Epilogue of Exit ?

If Referendum was the Prologue , Exit will be the Epilogue

And George Osborne ( Chancellor of Exchequer - UK ) fired the first salvo yesterday by announcing :

"  In UK , we will reduce Corporate Income Tax from 20 % to 15 % "

Earlier last week , he told his countrymen :

" We will have to learn to live within our means "

He wants UK to avoid the mistake ( of expenses exceeding the earning ) which is forcing many European countries ( and some South American countries ) , to launch a series of unpopular " Labour Reforms "

Osborne knows that for 45 % of its world-wide exports , UK depends upon " Tariff Free " entry of its goods into EU

Once UK exits , EU will impose 20% - 30 % tariff on British goods , making them uncompetitive

That will force many current UK factories ( British-owned or EU / USA / India owned ) , to relocate inside EU , leading to massive job losses in UK

By reducing Corporate Income Tax , Osborne hopes to retain those units in UK , thereby saving these jobs

This is just the beginning !

As the full impact of BREXIT unfolds , expect the following tougher / unpopular measures :

*   Freeze wages / salaries of government employees, and / or cancel annual salary increments / leave etc

*   Cutting back on free ( or highly subsidized ) Public Services ( Health - Transport - Education etc )

*   Freeze on recruitment in government departments , and / or increase working hours

*   Pull out of expensive overseas military interventions ( eg: Syria )

*   Negotiate for reduction in UK's contribution to various Word Organizations

*   Cut out " Social Security " available to EU immigrants ( eg; 850,000 from Poland )

*   Stop immigrants from Iraq / Syria / Pakistan / Afghanistan etc from coming in

*   Without violating WTO rules , introduce all kinds of indirect subsidies for goods manufactured in UK

*   Go into overdrive to " Sell " British Goods to India

In short , Osborne will leave no stone unturned to make UK , a " Low Cost Economy " to remain competitive and not lose the " Export Market " when EU tariffs go up . And make inroads into new markets

Although not faced with any kind of " Exit Crisis " , we in India , need to take following steps RIGHT NOW , to ensure that our economy, does not become a " High Cost Economy " leading to a crisis :

*  Abolish Personal Income Tax ( to eliminate CORRUPTION )

*  Introduce RFID sensors in Rs 500 / 1000 ( plastic ) currency notes  ( to eliminate BLACKMONEY )

*  Introduce decreasing Corporate Income Tax , linked to rising Employee Count for companies ( JOB CREATION )

*  Introduce EB-3Scheme to bring back $ 500 billion of Black Money stashed abroad by Indians

*  Create Self Employment ( See my blog : A NewEconomic Order - Start Up Act , 2015 )

*  Enable Indians to remotely operate / maintain , factories / offices around the World , (  BackFactory )

*  Increase accountability of Govt Officers by implementing mobile app " ISIN > < U SIN "  

Right now , new Ministers are being sworn in Rashtrapati Bhavan

Our only hope is that , some of those new faces will have the courage to introduce the above-mentioned reforms , without worrying about " losing face "

It is better to have tried and failed rather than having failed to try !

Or will this NDA government also get consigned to history's dustbin when 2019 elections arrive ?

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05  July  2016

www.hemenparekh.in / blogs