Not a day too soon !

In fact, late by 5 years  !

Context :

Govt plans rejig in personal tax slabs to boost spending 

Highlights :

The government is considering rationalising personal income tax rates in a move that will result in the increase of disposable incomes, especially among the middle class, and hopefully drive consumption and, therefore, growth

Depending on the impact the decision could have on revenue, various scenarios are being considered, the officials added.

But the idea is to give at least a 5 percentage point benefit to every taxpayer, 

One of the options is to introduce a 10% slab for people having taxable income between Rs 5 lakh and Rs 10 lakh.

Currently, this slab attracts a 20% tax rate.

There are also options to remove cess, surcharge and several tax exemptions and reduce tax rate of the highest slab from  30%  to  25%,  

Currently, taxable income between Rs 3 lakh and Rs 5 lakh attracts a 5% rate.

A 20% tax is levied on the second slab (Rs 5-10 lakh taxable income) and 30% tax on income above Rs 10 lakh.

Income up to Rs 2.5 lakh is, however, tax free

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Why 5 years too late ?

Following is an extract from my 5 year old email to the Cabinet Ministers :

Immediately modify  PERSONAL INCOME TAX  regime as shown in last column below :

   

Tax Slab ( Rs L )	2019 Tax Rate ( % )	Now being considered	Proposed in my 2014 E Mail below
Upto 2.5	Nil	-	Nil
2.5 – 5.0	5	NIL ( ? )	Nil
5  -  10	20	10 %	8 %
10 - 20	30	25 %	6 %
20 – 50	30	25 %	5 %
50 – 100	30	25 %	3 %
Ø  100	30	25 %	1 %

  

   

For justification for this INVERSE TAX REGIME , read :

        Don't Ask " How " ?             /  07  April  2014  ]

Without doubt, cutting down on tax rates will :

Ø  increase of disposable incomes

Ø  drive consumption and, therefore, growth

To know who will spend this “ Consumer  Surplus “ on what kind of “ Consumption “ , and how will this boost the Economy, read :

What would they do ?                  [ 03  May  2016 ]

Proposed tax cuts might  – temporarily -  increase online sale of Amazon / Flipkart etc by  $ 10 billion over the forthcoming Diwali holidays

But these cuts are unlikely to set into motion, that VIRTUOUS CIRCLE which alone can take India to a $ 5 Trillion GDP by 2024

What will ?

Better late than Never           [  20 Sept 2019 ]

Listen to the Lone Voice !       [ 28 Sept 2019 ]

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01     Oct  2019

     Rsvp :  hcp@RecruitGuru.com

Listen to the Lone Voice !

If you do not count late eminent legal luminary Nani Palkhiwala , Anil Bokil of Arth Kranti , and myself , then Subramaniam Swamy’s is the lone voice , recommending  total abolition of Personal Income tax

Here is what he said recently in the World Hindu Economic Forum yesterday :

Must abolish income-tax, says swamy 

Highlights:

#  Subramanian Swamy advocated the scrapping of unnecessary taxes and abolition of

    income-tax

#  “We have got such complicated taxes that people don’t even know most of them.

    Income-tax should be abolished as it is the most unbalanced tax in this country,” he said

And Anil Bokil’s proposal is quite similar but goes further and spells out how to re-write the entire system of taxation 

As far as I am concerned, I must have sent to the Cabinet Ministers , 20+ emails , pointing out how this abolition would :

Ø    Reduce corruption / black money

Ø    Boost the Consumer Spending and hence the Economy

Exactly 2 YEARS back ( 29 Sept 2017 ) , in my email to the Cabinet Ministers , I put forward my logic ( for abolition ) , as follows :

·         There will be no incentive for tax evasion / avoidance 

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

*   With NIL personal tax to pay , all the cash ( black money , no doubt ! ) ,
    lying in bank lockers , will get deposited in official bank accounts , within
    one year

*   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 !

     

*   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 motion, 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 ) MUST 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

        

         Take away incentive to evade taxes , thereby stopping future generation

    of Black Money

*    Channel all existing Black Money ( locked up in assets , in India or

      abroad ) into the main stream of economy ( Infrastructure Building )

*    Enable current annual inflow of inward remittances from overseas

      Indians to go up from $ 70 Billion to $ 700 Billion

*    Through rapid development of Infrastructure , generate Self

      Employment for 12 million youth every year

*    Drastically reduce FDI requirement for rapid growth of economy

*    By cutting down on government outlay for Infrastructure , reduce govt

      borrowing from market and consequent debt servicing

*    Raise GDP to 10 % by 2018

Why  is  such a BOLD  step urgently required ?

