RE: BUDGET IDEAS ?

On 05 Feb 2016 , Economic Times carried a news report titled :

Employers May Get Sops for Creating Extra Jobs

As per this report , NDA govt is expected to announce following incentives for employers who create new jobs :

*  30 % tax exemption for units that create an additional 2 % jobs

*  Alternatively, the hirer could be given a 125 % rebate on provident fund contributions

*  Availability of easy, cheap credit through interest subvention ( Subsidy ? )

Even as I await the budget speech of Shri Jaitleyji on 29 Feb for full details , I wish to thank Shri Narendra Modiji for considering the CORE of my following proposal sent to him on  06 Nov 2014 : 

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To complete this ECO SYSTEM , we  need to think " Out of the Box " in the matter of Corporate Tax Regime , as well

Current trend in industry , all over the world , is to

>  Add highly productive , very expensive machinery to " Automate " all

    manufacturing processes

>  Reduce manpower by increasing " Capital / IT Intensity "

>  Hire low skilled workers by transferring higher " Skills " to machinery

>  Outsource manufacturing to countries where manpower is cheap

>  Move out of " Manufacturing " and shift to " Services "

India cannot swim against this World-wide Trend

We must innovate,  to not only survive but to grow in this scenario

Here is my suggestion :

Set in motion , " INVERSION  of JOB  REDUCTION " regime , under which ,

"  The more jobs a company creates , the less Corporate Tax it pays "

Example :

> Up to employment of 100 persons  ............................... 30 %

> 101  -  500 persons....................................................  25  %

>  501 - 1000 persons ...................................................  20  %

>  1001 - 5000 persons ..................................................  15  %

>  5001 - 10,000 persons ................................................. 10  %

>  Above 10,000 persons .................................................    5  %

Let us celebrate those who provide employment to large number of persons

Let us celebrate BIGNESS

Let us create hundreds of  WORLD SIZE  corporations and take on the World

On top of this , provide additional tax - breaks ( discounts ? ) to corporate as follows :

> Average Age of Employees at 30 years.......................  1 %

> Ave age at 25 years.................................................  2 %

> Ave age at 20 years .................................................  3 %



Of course , very strict and transparent rules will need to be framed to

compute,


>  Number of Employees  ( Permanent - not probationers / trainees )


> Average Age ( as on 31 March of Tax year )......etc




But , here is an important aspect of this , " Incentivize  Job  Creation  "  Scheme :


Today's labour laws make it extremely difficult - if not impossible - for employers to layoff / retrench workmen , if demand shrinks


Hence , to take advantage of this Scheme , employers are unlikely to hire thousands of youth , if they cannot easily trim the workforce , to match the shrinking demand


So , an important corollary of this Scheme is to modify our existing Labour Laws to facilitate layoff / retrenchment , when situation so demands , while protecting the interests of the workmen concerned

And , last but not the least , permit each and every candidate - and the political parties as well - to spend ANY AMOUNT on election campaigns , without any restrictions as also accept any amount of Corporate Donations

by cheque

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www.hemenparekh.in / blogs

07  Feb  2016

hcp@RecruitGuru.com

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

Mumbai

Warm Regards,

Hemen Parekh

(M)=91 – 98,67,55,08,08

From: Hemen Parekh [mailto:hcp@recruitguru.com]
Sent: Wednesday, February 03, 2016 11:04 AM
To: Hemen Parekh; 'shaktikanta.das@nic.in'; 'narendramodi1234@gmail.com'
Cc: 'Hasmukh Adhia'; 'ajaitley@del5.vsnl.net.in'; 'jayant.sinha19@sansad.nic.in'; 'piyush.goyal@gov.in'; 'nitin.gadkari@nic.in'; 'spprabhu1@rediffmail.com'; 'kalraj@kalrajmishra.com'; 'bandaru@sansad.nic.in'; 'amitabh.kant@nic.in'; 'smritizirani@nic.in'; 'nsitharaman@nic.in'
Subject: BUDGET IDEAS ?

TIME    IS   NOW  !

Quoting from a news-report ( HT / 02 Feb 2016 ) :

At a recent World Economic Forum summit in Davos, Shri Arun Jaitley had said , India needs some additional growth engines , indicating that the focus would shift to reviving PRIVATE investments

Senior Govt officials said," The incentives could be in the nature of TAX CONCESSIONS "

DIPP Secretary , Amitabh Kant added ,  " For the Indian economy to continue to grow, it has to be on the back of DOMESTIC  PRIVATE  SECTOR  investments ..... for a continuous robust growth , investments from the PRIVATE  SECTOR , have to be ramped up "

Let us not keep fooling ourselves  !

Prey  !  From where do the so called PUBLIC SECTOR investments come from ?

It is PRIVATE MONEY  !  Just re-routed by governments , using yours and mine tax money  !

