Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Monday, 19 October 2015

Start Ups


Dear Shri Das ,


Today's Hindustan Times ( 19 Oct ) quotes you as follows :

"  Government is working on providing a more enabling eco system for Start Ups.

Start Ups have potential for job creation  "


It goes on to add ,

" He also invited suggestions from the public to improve eco system for start ups "


In this regard , I request you to read my following blog / attachments


After decades of Policy Paralysis , " Increementalist Attitude " will take us no where

To escape the " Time Warp " , we need a " Worm Hole "


with regards ,

hemen parekh

Mumbai



(M) 0-98,67,55,08,08

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FROM  JOB-SEEKERS  TO  JOB  CREATORS

( blog dt 15 Sept 2015 )
-----------------------

How to turn 12 million persons entering our work-force each year from being job-seekers to becoming job-creators ?

At the conceptual level , this was well-answered in BJP poll manifesto as :

" Encourage and empower our youth for Self Employment - incubating entrepreneurship as well as facilitating credit "

How to translate this policy into specific actions ?

May be the clue lies in the following incidence :

After getting a post-graduate degree in engineering from USA , when I returned to India in 1959 , my father took me to meet Shri Manubhai Shah  , the then Minister for Industry in Union Government

My father inquired if Manubhai could give me a job in government

Manubhai answered :

" Chunibhai , I have no job for your son .

  Let him set up a factory and manufacture fractional horse power motors of which India is currently importing some 3000 per year

 We will ,

>    Immediately issue to him , an Industrial License

>    Allot him a factory-shed in Rajkot Industrial Estate

>    Give him a loan of Rs 5 lakhs to buy machinery  "


56 years later , we are better organized / equipped to " Institutionalize " this pioneering thinking


Here is my suggestion :


 Role of MakeinIndia web site



    >  On its web site , list 5000 products that we currently import ( with
        annual import bill / sources / ave landed cost etc )

    >  Invite 1000 leading manufacturing companies of India , to make
        online selection of minimum of 5 items each, for preparing DPR
        ( Detailed Project Reports ) .

         Freely visible online database of who selected which items will avoid
         duplication

         

 Role  of  Manufacturing Companies


    >  Prepare and submit to Ministry of Commerce, at least 5 DPR  by
        Dec 2016 . More the merrier ! Earlier the better !

    >  Each report must carry , name of at least one bank which has
        accepted that as a " Bankable Report " , eligible for funding

    >  Train at least 100 fresh engineering graduates in various
         manufacturing related functions under GET ( Graduate Engineer
         Training ) Scheme  , each year



*   Role of Ministry of Commerce


   >  Publish DPRs on its web site for free downloading


 Role of  Income Tax Department

   >  Give 200 % tax deduction to existing manufacturing units for 2
       years , for employing fresh engineering graduates on their rolls ,
       under :

      " Graduate Engineers Training Subsidy Act - 2015 "
        ( to be enacted )

      This will motivate manufacturing units to impart manufacturing
      related experience to fresh engineering graduates before they
      venture to set up own  MSME factories
     
  >  Admit expenses incurred by manufacturing units for preparation of
      DPR ,under their CSR obligation ( 2 % of ave net profit for 5 years )

  >  Exempt all GET Start Ups ( registered on eBiz web site ) from
      paying Corporate Income Tax for first 10 years of working
     

  >  Exempt all GET Start Ups from GST payment ,  for 10 years



*   Role of Fresh Engineering Graduates


  >  Get GET Training Certificate from employer companies

  >  Download DPR from Commerce Ministry web site

  >  Apply for funding to banks , attaching DPR and GET Certificate

  >  Upon receiving Approval Intimation from bank , apply for various
      permissions on eBiz web site , quoting Bank Approval Number



 Role of ASSOCHAM / FICCI / CII etc

 >  Encourage their manufacturing member firms to take on the
     task of preparation of DPRs and follow up

>   Publish DPR reports on their web sites for free downloading

>   Constitute State-wise " Hand-holding Teams " of retired
     executives having " Manufacturing " experience , to guide the
     local GET applicants in obtaining all permissions from various
     State Authorities



 Role of eBiz web site

  >  To make available in public domain , all investment related
       applications , and progress status of each


 Role of State Governments

  >  To keep track of those eBiz investment applications where
       the State is the proposed manufacturing location

  >   Pro-actively reach out to such applicants for expediting their
       proposals


All of the above need not / must not take months to materialize !

