consumption binge kicks-off, that would take care of growth and employment. In practice, it is about where the consumption is going and if the same is employment intensive or not, however the media and economist would not spare a concern for the same as the industrialist would just want some support to push their wares in practice with scant regards for employment and/or things such as environment etc. The government does have a role and this is to be able to look beyond and device ways for an effective intervention. And therefore for evolving policies, it must look at domestic factors in a wholesome manner and evolve economic models which are effective in domestic conditions.

Perhaps it is time to push for a refurbishing industry business to be supported with some effective designed tax concessions. The government may give support to industry say like automobile or consumer durables for replacement sales (say -3% lower GST) and also a lower rate for widgets that make use of refurbished parts/components (say -6% lower GST for these). The replacement may further be ensured for more environment friendly goods or say better mileage automobile. Some economist, married to proven Western models may not be able to absorb such radical ideas, however these still need to be debated in domestic context as the Western models have not proven to be a nirvana. The result can be growth of an organized sector which buys out old widgets and extracts components/parts and make use of the same on the back of a lower duty. This would be supportive of environment and also of domestic employment. This may also help to beat some effects of the slowdown in the near term and growth in consumption may perhaps be able to take care of the lower tax rates. The industry would also be nudged to make fresh investments to support such units who would help buy out old widgets and make most economic use of the parts and dispose-off the waste in eco-friendly manner.

With a large market of people with low purchasing power, what is needed is new design skills that help lower the cost as well as making strides towards environment friendly. India is already looking for alternative for single use plastics, but what it needs to look into is if the components of automobiles and other durables or widgets can be re-used. This would call for new designs for these widgets and components. While the component industry may not experience that kind of growth as say in case of the use and throw economy, however given that the finished products can perhaps be cheaper, so more people would perhaps be able to afford such goods leading to higher consumption. The readiness of the domestic industry and evolution of the ecosystem would require development of the mindset and innovations in this direction at the first place, before such models may come in vogue. Further such models may be welcome in other emerging markets, who have not been able to afford goods in erstwhile ‘use and throw’ economy. The latter may however be a factor for demand in case such regime/systems and processes are proven to be a success. It may help if India with its large markets helps to demonstrate that some of such products/systems can perhaps be adopted. Let the ‘Game’ evolve…..

Thank you for presenting a thoughtful and forward-looking article that touches upon pressing economic realities while nudging toward sustainable and inclusive growth. Your argument for a more domestically responsive and environmentally conscious economic model is timely and deserves deeper contemplation. However, to critically and practically appreciate the proposition, we must explore both its visionary potential and its inherent challenges.

It is indeed logical to question the efficacy of traditional tax concessions merely designed to stimulate short-term consumption. As you rightly pointed out, these incentives often serve industry interests more than national employment or environmental objectives. A blind push for consumption does not automatically translate into inclusive growth unless the type of consumption is both employment-intensive and ecologically responsible. We cannot ignore the fact that mass-produced goods, often assembled overseas or in automated factories, add little to domestic job creation.

Your suggestion to incentivize the refurbishing industry through differentiated GST rates is commendable. Not only does this align with the principles of circular economy, but it could also create new job avenues in repair, design, logistics, and quality control—particularly beneficial for semi-skilled and rural labor forces. It also resonates with India’s growing consciousness towards climate action and sustainable resource management.

That said, such a policy model must consider certain practicalities. Refurbishing at scale requires standardization, quality assurance, and a strong supply chain network—elements that are presently underdeveloped in India. Moreover, consumer perception of refurbished goods needs a cultural shift. In many parts of India, refurbished still means “used” or “inferior,” which may limit mass market acceptance unless backed by warranty, branding, and government-certified standards.

Additionally, the tax incentives for refurbished goods must be implemented cautiously to avoid potential misuse. For instance, companies might rebrand new products as refurbished to exploit lower tax rates. Hence, regulatory clarity and a digital framework for tracking refurbished goods would be essential.

You are also right in emphasizing the need for product redesign. Encouraging modular design for easier disassembly and reuse will require collaboration between academia, startups, and established manufacturers. However, one must acknowledge that this transition won't be cost-neutral in the short term. It would demand upfront investments in R&D, skill development, and infrastructure—investments that many small manufacturers may find difficult without initial subsidies or public-private partnerships.

