Ketan ,
Following mails bounced back !
Can you pl forward to Shri Karan Adani ?
Warm Regards,
Hemen Parekh
+91 98675 50808
From: Hemen Parekh
[mailto:hcp@recruitguru.com]
Sent: 03 May 2017 10:14
To: karan.adani@adani.in
Cc: ketan.doshi@adani.in; hcp@recruitguru.com
Subject: LOW COST ECONOMY
Sent: 03 May 2017 10:14
To: karan.adani@adani.in
Cc: ketan.doshi@adani.in; hcp@recruitguru.com
Subject: LOW COST ECONOMY
Dear Karan :
In Economic Times ( 05 April 2017 ) , you are quoted
in an interview , as follows :
“ …. A focus on CLEANER FORMS of
ENERGY , will shave off operating costs by as much as 10-15 % of APSEZ “
Energy is an important INPUT COST
What we need is a concerted effort to reduce costs of
all other INPUTS as well , to turn India into a LOW COST ECONOMY
In this context , you may like to go through my
following blog :
With Regards,
hemen
parekh
(
M ) +91 - 98,67,55,08,08
Sunday, 30 April 2017
Everything Else being Equal
WHAT ?
· Last week , Donald Trump reduced
Corporate Income Tax from 35 % to 15 % for American companies
· Earlier , UK had announced reduction
in Corporate Tax from 30 % to 20 % . Several EU countries are planning similar
reductions
· Closer at home , in his last budget ,
Shri Arun Jaitleyji had reduced Corporate Tax from 30 % to 25 % , for companies
with annual revenues of less than Rs 50 crore
· News reports say that the Finance
Ministry is considering to extend this benefit to companies with revenues of
less than Rs 500 crores , in the forthcoming budget
There is sufficient evidence to show that :
· Lower tax rates lead to better tax
compliance and higher , overall tax collections
· Lower tax rates also result in
expanding the tax-base ( of tax payers )
This phenomenon assumes significance in
view of the following declaration by Shri Hasmukh Adhia , Union revenue Secretary , last
Saturday :
“ Close to 9 lakh registered companies
have not been filing annual returns with the Ministry of Corporate Affairs (
MCA ) and are a potential source of money laundering
Focus should be now on technology .
There should be no need to call anybody a thief. The machine should itself catch
the thieves “
WHY ?
· To attract investment ( both local as
well as Foreign ) in Mfg / Services / Infrastructure ( by enabling
companies to plough back increased profits )
· To generate jobs for millions of
unemployed youth
· To prevent companies from going abroad
to make more profits in countries where tax rates are lower
· To make companies globally competitive
· To increase share of international
trade by increasing exports
WISHFUL
THINKING ?
Not entirely !
But , by itself , lowering of Corporate
tax is not a “ sufficient “
condition for achieving the five “ Objectives “
listed above
For sure , no company hires more number
of people than it needs , just because it can now “ afford “ ( due to bigger
profits ) !
If we are smarter than those other
countries , we should link lower Corporate Tax liability with each “ ADDITIONAL UNIT OF NEW JOB CREATION “ , as explained in :
Incentivizing Employment ? ( 24 Aug
2016 )
NEXT :
By “ Globally Competitive “ , I suppose
, Economists ( - and Politicians ? ), mean :
Creating a LOW COST ECONOMY
That is not going to happen just because
of “ LOW CORPORATE TAX “ !
It will happen only when we implement
measures to facilitate “ LOW INPUT COSTS “
Inputs of all kinds as explained in :
· Solar Power at Rs 1 per Kwh ? ( 29 Jan
2017 )
--------------------------------------------------------------------------------------------------------------------------------------
· One Up on Donald Trump ? ( 16 Dec 2016
)
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· Automation is Inescapable ( 30 Nov
2016 )
--------------------------------------------------------------------------------------------------------------------------------------
· How to break the Vicious Circle ? ( 03
July 2016 )
--------------------------------------------------------------------------------------------------------------------------------------
· Level Playing Field ? ( 11
June 2016 )
--------------------------------------------------------------------------------------------------------------------------------------
· Back Factory of the World ? ( 09 Sept
2016 )
--------------------------------------------------------------------------------------------------------------------------------------
· Create Wealth to Create Jobs ( 26
Feb 2014 )
If there is a political will , India can
beat the menace of “ Anti-Globalization /
De-Globalization “
, by turning itself into a LOW COST
ECONOMY
By itself , reducing Corporate Tax will not take us
very far !
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