If it takes any longer , millions of India's jobless will overthrow the governments in power !

We don't need an Oracle to tell us what future holds for us !

-------------------------------------------------------------------------

hemen  parekh

16 Sept  2015


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Saturday, 12 September 2015

A NEW ECONOMIC ORDER ? aka " Start Up Act - 2015 "

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You may also call it , " Start Up Act - 2015 "



#   Objectives of the Act

     Every  year , to create 5 million Start Ups , each employing 2 persons , for a total of 10 million new jobs per year



#    Methodology

     *  Instead of Companies Act - 1956 , these Start Ups will be governed by the Start Up Act - 2015

       *  A Start Up can be launched by any Indian citizen under the age of 30 ( covering roughly 65 % of our population )

       *  A Start Up will need to register online on the web site of the Income Tax Department and obtain a unique "Start Up Number "

      *  Although all Start Ups will need to file annual Income Tax returns ( with full disclosure of income / expenses / profits / sources of funds etc ) , it will not be required to pay any Corporate Income Tax for the first 10 years of its existence

     *  A Start Up will be free to raise  funds from any source ( Individuals / Companies / PE funds / VCs / Angel Investors / Religious Trusts etc )

     *  100 % FDI will be permitted in Start Ups

     *  A Start Up can receive loans or equity and be able to accept fixed deposits . It can also give loans to individuals or other Start Ups or invest in other Start Ups by way of equity

    *  There will be no restrictions on what interest ( on loans / FDs ) that a Start Up may pay nor any restrictions on dividends it may declare

        The dividends declared by Start Ups will not attract any Income Tax

    *  As far as the persons / companies etc providing funds to Start Ups ( by way of loans or equity ) is concerned , no questions will be asked re their source of funds




#   What  will  happen  ?


   *  Billions of rupees worth Black Money will flow into these Start Ups - money which is currently lying unutilized or locked up in unproductive assets

    *  If Jan Dhan Yojana could create 200 million bank accounts in 20 months , Start Up Act - 2015 , will create 200 million Start Ups in next 10 months !

        All that led to this World record was , someone suggesting the unthinkable :

" Let us enable poor people to open bank accounts with ZERO bank balance "

Start Up Act- 2015 ", will unleash a similar " Start Up Tsunami "  !


    *  Within 3 months , thousands of Venture Capital Funds will be born , exclusively for funding of Start Ups ( You know who will set up these VCs ! )

    *  With NO Income Tax to be paid , Start Ups will conduct all transactions through cheques ( receipts / payments )

    *  GST  collections will go up

    *  Domestic Savings Rate will go up

    *  Since millions of ( Black Money holding ) individuals / businesses will come forward to fund these Start Ups , lending pressure on banks will go down

    *  Who knows , Start Ups may get into the business of Assets Reconstruction and relieve banks of NPAs !

    *  With locally / domestically stashed Black Money flowing into the economy , our dependence on FDI will go down

    *  Corruption will decline drastically




#   Why  the  need  for  Start Up Act  ?


It is simple

In the past 300 years , we have had different systems of Economic Development , viz:

Communist  /  Socialist  /  Capitalist

There were periods when each worked well - depending upon the geography and the technological environment prevailing during those periods

Today, Internet and mobile apps are pushing the World towards an E - Commerce economy , which covers entire World seamlessly

Tomorrow , Internet of Things ( IoT ) , will tell us what we need to do and when ! Our lives will be dictated by devices !

That will demand a brand NEW SYSTEM of economic development which transcends national boundaries

Old rules / regulations / laws will not help us find jobs for12 million youths entering India's work force each year

An ocean-going " Ship " , cannot traverse galactic distances of Space

Following in the footsteps of Albert Einstein / Stephen Hawking , we need to

"  Bend the Space "

And travel through the Worm-holes !

Using the hologram of the " Start Up Act - 2015 " , we must project our economy into :

"  Distributist Economy ",

which goes beyond the " Communist / Socialist / Capitalist " economies !

That is the ONLY WAY to create a ,

"  New  Economic  Order  / The Start Up Economic Order "

Last - but not the least :

No politician will oppose the unanimous passing of the "Start Up Act - 2015 " , in Lok Sabha or Rajya Sabha

You know why !

-------------------------------------------------------------------------------------

hemen  parekh

13  Sept  2015






  

       






   





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