Furthermore, while Western economic models have often been imported without full consideration of Indian conditions, dismissing them altogether may also be extreme. Many Western countries are themselves transitioning towards green economies and could offer useful lessons in innovation, waste management, and repair ecosystem building.

In conclusion, your proposition is undoubtedly visionary and grounded in long-term thinking. It deserves pilot implementation and robust debate. But for it to evolve into a scalable solution, India must build the necessary ecosystem—mindset, design innovation, quality control, and governance. Only then can the idea mature from paper policy into ground reality.

#SustainableGrowth #RefurbishingEconomy #GreenIndia #TaxReforms #CircularEconomy #MakeInIndia #InclusiveDevelopment #DomesticInnovation

Dhruv Bindhani · Jun 25, 2025

amit2011 said:
Slowdown, Employment, Environment and Tax Concessions

By: Amit Bhushan Date: 10th Sept. 2019

With the news media roping in the Industry leaders (or may be vice versa) on concerns regards slowdown, the expectations of tax concessions are being built up. These would perhaps do some benefit to employment, it is assumed. However most such tax benefits are designed to push consumption and it is believed that if a consumption binge kicks-off, that would take care of growth and employment. In practice, it is about where the consumption is going and if the same is employment intensive or not, however the media and economist would not spare a concern for the same as the industrialist would just want some support to push their wares in practice with scant regards for employment and/or things such as environment etc. The government does have a role and this is to be able to look beyond and device ways for an effective intervention. And therefore for evolving policies, it must look at domestic factors in a wholesome manner and evolve economic models which are effective in domestic conditions.

Perhaps it is time to push for a refurbishing industry business to be supported with some effective designed tax concessions. The government may give support to industry say like automobile or consumer durables for replacement sales (say -3% lower GST) and also a lower rate for widgets that make use of refurbished parts/components (say -6% lower GST for these). The replacement may further be ensured for more environment friendly goods or say better mileage automobile. Some economist, married to proven Western models may not be able to absorb such radical ideas, however these still need to be debated in domestic context as the Western models have not proven to be a nirvana. The result can be growth of an organized sector which buys out old widgets and extracts components/parts and make use of the same on the back of a lower duty. This would be supportive of environment and also of domestic employment. This may also help to beat some effects of the slowdown in the near term and growth in consumption may perhaps be able to take care of the lower tax rates. The industry would also be nudged to make fresh investments to support such units who would help buy out old widgets and make most economic use of the parts and dispose-off the waste in eco-friendly manner.

With a large market of people with low purchasing power, what is needed is new design skills that help lower the cost as well as making strides towards environment friendly. India is already looking for alternative for single use plastics, but what it needs to look into is if the components of automobiles and other durables or widgets can be re-used. This would call for new designs for these widgets and components. While the component industry may not experience that kind of growth as say in case of the use and throw economy, however given that the finished products can perhaps be cheaper, so more people would perhaps be able to afford such goods leading to higher consumption. The readiness of the domestic industry and evolution of the ecosystem would require development of the mindset and innovations in this direction at the first place, before such models may come in vogue. Further such models may be welcome in other emerging markets, who have not been able to afford goods in erstwhile ‘use and throw’ economy. The latter may however be a factor for demand in case such regime/systems and processes are proven to be a success. It may help if India with its large markets helps to demonstrate that some of such products/systems can perhaps be adopted. Let the ‘Game’ evolve…..

Here’s a concise review for the article:

Review: Rethinking Tax Concessions Amid Slowdown

Amit Bhushan critiques the common approach of using tax concessions mainly to boost consumption without considering employment intensity or environmental impact. He argues for innovative, locally tailored policies, suggesting support for a refurbishing industry with tax benefits to promote reuse of parts in automobiles and consumer durables. This could drive organized growth, create jobs, and benefit the environment. Bhushan stresses that India needs to foster new design thinking for affordable, eco-friendly products that suit domestic needs rather than blindly copying Western models. His fresh perspective calls for a holistic approach to growth that balances economy, employment, and sustainability.

If you want it shorter or more casual, just say!

Slowdown, Employment, Environment and Tax Concessions