Blog: February 2016

Monday, 29 February 2016

Quantum Jump ?

While inaugurating the " Make in India " week in Mumbai on 13th Feb , Shri Narendra Modiji told the industrialists :

" Incremental changes will not suffice . We need a quantum jump "

Perhaps doubling of outlay on Agriculture / Rural Development / Highways / Railways etc, in the budget which Shri Jaitley announced yesterday , was what Shri Modi had in mind when he said this

But what about the issue of unearthing of BLACK MONEY ?

Do you consider the following announcements as a QUANTUM JUMP ?

# BUDGET 2015

" Declaration of Undisclosed Foreign Assets Scheme "

Restricted to " foreign assets " only

30 % tax + 30 % penalty

Yield : Rs 10,000 crore

# BUDGET 2016

" Income Disclosure Scheme "

What is that QUANTUM JUMP ?

* Chance to declare " Domestic " undisclosed assets

* 4 month window / pay within 2 months

* 30 % tax + 7.5% surcharge + 7.5% penalty

* No scrutiny or inquiry under Income Tax Act / Wealth Tax Act

* Immunity from prosecution / benami transactions

* Yield ? Rs 20,000 crore ( my guess )

If past is any indication of the future , expect following ( incremental ? ) jumps in :

# BUDGET 2017

* " Voluntary Disclosure Scheme "

* Will cover , both foreign as well as domestic undeclared assets

* No penalty / Just pay 30% tax / No prosecution / 6 month window

* Yield : Rs 100,000 Cr

# BUDGET 2018

* " Perpetual Amnesty Scheme "

* No tax / no penalty / no scrutiny / no prosecution / no questions / no window

* Cash deposited in ATM ( Automatic Taker Machines ) will be used for Infrastructure SPV

* Depositors will get tax free interest of 5 % , directly credited in their Jan Dhan Bank Accounts

* Yield : Rs 340 lakh*crores ( all the BLACK MONEY stashed in bank lockers / locked up in gold / land etc )

( details at w..w...hemenparekh...in )

Remember , 2018 will be the last budget for the present NDA government , before the 2019 General Elections !

But then , waiting till 2018 may prove to be a political harakiri for BJP !

Announcing this " Perpetual Amnesty Scheme " in 2017 Budget will ensure that BJP gets 400 seats in Lok Sabha in 2019 elections !

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

hemenparekh.in / blogs

01 March 2016

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

Make Yourself Heard

Dear Visitor :

It is time for YOU to speak up - and demand that YOU are heard

By emailing this suggestion - incorporating your OWN improvements - to the following Policy Makers

( Just multiple copy all the following Email IDs into the Recipient column of your Outlook and Copy / paste this suggestion in the Message Box ) :

narendramodi1234@gmail.com; 38ashokroad@gmail.com;ajaitley@del5.vsnl.net.in; jayant.sinha19@sansad.nic.in;piyush.goyal@gov.in;nitin.gadkari@nic.in; spprabhu1@rediffmail.com;bandaru@sansad.nic.in;smritizirani@nic.in;nsitharaman@nic.in; ravis@sansad.nic.in;sureshprabhu@irctc.co.in;prakash.j@sansad.nic.in;secy-ipp@nic.in; amitabh.kant@nic.in; shaktikanta.das@nic.in; rsecy@nic.in; adhia1981@gmail.com; ceo-niti@nic.in; atul-chaturvedi@nic.in; uma.bharati@sansad.nic.in; d.pradhan@sansad.nic.in; rprudy.office@gmail.com; rudypr@rediffmail.com; eam@mea.gov.in; mosvks@mea.gov.in; mvnaidu@sansad.nic.in; mnaqvi@sansad.nic.in; rao.inderjit@sansad.nic.in; mljoffice@gov.in; sadananda.gowda@sansad.nic.in; ministerminority@gov.in; najmah@sansad.nic.in; minister-ca@nic.in; ramvilas.paswan@sansad.nic.in; gandhim@sansad.nic.in; akumar-alpha@sansad.nic.in; jpnadda@sansad.nic.in; hm.moca@nic.in; geete@sansad.nic.in; simratbadal@yahoo.com; ns.tomar@nic.in; rmsingh@sansad.nic.in; tc.gehlot@sansad.nic.in; dr.harshvardhan@sansad.nic.in

Sunday, 28 February 2016

Don't Expect This in Budget

Don't expect my following suggestion to figure in the Budget speech which, Shri Jaitleyji will read in Lok Sabha , a few hours from now

But then it does not have to be !

