DEAR FINANCE MINISTER- PART I
I have a few points to make as a common man for you to consider in policy making:
• Flat Income Tax rate of 10%: I think you are trying to implement it this time. This is a step in right direction. This will free govt machinery who do all the calculations and monitoring so that everyone pay taxes in time. Calculation of 10% is simple- everyone can file it easily, even villagers. Also more and more people will try to get as much benefit as possible of declaring white money as it will not also pinch them. Black money economy will reverse in India and in the next 5 years much of white money will come and compensate any revenues losses.
• The biggest bane in the country is CORRUPTION. Find ways to curb it otherwise why should an honest tax payer pay taxes when he knows that the NETA-BABU-BUSINESSMAN nexus will take away all the money.
• Infrastructure is built once in a lifetime as it many costs attached to it. Please see to it that there is proper audit on the money spent on the quality of the infrastructure created and it whould be world class, not which gets deteriorated in 10 years which is according to me the greatest danger as I travel across the country and see the condition of the road, highways and bridges just built 5 years ago which are showing vicious cracks and they don’t seem to last long.
• Manipulation of balance sheets: Businessman manipulate and inflate their balance sheet to do banking for the nest year following year again show bigger turnover to collect bigger amount from the market. Means, dig a bigger hole, fill up the smaller hole and look for another bigger hole. This valuation and banking game, I am sure is very well known to you, Satyam case and after that overhaul of ICFAI norms and SEBI norms have been able to curb this menace or not, I am not sure Please see to it that in future bankers, Auditors, SEBI and other government regulators keep a close watch on all companies.
• Why don’t you promote small businessman so that entrepreneurship gets a fillip. You know that even if you give money to bigger corporates or the benefits you are allotting to the big business every year in the budget, it will go down from the govt coffers only and much of it will find unethical routes, not reach whwere intended or go down the drain. Why not at least make give a try to entrepreneurship and make easy money available to small innovative men with brilliant ideas or those people who want to do their own business but cannot provide you big turnovers or collaterals for banking. Why not help them?
• For cost cutting why dont you make other Taxation calculations simple which are any way clerical in nature, be it Income Tax, Sales Tax, Customs, Excise, etc. Make it simple so that business themselves do it, it will save time both for business as well as for government also. Instead, try to plug the loopholes.
• It is the boom time for real estate, why not lease out or sale excess real estate available with all the PSUs and govt offices in India? I think there will not be much need of privatisation if you start cost cutting and revenue generation along these lines. PSU executives are also brilliant and that is why you will find them in all the big corporate,s higher-ups. Dont sell cheap your assets to corporates, who, anyway will sell them later on to some other party on a huge profit after milking them for sometime.
• People taking their personal vehicles to other state should not be made compulsory to pay taxes again in the other state. What is the need of double taxation if he has already paid the taxes? Just the Registration number change is OK.
• There are too much paper works on the border check Posts for genuine transporters also, which not only kills valuable time at the check posts, it also encourages corruption, much fuel is wasted, unnecessary traffic jams are created, un necessary pollution is created outside city’s check posts- all in the name of checking and allowing the goods only with proper permits to enter. Why cant there be easier way for hassle free transport of goods and services all over India.
• The service tax slabs create problem in calculating the exact service tax to be paid to the government and also the clarity who should collect and pay-why cannot a uniform rate and fixe3d responsibility be ascertained for service tax. I am sure the thinking is also on for single goods and service tax only which will be fine but it should also address the concern raised.
• Export benefits: I don’t understand the logic of earning foreign exchange now in this regime. Yes there was time when the foreign reserves were very meager but now do you find this as important that you are bent on giving benefit to exporters of any type? This is not to say to completely do away with all the benefits, as it will create havoc in the country and entire export industry in India will collapse but still there should be adjustments as to which industry has to continue getting benefits for strategic needs of the country and people and which industry should be deleted from the list. I give you a latest example. Recently I had been to Cotton Exchange Building where all big Cotton and textile players old and new have their offices. And see what they are doing. They are exporting tons and tons of raw cotton to, hold on, China! And then after getting that cotton manufactured into cloth it is imported back to India. What is the logic and the benefits to Govt. We in India are not getting quality cotton and we are exporting to China for export benefits! And again importing cloth to give back the benefits! The same thing applies with Iron ore and other minerals and raw materials exports Same thing got also applied with regards to commodities and staples like sugar, dals, rice, etc and we are seeing the havoc of scarcity and price rise. Is it planning?
• Development agenda: The present unrest in Mumbai, Maharashtra, Madhya Pradesh, Delhi and other states too among the local public about the outsiders coming in and taking up odd jobs has thrown upon a challenge to policy makers at national level. You are the controller of Finance in India, why do you not make it so tough for the leaders and bureaucrats of poorly governed and unaccountable states so that the do not neglect the development of these states. Cant they be made accountable to all the money which is allotted to them goes to the development of the stae and not into the cofgfers of individuals? You can see to it, you have different tools available with you, to monitor the money flow and see that the leaders and bureaucrats develop the states so that the people from these states do not have to migrate to other states. Even the money given to MPs and MLAs for the development of their constituency is through you, it should also be seen to be used at right place. Also the people here are very intelligent and hardworking and that is why they are successful in other states or abroad; why not provide the atmosphere, money, training opportunities, markets, storage, at the state, or district, or block or Panchayat level itself so that they don’t migrate and add to the problems of already bulging cities in India.
To end, this Part I, The common and honest man grinds, not higher ups. Shouldnt they?
Please ponder on it.
Thanks and warm regards and a very happy and prosperous new year.