That is, whatever gets left ( of that tax money ) after expenses of running the government

Apart from that ,

*  Re-routing tax money through PUBLIC SECTOR investments, is a very slow / cumbersome process

*  Persons who manage those investments are rarely made " accountable " for profits / dividends

*  Since tax-payers do not get immediate benefits from such re-routing , it gives rise to tax evasions

*  Tax evasions lead to generation of BLACK MONEY and CORRUPTION

And no political party would advocate " raising of taxes " so that , on 29 Feb 2016 , Shri Jaitley could allocate

*  ONE TRILLION DOLLARS ( Rs 70 lakh*crore ) each to , Piyush Goyal / Suresh Prabhu / Nitin Gadkari / Ravi

    Shankar Prasad / Uma Bharati / Venkaiah Naidu / Rajiv Pratap Rudy etc

and

*  TEN TRILLION DOLLARS each to , Manohar Parikar ( Defense ) and Nirmala Sitharaman ( Make in India )

WHERE  CAN  WE  FIND  THAT  GROWTH-ENGINE  ?

In my email ( 08 April 2014 ) , I wrote to Shri Narendra Modi :

*  Create Infrastructure SPVs

*  Allow people to invest in these directly and make " returns ( interests / dividends ) " , tax free

*  Amnesty Scheme for funds invested in such SPVs ( no questions asked as to the source of funds invested )

*  An " INVERSE  TAX " regime for Personal Income Tax  ( with decreasing tax-rates for each higher slab )

Later emails recommended :

*  Encourage CREATION of WEALTH by total abolition of Personal Income Tax

*  Decreasing Corporate Income Tax , linked to number of permanent employees

I hope Shri Jaitleyji does not treat these as POPULIST measures and keep tinkering with  80ccg /  80dd / 80ddb / 80e / 80g /80gg /80ggc / 80tta  / 80u / 24b ....etc  !

Time now is for embracing   TRANSFORMATIONALIST   measures

It is time for the Butterfly to emerge from its cocoon  !

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

www.hemenparekh.in / blogs

03  Feb  2016

  

    

Warm Regards,

Hemen Parekh

(M)=91 – 98,67,55,08,08

From: Hemen Parekh [mailto:hcp@recruitguru.com]
Sent: Tuesday, February 02, 2016 10:55 AM
To: Hemen Parekh; 'shaktikanta.das@nic.in'; 'narendramodi1234@gmail.com'
Cc: 'Hasmukh Adhia'; 'ajaitley@del5.vsnl.net.in'; 'jayant.sinha19@sansad.nic.in'; 'piyush.goyal@gov.in'; 'nitin.gadkari@nic.in'; 'spprabhu1@rediffmail.com'; 'kalraj@kalrajmishra.com'; 'bandaru@sansad.nic.in'; 'amitabh.kant@nic.in'; 'smritizirani@nic.in'; 'nsitharaman@nic.in'
Subject: HOW TO WIN STATE ELECTIONS

NEVER   MORE   IMPORTANT

 

For BJP , winning the upcoming State Elections ( West Bengal - Tamilnadu - Assam - Kerala - Pondicherry ) in 2016 , is very important

Currently , these are all non-BJP states , with a combined total of :

*  825  MLAs ( of which , only  5 MLAs belong to BJP  !  )

*    52  Rajya Sabha Members

For BJP , winning is important because of the Economic Reforms getting stalled in Rajya Sabha , where it lacks a majority

As far as the citizens of all these States are concerned , having a BJP government in their States can make a big difference to their economic progress , due to much better coordination with the BJP-led Central Government

But , while campaigning , BJP cannot use this argument to win a popular mandate  !  We know why  !

However , of all the political parties contesting , ONLY  BJP hold a  TRUMP  CARD  !

To win , all that Amitbhai Shah would like is for Shri Arun Jaitleyji to make following Budget announcement on 29 Feb 2016 ( before the Model Code of Conduct , kicks in ) :

"  Starting 01 April 2016 , Personal Income Tax stands abolished for SC / ST / OBC / Dalit and other Economically Backward Communities ( EBC = persons with annual income below Rs 5 lakhs ) "

Now , which political party dare oppose such a Poor-Friendly measure  ?

If any party does , it is bound to lose the votes of these communities !

And the beauty of this " Winning Strategy " is :

Hardly any adverse impact on revenues of the Central Government  !

Of some 3 crore individual tax-payers , no more than 1 crore , may belong to such communities

And together, they might be contributing no more than 10 % of the Personal Tax Revenue of Rs 2.5 lakh*crores  !

Now , very likely , Shri Jaitleyji will turn around and ask Amitbhai Shah :

"  Would not this lead to similar demand ( total abolition of Personal Income Tax ) , from rest of the Voters ? "

Of course , it would !

But then , Amitbhai would say :

"  Right now , we have a war to be won . In love and war , everything is fair  !

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www.hemenparekh.in / blogs

02  Feb  2016

Warm Regards,

Hemen Parekh

(M)=91 – 98,67,55,08,08