A VIRTUOUS CIRCLE ?

Dear Shri Jaitleyji ,

I submit my following suggestion for your consideration

with regards ,

hemen  parekh

hcp@RecruitGuru.com

0 - 98,67,55,08,08

Mumbai

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For over two years now , I have been advocating ,

>   " Inverse Taxation Regime " both , for Personal Income Tax as also for Corporate Tax

       The more you earn , the less tax ( rate on next higher slab ) you pay

>   For Corporate , the more people you employ , the less tax ( rate on next higher slab ) you pay

>   Even total abolition of Personal Income Tax

There are over a dozen Countries where there is  NIL  personal Income Tax

So , there is a precedent that this can work  !

If Personal Income Tax was to be totally abolished , what can / may  happen ?

*   There will be no incentive for tax evasion / avoidance 

     This will be a permanent FULL STOP to future generation of Black Money

*   All payments will be received by cheques and deposited in Bank Accounts- digital banking on its way ?

*   All stashed away Black Money will , somehow , on its own , find its way in bank accounts, - including Black Money lying in Foreign Banks , making SIT redundant !

     This is the ONLY WAY , NDA  government can redeem its promise !

*   Savings rate will go up dramatically

*   That will lead to greater purchasing power for all people

*   Leading to higher domestic consumption of FMCG / Consumer Durables

*   This will result in huge collection of GST , offsetting revenue losses

*   Demand will go up , boosting manufacturing

*   With rise in manufacturing , sub-contracting / outsourcing will increase , giving a big boost to MSME sector 

*   If manufacturing goes up , employment / self-employment ,  will go up

*   For a change , we as a Nation , will learn to celebrate , 

     #    Wealth Creation as a means to reduce poverty

     #    World-size Companies to take on the World

*   There will be less pressure on demands for higher salaries / wages

*   If salaries / wages do not rise , inflation will ease

*   Cost of manufacturing too , will go down

*   Era of " Low Cost Economy " will set in ( VIRTUOUS CIRCLE ? )

*   Savings will move from gold / land to Financial Assets

*   With a low cost structure , our products / services  will become , internationally competitive and exports will go up

*   That will improve our current negative Trade Balance / CAD

*   This ( abolition of Personal Income Tax ) should be coupled with SPVs for 

     #    Infrastructure Projects ( especially Smart Cities / Corridors etc )

     #    Educational Institutions

     #     Skill Development Institutions

     #     Health care Facilities

     #     Solar Power ( Eqpt Mfr / Generation / Transmission / Distribution )

     #     Digital India ( Broadband ) Network

     No questions must be asked as to the source of money invested in such SPVs

    All income ( Corporate Income or Personal Income by way of dividends / interests etc ) arising out of investments made in such SPV , must be tax-exempted

SPVs , themselves , must not need to pay any taxes for 10 years 

*   What else  ?

I hope our newly constituted " Niti Ayoga " will examine my suggestion and guide framing of  

 >    2015 Central Budget NITI 

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hemen  parekh / Jan 05 , 2015

www.hemenparekh.in

From: Hemen Parekh [mailto:hcp@recruitguru.com]
Sent: Tuesday, July 08, 2014 4:04 PM
To: 'pjamwal@gmail.com'
Cc: 'ajaitley@sansad.nic.in'; 'ajaitley@del5.vsnl.net.in'
Subject: Day After Tomorrow

Central  Budget  :  2014

Dear Shri Arun Jaitleyji,

Even as you proceed to present Central Budget to Lok Sabha on 10 July 2014 , please look out the window of your car and see the " Poor " people on Delhi's footpath

Then , like Mahatma Gandhi ask yourself,

"  Whatever budget proposals that I am about to present , will these bring a smile to the faces of these poor  ?

363 million poor Indians , who eke out a survival on expenditure of Rs 32 ( rural ) or Rs 47 ( urban ) per day  ?  (  $0.5 - 0.8 / day  )

For a family of 4 , that works out to , Rs 3840  -  Rs 5640 per month

(  $ 64  -  $ 94 per month )

May be the head of the family manages to earn Rs 2,000 per month , doing odd jobs , here and there

The rest of the income must be coming thru ,

*  Wife scavenging the garbage heaps for discarded plastic bags / bottles

   ( when she is not salvaging discarded food  !  )

*  Children begging on the streets ( you will see them as you drive to Lok Sabha )

Now if,

*   Our population keeps growing at 15 million per year

*   Inflation keeps rising at 10 % per year, necessitating raising " Poverty

     Limit " by 10 % per year

Then ,

*   How many more people will get added to "Poor "population, every year ?

May be 5-7 million/year  ?  25-35 million by 2019 ? Taking the total to 400 million  ?

Mr Jaitley ,

Can you listen to their anguished cries ?

They are " begging " you to create jobs for them , so that they can work hard and earn an honest / decent income , which can lift them above that wretched " Poverty Line "

They don't want your dole-outs / subsidies for food / LPG / Kerosene etc  !

They don't want to remain dependent on Sarkaar - Maa Baap , for ever  !

Sir ,

Can you ( ie Central Government ) give them jobs ? To even 50 million / year  ?

Assuming that creating ONE job calls for an investment ( in fixed assets + working capital ) , of Rs 1 million ( Rs 10 lakhs ) , you need,

* Rs 50 MILLION * MILLION , every year  !

And  YOU  just don't have that kind of money  !

Even as  { Rs 500 MILLION * MILLION  }  of Black Money is locked up in un-productive assets , all over the country  !

The only way you can create those 50 million jobs / year , is to enable these Black Monies to turn into WHITE MONEY and get channeled into Infrastructure / Manufacturing / Services etc

And the only way you can do is to ,

*  Introduce Amnesty Scheme   ( now / immediately )

*  Introduce INVERSE TAX REGIME  ( in 2015 Budget )

I have sent these proposals to Shri Narendra Modi / Shri Murli Manohar Joshi / Shri Nitin Gadkari etc , during the past 8 months

*  hemen  parekh  ( 08 July 2014 / Mumbai )