First break the unwritten rule : " If a reform was not announced in Budget , then it cannot be implemented "

My suggestion is about ATM V 2.0

Many decades ago , ATM were first introduced in America when banks found long lines of customers waiting to withdraw cash at the CASH COUNTER

In America , cashiers are called TELLERS . So these CASH DISPENSING machines came to be called AUTOMATIC TELLER MACHINE ( ATM )

In India , we call these ANY TIME ( cash ) MACHINE , which give out cash upon

* entering a few details / code numbers into ATM screen

* amount of cash you want to withdraw and

* inserting your ATM Card in the machine

ATM prints out a slip of paper incorporating full details of the transaction / customer name etc

I believe , nowadays , any ATM accepts ATM card issued by any bank , so you need not worry to find a ATM belonging to YOUR bank ( where you have YOUR bank account )

MY SUGGESTION :

* Come out with ATM V 2.0 ( call it , " Automatic Taker Machine " ? )

* Install one in every bank branch and at 145,000 post offices ( India Post's Payment Banks )

* ATM V 2.0 does NOT " dispense" cash . It only " accepts " cash !

* Cash depositor will enter personal details ( Aadhar No / Jan Dhan Bank A/C No etc ) and amount being deposited

* ATM V 2.0 will count the cash ( much like currently used CASH COUNTERS at most bank branches )

* It will print out a RECEIPT , giving full details

* All ATMs ( V 2.0 ) will be inter-connected in a Network having a CENTRAL server

* All cash deposited ( by every user ) will be used for Infrastructure SPV

* Depositor will earn annual interest @ 5 % on CASH deposited ( Receipt wise )

* Cash Receipts can be en-cashed upon maturity of 10 years ( like FIXED DEPOSIT receipts )

* Interest will be TAX FREE and get directly deposited in depositor's Jan Dhan Bank A/c

* No questions ( as to the source of the cash deposited ) will be asked ( Perpetual Amnesty Scheme )

I understand , Jan Dhan Yojana managed to garner deposits of approx Rs 30 thousand crores in 18 months

ATM V 2.0 , will bring back those Rs 34.4 lakh*crores of undisclosed assets that are lying in foreign banks ,

AND

Rs 340 lakh*crores of unaccounted BLACK MONEY lying in domestic bank lockers ( or locked up as gold / land )

In deep space , there are BLACK HOLES which suck in all matter . Even light cannot escape from a black hole

ATM V 2.0 will be our WHITE HOLES which will suck in all black money Indians have stashed anywhere !

Let us use this INNOVATION , which is simply re-configuring well-established and straight forward HW / SW !

Dear Shri Jaitleyji ,

There is no need to worry about how to raise revenue to fund those Infrastructure Projects to generate jobs

No need to widen tax net ( from 4 % to 23 % ) or borrow money from market or abroad

No need to announce in your budget speech this morning ! No passing of any BILL in Rajya Sabha !

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

hemenparekh.in / blogs

29 Feb 2016

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

Make Yourself Heard

Dear Visitor :

It is time for YOU to speak up - and demand that YOU are heard

By emailing this suggestion - incorporating your OWN improvements - to the following Policy Makers

( Just multiple copy all the following Email IDs into the Recipient column of your Outlook and Copy / paste this suggestion in the Message Box ) :

Saturday, 27 February 2016

A Tale of Two Tracking !

State of Maharashtra has a total of 50 prisons , of which 9 are Central jails

Between them , they house 25,000-30,000 inmates

The country as a whole, has some 1,387 prisons , housing approx 356,000 prisoners

Maharashtra government has decided to introduce " chip or bracelet " tracking system for prisoners and is in the process of signing an agreement with the Israeli Government under which , private Israeli companies will implement this " tracking " project

Why all this rush for a technology driven reform ?

Because , in March 2015 , five criminals had fled from the Nagpur jail after climbing boundary wall !

