But , Where is the
Money ?
=================
Yesterday ( 01 Dec ) , following news reports appeared
:
Business Line
“ By 2030, India may offer green
investment potential of $ 3 trillion, says IFC report “
Highlights of the funds required :
Housing Sector……………………………….. $
1400 Billion
Electric Vehicle………………………………
$ 667 Billion ( between 2018-2030 )
Renewable Energy…………………………
$ 448 Billion
Transport
Infrastructure…………………..$ 250 Billion
Agriculture……………………………………….$
198 Billion
Urban Water Supply………………………
$ 128 Billion
------------------------------------------------------------------------------------------------------------------------------
TOTAL………………………………………………$ 3091 ( in
12 years = $ 250 Billion per year )
DNA
“ India needs Rs 50 lakh*crore
investment in next five years “
While delivering 5th Annual Defence Estates
Day lecture , FM Shri Arun Jaitleyji
said :
“ Inadequate infrastructure is a major
hindrance in growth and the funding requirement for infrastructure in the
country is huge
There is a requirement of a whooping Rs 50 Lakh*Crore investment in the sector over
the next five years “ ( approx. $ 750 Billion in 5 years = $ 150 Billion per
year )
I believe , if anything , these figures
are gross under-estimates , even if we have a modest ambition to become a “ Middle Income Economy “ by 2030 !
But the question is not so much about
the accuracy of these estimates
The question is :
From where are we going to find these
monies ?
No amount of increasing the coverage of
our tax-base , will suffice
And government is committed to lowering
the tax rates ( for both , individuals
and corporate )
Then there is a limit beyond which we
must not increase Foreign Investment (
Direct or Indirect )
And whatever Foreign Investment does
flow in, has compulsion of earning a 10 %
return ! ( - there is no way we could get foreign
loans @ 0.1 % interest , for more than 1 % of our funds requirement ! )
There is only ONE
WAY to raise all these funds
And that is :
BLACK MONEY AMNESTY scheme like the one which Indonesia introduced (July 2016-Mar 2017 ) and
raised $ 342 BILLION { One
third of its GDP } , from 745,000
tax payers , by levying 2 % - 4 % tax
( as against 50 % in our case ) / NO PENALTY / NO QUESTIONS
asked / NO SCRUTINY !
The Scheme yielded $ 2.3 Billion by way
of tax
Now consider the following :
India’s BLACK MONEY is estimated to be $ 460 Billion ( apx. 20 % of our GDP )
Our own recent Amnesty Scheme yielded approx. $ 10 Billion ( 2 % of GDP )
Indonesia managed $ 342 Billion which amounted to nearly ONE
THIRD of its GDP
If we too could bring out Black Money @ 33 % of our GDP , that would amount to
nearly
$ 800 Billion !
Indonesia’s BLACK MONEY is estimated to
be $ 851 Billion ( parked overseas
) – which means , Indonesia managed to garner nearly 40 % of hidden Black Money
!
The Indonesian
government has estimated 5,500tn rupiah ( = $ 407 Trillion ) will be needed
through 2019 for infrastructure; the state budget
can probably cover a quarter of that. { https://www.ft.com/content/28141116-c841-11e6-8f29-9445cac8966f
}
At
the end of the third quarter of 2017, Bank Indonesia (BI), the country’s
central bank, announced an interest rate cut down to 4.50 per cent from previous
4.75 per cent.
References :
Did I hear someone say : “ It is time to look east-wards “ ?
02
Dec 2017
www.hemenparekh.in / blogs
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