I have a few points to make as a common man for you to consider in policy making:
• Flat Income Tax rate of 10%: I think you are trying to implement it this time. This is a step in right direction. This will free govt machinery who do all the calculations and monitoring so that everyone pay taxes in time. Calculation of 10% is simple- everyone can file it easily, even villagers. Also more and more people will try to get as much benefit as possible of declaring white money as it will not also pinch them. Black money economy will reverse in India and in the next 5 years much of white money will come and compensate any revenues losses.
• The biggest bane in the country is CORRUPTION. Find ways to curb it otherwise why should an honest tax payer pay taxes when he knows that the NETA-BABU-BUSINESSMAN nexus will take away all the money.
• Infrastructure is built once in a lifetime as it many costs attached to it. Please see to it that there is proper audit on the money spent on the quality of the infrastructure created and it whould be world class, not which gets deteriorated in 10 years which is according to me the greatest danger as I travel across the country and see the condition of the road, highways and bridges just built 5 years ago which are showing vicious cracks and they don’t seem to last long.
• Manipulation of balance sheets: Businessman manipulate and inflate their balance sheet to do banking for the nest year following year again show bigger turnover to collect bigger amount from the market. Means, dig a bigger hole, fill up the smaller hole and look for another bigger hole. This valuation and banking game, I am sure is very well known to you, Satyam case and after that overhaul of ICFAI norms and SEBI norms have been able to curb this menace or not, I am not sure Please see to it that in future bankers, Auditors, SEBI and other government regulators keep a close watch on all companies.
• Why don’t you promote small businessman so that entrepreneurship gets a fillip. You know that even if you give money to bigger corporates or the benefits you are allotting to the big business every year in the budget, it will go down from the govt coffers only and much of it will find unethical routes, not reach whwere intended or go down the drain. Why not at least make give a try to entrepreneurship and make easy money available to small innovative men with brilliant ideas or those people who want to do their own business but cannot provide you big turnovers or collaterals for banking. Why not help them?
• For cost cutting why dont you make other Taxation calculations simple which are any way clerical in nature, be it Income Tax, Sales Tax, Customs, Excise, etc. Make it simple so that business themselves do it, it will save time both for business as well as for government also. Instead, try to plug the loopholes.
• It is the boom time for real estate, why not lease out or sale excess real estate available with all the PSUs and govt offices in India? I think there will not be much need of privatisation if you start cost cutting and revenue generation along these lines. PSU executives are also brilliant and that is why you will find them in all the big corporate,s higher-ups. Dont sell cheap your assets to corporates, who, anyway will sell them later on to some other party on a huge profit after milking them for sometime.
• People taking their personal vehicles to other state should not be made compulsory to pay taxes again in the other state. What is the need of double taxation if he has already paid the taxes? Just the Registration number change is OK.
• There are too much paper works on the border check Posts for genuine transporters also, which not only kills valuable time at the check posts, it also encourages corruption, much fuel is wasted, unnecessary traffic jams are created, un necessary pollution is created outside city’s check posts- all in the name of checking and allowing the goods only with proper permits to enter. Why cant there be easier way for hassle free transport of goods and services all over India.
• The service tax slabs create problem in calculating the exact service tax to be paid to the government and also the clarity who should collect and pay-why cannot a uniform rate and fixe3d responsibility be ascertained for service tax. I am sure the thinking is also on for single goods and service tax only which will be fine but it should also address the concern raised.
• Export benefits: I don’t understand the logic of earning foreign exchange now in this regime. Yes there was time when the foreign reserves were very meager but now do you find this as important that you are bent on giving benefit to exporters of any type? This is not to say to completely do away with all the benefits, as it will create havoc in the country and entire export industry in India will collapse but still there should be adjustments as to which industry has to continue getting benefits for strategic needs of the country and people and which industry should be deleted from the list. I give you a latest example. Recently I had been to Cotton Exchange Building where all big Cotton and textile players old and new have their offices. And see what they are doing. They are exporting tons and tons of raw cotton to, hold on, China! And then after getting that cotton manufactured into cloth it is imported back to India. What is the logic and the benefits to Govt. We in India are not getting quality cotton and we are exporting to China for export benefits! And again importing cloth to give back the benefits! The same thing applies with Iron ore and other minerals and raw materials exports Same thing got also applied with regards to commodities and staples like sugar, dals, rice, etc and we are seeing the havoc of scarcity and price rise. Is it planning?
• Development agenda: The present unrest in Mumbai, Maharashtra, Madhya Pradesh, Delhi and other states too among the local public about the outsiders coming in and taking up odd jobs has thrown upon a challenge to policy makers at national level. You are the controller of Finance in India, why do you not make it so tough for the leaders and bureaucrats of poorly governed and unaccountable states so that the do not neglect the development of these states. Cant they be made accountable to all the money which is allotted to them goes to the development of the stae and not into the cofgfers of individuals? You can see to it, you have different tools available with you, to monitor the money flow and see that the leaders and bureaucrats develop the states so that the people from these states do not have to migrate to other states. Even the money given to MPs and MLAs for the development of their constituency is through you, it should also be seen to be used at right place. Also the people here are very intelligent and hardworking and that is why they are successful in other states or abroad; why not provide the atmosphere, money, training opportunities, markets, storage, at the state, or district, or block or Panchayat level itself so that they don’t migrate and add to the problems of already bulging cities in India.
To end, this Part I, The common and honest man grinds, not higher ups. Shouldnt they?
Please ponder on it.
Thanks and warm regards and a very happy and prosperous new year.
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