But no one in government seems to be really bothered with the following :

* There are billions of high currency notes ( Rs 500 / 1000 ) in circulations

* A whole lot of these are unaccounted BLACK MONEY income, on which no tax got paid

* Many more billions are stashed in secret bank lockers , which occasionally "escape" for purchase of gold/land etc

* High currency notes worth Rs 34.4 lakh*crore have "climbed" national boundaries and escaped without "trace" !

* Today , Government has absolutely no mechanism to " track / trace " such escapes

* In India more than 90% of all payments ( for goods and services ) are in CASH , quite a few , using these high

currency notes

* If payments are made in CASH , no GST / Service Tax can be collected

* But if the payments get made through official channels ( ECS / Bank Transfers / Credit Cards / Mobile Wallets

etc ) , then GST can be collected ( or a BTT - Bank Transaction Tax , can be levied )

Now , instead of " dehumanizing " 30,000 prisoners with a RFID-embedded collar around their necks ( as it

happened with Rajat Gupta of McKinsey fame , a few weeks back in New York ) , just so that you can track some

5 prisoners , would it not be much better / wiser to :

* Discontinue paper-based currency notes of Rs 500 and Rs 1,000 ( and withdraw in 6 months , with advance notice )

* Introduce plastic currency notes of Rs 500 / 1,000 which are embedded with RFID sensors ( far thinner than a human hair ! ) , always broadcasting their presence to Internet of Things ( IoT )

I believe Govt is launching ONE BILLION plastic currency notes of Rs 10 denomination , later this year

Let us make this a PILOT PROJECT , by embedding these with RFID sensors .

We will learn a lot in " tracking " !

* Assign to each such note, a IP V 6.0 address , linked to its unique note number

* Set up a IT-enabled Technology Platform which will constantly monitor any accumulation of Rs 500 / 1000

RFID embedded notes in excess of Rs ONE CRORE within an area of ONE square meter

Why waste time in tracking a few escaped prisoners ?

Why not leverage technology to track those billions of notes and their criminal owners who are destroying our economy ?

Mr Arvind Subramanian ( Chief Economic Adviser ) should have recommended this in his ECONOMY SURVEY , instead of suggesting to expand tax net to cover 23 % of the Indian citizens , against current 4 %

I believe , humble RFID sensor can get ten times more tax revenue than expanding tax-net to 23 % of citizens !

Incidentally :

Should Shri Jaitley-ji propose expanding the tax-net as suggested , in his budget speech tomorrow , do you know what would happen ?

You don't need to be a Nostradamus to foresee BJP losing ALL state and central elections for the next 10 years !

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

hemenparekh.in / blogs

28 Feb 2016

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

Make Yourself Heard

Dear Visitor :

It is time for YOU to speak up - and demand that YOU are heard

By emailing this suggestion - incorporating your OWN improvements - to the following Policy Makers

( Just multiple copy all the following Email IDs into the Recipient column of your Outlook and Copy / paste this suggestion in the Message Box ) :

Friday, 26 February 2016

Putting Cart before the Horse ?

An article in Hindustan Times ( 24 Feb 2016 ) reports :

" ...the government has now asked Industrial Corridors to award infrastructure and manufacturing projects only after the bidding companies show they have acquired the land needed "

I presume that , at this stage , based on the bid amount ( and other qualifying criteria ) , one bidder has been selected from among those who submitted bids , for a specific project to be located on a given piece of land , close to the Industrial Corridor

But the order ( award ) will not be placed till such time he produces " proof " of having acquired the land , which could , well belong to a dozen farmers !

Obviously , no industrialist will buy a specific piece of land in advance , from a dozen farmers , not knowing whether his bid will succeed or not !

But now that he has won the bid , he must approach those 12 farmers for the purchase of the land and enter into serious negotiations

Since the farmers " know " that an industrialist will approach them , ONLY if he has won the bid , they are in a much better bargaining position !

They can bargain collectively and quote a very high price - may be a price far in excess of what the winning industrialist had budgeted for , in his bid !

The negotiations can take weeks or months to conclude an agreement or may even fail , forcing the industrialist to back out of his commitment

That may require selecting the next ( highest ? ) bidder and repeat the process all over !

