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

Tuesday, 15 November 2016

Take the Wind out of their Sail


When the Lok Sabha reconvenes this morning , expect fire-works !


12 opposition parties , led by Congress , will shed crocodile tears to show their sympathy for the difficulties / harassments / pains suffered by millions  ordinary citizens since demonetization announcement of 08 Nov ." They have lost their livelihoods ", they will say


With forthcoming elections in UP - and 4 more States - , how can they afford to miss out such a golden opportunity to attack the government as being " Anti Poor " ?


Government will argue that ,


*  Things will return to normal in 8 / 10 days


*  Already Rs 5.5 lakh*crore worth of Rs 500 / 1000 notes have been deposited in bank
    accounts . By March 2017 , this will exceed Rs 10 lakh*crore . Balance of Rs 5 lakh*
    crore will get burnt or dumped into rivers


*  Next ( after 30 Dec ) , we plan to attack all Benami Properties where Black money is
    locked up ( for which , it was essential to maintain , utmost secrecy )


But , all of these valid arguments will get drowned in the din !


However, there is a surefire way in which the Government can silence the opposition


By Prime Minister announcing the following in Lok Sabha , at the very outset
( suggestions which, I sent to NDA Ministers through emails shown below ) :


#   Email date :  01  Oct  2015
 
 Abolishing Personal Income Tax ( source of the DARKNESS of CORRUPTION )

*    Stop asking any questions as to the " Source " for all cash deposits 
      made into bank accounts opened under Jan Dhan Yojana


*    Levy a Bank Transaction Tax ( BTT ) of 2 % to yield revenue of 
      Rs 15 lakh*crores , which would be 5 times the loss of revenue due to
      abolition of Personal Income Tax


*    Encourage deposits made into Jan Dhan bank accounts to be invested in
      SOLAR POWER SPV Farms , by direct depositing of income derived ( 
      from sale of electricity to DISCOMs ) into those bank accounts


#   Email date :  22  Sept  2015

*  Enact " Start Up Act - 2015 "

*  Abolish Personal Income Tax for Start Ups registering on web site of 
   Income Tax department ( must file ZERO TAX return for 10 years )

*  No questions asked re source for all investments made in Start Ups ,as
   long as this cash gets deposited in the bank account of that Start Up 


#  E Mail date : 18  Sept  2015

The only FINAL / LASTING solution is :

Abolish Personal Income Tax

Simultaneously declare :

No questions will be asked for any amount of cash deposited in bank accounts by individuals ( of course , with linkage to PAN / Aadhar / RuPay card etc )

Sure , Government will lose Rs 2.5 lakh*crores by way of tax revenue,
received from some 3 crore individual tax payers

But , Abolition of Personal Income Tax ( and no questions asked re bank deposits ) , could lead to 30 crore persons , each depositing Rs 1 lakh into their bank accounts ! 

 {  Not unthinkable , considering that during past one year alone , Rs 20,000
   Cr got deposited in 20 crore new bank accounts , under Jan Dhan Yojana  }

 So , we are talking of bank accounts swelling by  Rs 30 crore*lakh  !

Even if that money earns the depositors , only 3 % rate of interest !

And banks will give out these moneys as loans to Corporate @ 5 % interest rate  ! 

Trillions of BLACK MONEY Rupees will become " Productive Assets "

And , Corporate World ( + our Finance Minister ) would not need to keep begging RBI for a " Rate Cut " to boost the economy !

To keep growing at 10% rate , we have got to make ours , a :

LOW  COST  ECONOMY 


#  E  Mail  date  :  04  Jan  2015

*   " Inverse Taxation Regime " both , for Personal Income Tax as also for Corporate Tax

       The more you earn , the less tax ( rate on next higher slab ) you pay


*   For Corporate , the more people you employ , the less tax ( rate on next higher slab ) you pay



*   Even total abolition of Personal Income Tax



There are over a dozen Countries where there is NIL personal Income Tax


So , there is a precedent that this can work  !


If Personal Income Tax was to be totally abolished , what can / may  happen ?



*   There will be no incentive for tax evasion / avoidance 


     This will be a permanent FULL STOP to future generation of Black Money


*   All payments will be received by cheques and deposited in Bank Accounts


*   All stashed away Black Money will , somehow , on its own , find its way in bank

    accounts, - including Black Money lying in Foreign Banks , making SIT redundant !

   This is the ONLY WAY , NDA  government can redeem its promise !


*   Savings rate will go up dramatically


*   That will lead to greater purchasing power for all people


*   Leading to higher domestic consumption of FMCG / Consumer Durables


*   This will result in huge collection of GST , offsetting revenue losses


*   Demand will go up , boosting manufacturing


*   With rise in manufacturing , sub-contracting / outsourcing will increase , giving a big

     boost to MSME sector 

*   If manufacturing goes up , employment / self-employment ,  will go up


*   For a change , we as a Nation , will learn to celebrate , 


     #    Wealth Creation as a means to reduce poverty


     #    World-size Companies to take on the World


*   There will be less pressure on demands for higher salaries / wages


*   If salaries / wages do not rise , inflation will ease


*   Cost of manufacturing too , will go down


*   Era of " Low Cost Economy " will set in ( VIRTUOUS CIRCLE ? )


*   Savings will move from gold / land to Financial Assets


*   With a low cost structure , our products / services  will become , internationally

     competitive and exports will go up

*   That will improve our current negative Trade Balance / CAD


*   This ( abolition of Personal Income Tax ) should be coupled with SPVs for 


     #    Infrastructure Projects ( especially Smart Cities / Corridors etc )


     #    Educational Institutions


     #     Skill Development Institutions


     #     Health care Facilities


     #     Solar Power ( Eqpt Mfr / Generation / Transmission / Distribution )


     #     Digital India ( Broadband ) Network



     No questions must be asked as to the source of money invested in such SPVs


    All income ( Corporate Income or Personal Income by way of dividends / interests etc )
    arising out of investments made in such SPV , must be tax-exempted

    SPVs , themselves , must not need to pay any taxes for 10 years 

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

Dear Shri  Modiji :


*   Today , is the time for your NEXT Surgical Strike / Master Stroke

*   Take away the empty thunder of the Opposition

*   Render the Opposition " irrelevant  "

*   Forever , silence your critics with these " Declarations of Intentions "

*   Make 21st Century , the INDIAN  CENTURY  !

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

16  Nov  2016

www.hemenparekh.in / blogs


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