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 7 April 2014

Don't Ask " How " ?



At the bottom of the 42 page Election Manifesto of BJP , released yesterday , I tried to search , if in very small print somewhere , there was a footnote which read ,


"  Please , don't ask how we plan to implement these promises ;

   From where we plan to find all the money to execute these projects "


Here are my back-of-the-envelope estimates of what some of the MAJOR projects might cost :


------------------------------------------------------------------------------------
PROJECT   .................................... Approx Cost ( Rs Lakh * Crores  )
-------------------------------------------------------------------------------------
>  100 Mega Cities........................   90

>  Interlinking of Rivers..................  60

>  Sagar Mala of Ports....................  30

>  Highways ( 25,000 Km )..............  50

>  Housing ( 100 mill units )............   100

>  Rivers Cleaning..........................   10

>  Other Infra Projects....................    100

   * Freight Corridors
   * Gas Grids
   * OFC Network


------------------------------------------------------------------------------------
Total ..........................................Rs  430  Lakh Crores
------------------------------------------------------------------------------------

Admittedly , not all of these money will be required in the very first budget that NaMo government ( - of course , only if voted to power ! ) , would present by end June 2014


But a problem does not go away by postponement  !


There is only ONE viable solution to the FUNDING problem , viz:,


>  Union Government must NOT even try to fund these projects  !

There is NO WAY , it can find these kind of money thro taxation  !

There will be a revolt  !



ANSWER



>  Make it possible for the PUBLIC to invest into these projects by " owning "

    these projects - and earn a reasonable " tax-free " return on  investments
    ( Bonds ? ) in these projects


>  Towards  this end , create various INFRASTRUCTURE SPVs


>  Immediately modify  PERSONAL INCOME TAX  regime as follows :

   
    >  Up to  Rs 5  lakhs..................... NIL

    >  5.1  - 10 lakhs.......................  8 %

    >  10.1 - 20 lakhs......................  6 %

    >  20.1  - 50 lakhs.....................  5 %

   >  50.1 - 100 lakhs.....................  3 %

   >  Above 100 lakhs......................  1 %



What is likely to happen with such " INVERSE  TAXATION  " regime  ?


Following few things :


>  Total personal tax payer base will go up dramatically from current 4
     crores tax-payers


>  with this " INVERSE  TAX  REGIME " , there will be no incentive to  evade
    taxes and to generate " BLACK  MONEY  "

    There will be no resistance to accept ALL payments by cheque / electronic
    clearance

    The more you disclose as your income , the less you pay by way of taxes

    ( Of course , incrementally )

>  For a change , we will learn to reward honesty / efficiency / productivity !

    No need to bribe those Income Tax officers  !


>  Suddenly , lakhs of crores of BLACK MONEY will become  WHITE MONEY
   

>  There will be a huge surge in bank deposits ( - even with , the inevitable
    lower interest rates )


>  Banks will be awash with funds to finance businesses / infrastructure
    projects etc , encouraging entrepreneurs / self-employed to set up new
   businesses ( at 2 % interest rates of loans ) and generate millions of jobs


In any case , BJP manifesto promises :


>   Rationalization and simplification of the tax regime - which is currently
      repulsive for honest tax payers
   

>  The process of bringing black money to India , what belongs to India , will
    be put in motion on priority


>  Minimize scope for Corruption



Narendrabhai  ,


Here is your chance to ditch the " Historical Baggage " into the Indian Ocean
and come up with an  INNOVATION   that will take India ahead of China  !


If President Kubitschek of Brazil ( 1956-61 ) - son of a poor salesman - could construct Capital city BRASILIA and a 1500 Km highway , in 41 months , surely , you can do better , 57 years later  !


*   hemen  parekh  (  08  April  2014  /  Mumbai  )




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