The whole idea of awarding only AFTER acquisition of required land was to speed up the project implementation

But in this idea, I see a danger of endless going in circles !

WHAT IS THE SOLUTION ?

Consider following excerpt from my email to Shri Nitin Gadkariji , on 23 March 2015 :

[ I think there is a simple solution to the concerns expressed by the farmers . Please consider the following :

* Each project will be tied to a specific SPV , created for that purpose only

* In the first instance , affected farmers will create a " Cooperative Society "

* Co-operative Society will issue shares to each land-donor farmer , in proportion to the QUANTITY / VALUE of the land donated by him

* In turn , Co-operative Society will receive shares in the SPV , equal to the value of the land + a cash compensation equal to 4 times the value of the land

* Farmer's shares of Cooperative Society cannot be sold in open market before 5 years but can be gifted to wife / Children

* Shares of Cooperative Society in the SPV itself cannot be sold for next 10 years

* The " Cash-Value Compensation " received by the Co-operative Society ( ie 4 times the land value ), will be deployed as follows :

* To be immediately paid in cash to the farmers............ 2 times

* To be deposited in the Jan-Dhan Account of each farmer as FIXED DEPOSIT ( with 10 @ interest )....2 times ]

Since each State is in serious - and healthy - competition with other States to attract investments , those which offer an equitable and just solution to the farmers as well as to the industrialists , will succeed

And there will be no need to pass any Land Acquisition Bill in Rajya Sabha !

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

hemenparekh.in / blogs

27 Feb 2016

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

Make Yourself Heard

Dear Visitor :

It is time for YOU to speak up - and demand that YOU are heard

By emailing this suggestion - incorporating your OWN improvements - to the following Policy Makers

( Just multiple copy all the following Email IDs into the Recipient column of your Outlook and Copy / paste this suggestion in the Message Box ) :

Thursday, 25 February 2016

TRASH the CASH ?

A report in Business Line ( 25 Feb 2016 ) , reads :

" Centre wants Indians to abandon cash and make digital payments "

The report lists following measures announced by NDA govt on 24 Feb :

* Withdrawal of surcharge / service charge / convenience fee on card / digital

payments , currently imposed by govt departments

* Payments beyond a prescribed threshold only in card / digital mode

* Rationalize telecom service charges for digital financial transactions

* Promote mobile banking

* Create assurance mechanisms for quick resolution of fraudulent transactions

* Review payment ecosystem in the country

To make it easy for people to make digital payments , Government has already installed :

* Electronic Clearing Service Scheme

* National Electronic Funds Transfer

* Real Time Gross Settlement Scheme

* Direct transfer of Subsidies to bank accounts of benefeciaries

* Providing RuPay debit cards

* Allowing setting up of Payment Banks

Surely , all of these steps will make it EASY for people to GRADUALLY switch over to making digital payments

But , if the HIDDEN AGENDA of the Government behind all of these initiatives , is to reduce / eliminate the scourge of BLACK MONEY ( always and entirely CASH ) , then the only initiative which will COMPEL people to " TRASH the CASH " and move over to digital payments in a HURRY, is my oft-repeated suggestion as follows :

* Discontinue paper-based currency notes of Rs 500 and Rs 1,000

* Introduce plastic currency notes of Rs 500 / 1,000 which are embedded with RFID sensors ( far thinner than a human hair ! ) , always broadcasting their presence to Internet of Things ( IoT )

* Assign to each such note, a IP V 6.0 address , linked to its unique note number

* Set up a IT-enabled Technology Platform which will constantly monitor any accumulation of Rs 500 / 1000

RFID embedded notes in excess of Rs ONE CRORE within an area of ONE square meter

If there is a political will , technology can bring this revolution in 6 months !

Can we expect Shri Jaitley-ji to conclude his Budget speech on 29 Feb , with this announcement ?

The applause that follows will be heard around the World !

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

hemenparekh.in / blogs

26 Feb 2016

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

Make Yourself Heard

Dear Visitor :

It is time for YOU to speak up - and demand that YOU are heard

By emailing this suggestion - incorporating your OWN improvements - to the following Policy Makers

( Just multiple copy all the following Email IDs into the Recipient column of your Outlook and Copy / paste this suggestion in the Message Box ) :