Wednesday, 9 April 2014

Manifesto


Don't  Ask  "  How  "   ?

At the bottom of the 42 page Election Manifesto of BJP , released yesterday , I tried to search , if in very small print somewhere , there was a footnote which read ,

"  Please , don't ask how we plan to implement these promises ;
   From where we plan to find all the money to execute these projects "

Here are my back-of-the-envelope estimates of what some of the MAJOR projects might cost :
------------------------------------------------------------------------------------
PROJECT   .................................... Approx Cost ( Rs Lakh * Crores  )
-------------------------------------------------------------------------------------
>  100 Mega Cities........................   90
>  Interlinking of Rivers..................  60
>  Sagar Mala of Ports....................  30
>  Highways ( 25,000 Km )..............  50
>  Housing ( 100 mill units )............   100
>  Rivers Cleaning..........................   10
>  Other Infra Projects....................    100
   * Freight Corridors
   * Gas Grids
   * OFC Network
   * Quadrilateral Bullet Trains
------------------------------------------------------------------------------------
Total ..........................................Rs  430  Lakh Crores
------------------------------------------------------------------------------------
Admittedly , not all of these money will be required in the very first budget that NaMo government ( - of course , only if voted to power ! ) , would present by end June 2014

But a problem does not go away by postponement  !

There is only ONE viable solution to the FUNDING problem , viz:,

>  Union Government must NOT even try to fund these projects  !
There is NO WAY , it can find these kind of money thro taxation  !
There will be a revolt  !

ANSWER

>  Make it possible for the PUBLIC to invest into these projects by " owning "
    these projects - and earn a reasonable " tax-free " return on  investments
    ( Bonds ? ) in these projects

>  Towards  this end , create various INFRASTRUCTURE SPVs

>  Immediately modify  PERSONAL INCOME TAX  regime as follows :
   
    >  Up to  Rs 5  lakhs..................... NIL
    >  5.1  - 10 lakhs.......................  8 %
    >  10.1 - 20 lakhs......................  6 %
    >  20.1  - 50 lakhs.....................  5 %
   >  50.1 - 100 lakhs.....................  3 %
   >  Above 100 lakhs......................  1 %

What is likely to happen with such " INVERSE  TAXATION  " regime  ?


Following few things :


>  Total personal tax payer base will go up dramatically from current 4
     crores tax-payers


>  with this " INVERSE  TAX  REGIME " , there will be no incentive to  evade
    taxes and to generate " BLACK  MONEY  "

    There will be no resistance to accept ALL payments by cheque / electronic
    clearance

    The more you disclose as your income , the less you pay by way of taxes

    ( Of course , incrementally )

>  For a change , we will learn to reward honesty / efficiency / productivity !

    No need to bribe those Income Tax officers  !


>  Suddenly , lakhs of crores of BLACK MONEY will become  WHITE MONEY
   

>  There will be a huge surge in bank deposits ( - even with , the inevitable
    lower interest rates )


>  Banks will be awash with funds to finance businesses / infrastructure
    projects etc , encouraging entrepreneurs / self-employed to set up new
   businesses ( at 2 % interest rates of loans ) and generate millions of jobs


In any case , BJP manifesto promises :

>   Rationalization and simplification of the tax regime - which is currently
      repulsive for honest tax payers   

>  The process of bringing black money to India , what belongs to India , will
    be put in motion on priority

>  Minimize scope for Corruption

Narendrabhai  ,

Here is your chance to ditch the " Historical Baggage " into the Indian Ocean
and come up with an  INNOVATION   that will take India ahead of China  !

*   hemen  parekh  (  08  April  2014  /  Mumbai  )





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