Current tax regime ,

*   Punishes honest people

*   Penalizes wealth creation

*   Encourages creation of " Black Money "

*   Provides incentive for tax evasion

*   Diverts resources into unproductive assets such as cash / gold / land  etc

*   Stops people from working harder / smarter

With this regime , people tend to ask :

*   Why should I work hard and earn more , if the more I earn the more I pay  ?

      

*   Why not evade paying taxes by hiding real income ?

*   How will I ever be able to buy that 1 room flat costing Rs 50 lakhs ?  I

     need Rs 20 lakhs by way of black money to buy it ! Where do I get that ?

    

*   For every rupee that the government collects from me as tax , only 15

     paise come back to me in the form of civic amenities .

Dear  Policy Makers :

This is the SIMPLEST – EASIEST – CHEAPEST way to revive our ECONOMY , in a permanent manner , without ever needing any other stimulus

There is no stimulus greater than the Human Greed !

( sources :

Don't Ask " How " ?  /                               07  April  2014 

White Holes of Black Money ?   /  03 June 2014 

A CASE FOR ZERO PERSONAL INCOME TAX  /  11 Nov 2014 

What would happen ?  /    29   Sept   2017 

Better late than Never /    20  Sept   2019

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

WHY  IS  MY  LOGIC  CRUCIAL  ?

Because it is the only way to achieve our target of $ 5 TRILLION economy by 2024 , since it is guaranteed to set in motion that VIRTUOUS  CIRCLE

I hope Shri Modiji finds a few minutes, to read my suggestion

=================================================

29  Sept  2019

Rsvp :  hcp@RecruitGuru.com

Thank You , Narendrabhai :

Thank you for telling the Business Leaders of America in your yesterday’s closed door meeting in New York :

“ Prime Minister Narendra Modi on Wednesday suggested that individuals have ownership of

  their personal data……

  During the closed-door meeting, Modi said that in future citizens would decide how they

  want their personal data to be used, including the possibility of opting to monetize it, but

  the government has not decided on the issue yet …………  “

source :

https://timesofindia.indiatimes.com/india/govt-will-try-to-balance-privacy-and-data-security-pm-modi-to-us-ceos/articleshow/71320055.cms 

Through such an unambiguous announcement, you have established the following inviolable fundamental principles concerning PERSONAL DATA :

#  Every individual is the ultimate OWNER of his personal data

#  He – and only, he alone – can decide ,

Ø   WHO can use this data

Ø   WHEN can he use it

Ø   WHAT purpose can he use it for

Ø   HOW can he use it

#  Individual will decide the VALUE of each element of his personal data and will be free to

    monetize that value , by agreeing to SELL it for a price to anyone who wants to use his

    data

Dear Narendrabhai,

Your just announced principles are fully supported by none other than Tim Berners Lee – the person who invented the Web, who says :

“Solid changes the current model where users have to hand over personal data to digital giants in exchange for perceived value.

As we’ve all discovered, this hasn’t been in our best interests.

Solid is how we evolve the web in order to restore balance - by giving every one of us complete control over data, personal or not, in a revolutionary way.

Solid is a platform, built using the existing web. It gives every user a choice about where data is stored, which specific people and groups can access select elements, and which apps you use.

It allows you, your family and colleagues, to link and share data with anyone. It allows people to look at the same data with different apps at the same time

( source  : https://inrupt.com/blog/one-small-step-for-the-web  )

Unfortunately , Solid does not enjoy acceptance or support from any government

But nothing stops the Indian Government to come out with its very own, ONLINE DATA CUSTODY / USAGE / MONETIZATION platform for its citizens, whose detailed operation I have explained in my following earlier E Mails :

Privacy For Sale                                                            [ 26 Aug 2017 ]

Digital Dividend from Demographic Data  [ 4 D ]                               [  14  Feb  2019  ]

( Extract from this email :

 

How much should we charge the Purchasers for record of each user included in the download ?

Rs 50 / =

How much do you think an user might earn per month from this arrangement ?

Assuming , his personal data gets included in 1000 downloads per month , he could end up earning Rs 50,000 per month !  ( a Universal Basic Income without burdening exchequer  )

 

==================================================================

To implement what I have suggested , is no rocket science . 

Given a challenge, any Indian Startup can develop such a platform in 6 months !

In the same New York meeting , you had also remarked :

“  The economic reforms that we announced in the past 4 months, is just a beginning . In

    the months and years to come, you will see many – and much bigger – decisions “

Dear Narendrabhai,

I urge you to set an example to the entire World by ,

Ø   Converting your announcement into your much bigger DECISION

Ø   Direct MeitY to implement it within 6 months

For complete list of 41 Emails sent to Cabinet Ministers earlier on this subject , refer :

Data Privacy Law : a Pandora’s Box ?                                       [  15  July  2018  ]

==========================================

====

27  Sept  2019

Rsvp :  hcp@RecruitGuru.com