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Wednesday, 11 February 2015

One Up on Free Wi - Fi ?

AAP won Delhi Elections by offering Free Wi Fi / Water / Electricity etc

Apparently , offering anything " Free " , works like a sure-fire strategy

In the past , various political parties have managed to ride home to power by offering , free,

* Rice

* Mangal Sutra

* Buffalos

* Laptops / Tablets

* Mixies / Bycycles.......etc

For the forthcoming elections in Bihar , what freebies can we expect to be promised ?

> From RJD / JDU / Congress etc :

* Free Education / Health Care / Roti - Kapada - Makaan / Transport / LPG ..etc

> From BJP ( only from BJP - being in power at the Centre ) :

* Total abolition of Personal Income Tax ?

Sure , Centre would lose revenue of ( approx ) Rs 3 lakh Crores

But look at the Up-Side :

* Those 8 Crore ( out of 11.5 Crore ) Bank Accounts opened under Jan Dhan Yojana , which have , currently ZERO balance , would suddenly swell with cumulative deposits of , Rs 30 lakh Crores !

Don't ask , where the money came from ! Just let them spend ( or invest ) to expand the economy , by boosting Purchasing Power

* Permanent solution to prevention of future generation of Black Money !

( By taking away incentive to hide any income ! )

* Elimination of " Tax - Terrorism / Root of all corruption "

* Save crores of Rupees thru dismantling of Personal Income Tax department

* Centre will not need to beg Japan / Russia / China etc to bring in dollars to invest in Mega Cities / Rail Corridors / Sagar Mala ports / Highways / Airports / Power projects .. etc

Of course , " Experts of Economy " will advance dozens of reasons , why this is a crazy and impractical idea

But then , Economy of a country is too serious a matter to be left to the Economists !

A seemingly " impossible " thing gets done , simply because SOMEONE wants it done !

Shri Jaitley :

It is still not too late to Up the AAP !

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with regards

hemen parekh / 12 Feb 2015

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Thursday, 15 January 2015

Your Services

Dear Shailesh

Thanks for writing

We have no immediate need for your services but I do think , there must be thousands of companies in our online database of 2,28,000 + Indian Companies , that might be your potential clients

And the best / quickest / cheapest way to send across your Marketing Message to them , is to use our online Message Blasting services from

www.B2BmessageBlaster.com

Registration is free and when you click on the Activation Link , emailed to you , your account gets credited with 1,000 FREE emails !

VIEW DEMO - then REGISTER now !

with regards ,

hemen parekh

hcp@RecruitGuru.com

Mumbai ( M ) 0 - 98,67,55,08,08

Sunday, 4 January 2015

A VIRTUOUS CIRCLE ?

For over two years now , I have been advocating ,

> " 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 , some how , 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

* What else ?

I hope our newly constituted " Niti Ayoga " will examine my suggestion and guide framing of

> 2015 Central Budget NITI

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hemen parekh / Jan 05 , 2015

www.hemenparekh.in

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Tuesday, 30 December 2014

Let us focus on what we are Good at !

Some 30 years back ( ? ) , GOI invested Rs 100 Crores in setting up a factory / company ( Called Semi-Conductors India Ltd ? ) to produce wafer fabrication / chips for computers. It took 3 years to start production - of chips used in wrist watches ! - available by Kilo-weights on footpaths of Taiwan !

By that time , chip manufacture / design had undergone 3 life cycles !

To save GOI embarrassment , a fire burnt down that factory ! - never to come up again !

If we want to increase local " Value Addition " in " India Made " electronics products , we must ensure that ,

> there is nil / very small import duty on raw materials / components

> a little more duty on Sub-Assemblies / Assemblies

> a high duty on finished products

That will encourage more local Value Addition

Stopping / discouraging imports is not the right way to balance our Trade Deficit

That should be done by exporting things / services where we are globally competitive

Let us not get fixated on making things locally - even at a high cost as compared to importing

Let us not turn ours into a " High Cost Economy "

hemen parekh / Dec 31 , 2014

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Friday, 5 December 2014

BUDGETING BY OBJECTIVES

Dear Shri Jaitley ,

Come Feb 2015 and you will present your Budget in Lok Sabha

You will allocate thousands of crores of rupees to different ministries , for spending during 2015-16

You may even increase / decrease their allocations based on , to what extent ( % ) did they manage to actually " spend " their current year's allocations

The one and only emphasis is on " spending " !

As usual , no MP will ask :

" But , what exactly did the Minister concerned achieve by spending this money ?

What physical / measureable targets did the Minister succeed in reaching / exceeding , with that money ? Where / What are the OUTPUTS ?

Why is it that no targets were set in advance , before the start of the year ?

How come , Minister was allowed to shoot first and then draw concentric circles around the hole afterwards ( at the end of the year ) , to claim BULL'S EYE ? "

In private sector , shareholders / bankers do not hesitate to sack the CMD / MD / CEO , if he fails to deliver on promised profit

Then , why are Ministers allowed to retain their posts ( - or even get kicked upstairs ! ), despite failing to deliver ?

Dear Shri Jaitley :

MPs should know that YOU cannot answer these questions , simply because , at the time of the Budget Exercise , no physical OUTPUTS got fixed for each Minister

What did get fixed , were only EXPENDITURE TARGETS !

Simply because MPs passed the Budget without fixing targets such as following for 31 March 2015 :

* Finance Minister

> GDP ..... 6 % ............ [ 10 % improvement ]

> CAD.......( - ) 5 % .....[ 20 % improvement ]

* Commerce Minister

> Exports........ $ 350 Billion .... [ 10 % improvement ]

> FDI..............$ 50 Billion...... [ 20 % improvement ]

* Railway Minister

> Lengths of Tracks...... 125,000 Km..... [ Up by 10 % ]

> No of Passenger Trains / day..... 10,000... [ Up by 10 % ]

* Health Minister

> Chronic Hunger and Hunger Related Deaths

8 Million / year .................................... [ Down by 20 % ]

> Under-nourished people..... 200 million..... [ Down by 10 % ]

* Social Welfare Minister

> Dowery Deaths / year....... 8,000...... ......[ Down by 10 % ]

> People without Toilets........ 500 Million.... [ Down by 20 % ]

* Agriculture Minister

> Farmers Suicide/ year..... .. 14,000............... [ Down by 20 % ]

> Food Grain rotting / year..... 5 Million tons..... [ Down by 20 % ]

So on and so forth for each Minister

Some caution / suggestions :

* Ignore the numbers given above. I could be factually wrong

* Focus on the concept of " Management by Objectives "

* Overcome the fear of " failure to meet the targets ".

* Overcome the fear of " being ridiculed " !

* Don't chop off the neck that dares to stick out !

* Only failure is , not fixing the targets !

* Actual vs Targeted achievements must be measured , on an ongoing

basis , by totally independent THIRD PARTY agencies

Ministers / Finance Minister and these Agencies , must agree in advance , how the

Agencies will go about " measuring " the Actual Achievements

The method of measurement must be transparent and well publicized

in advance

Agencies shall have no role in fixing of Annual Targets

That is best done by the Prime Minister - the CEO , MakeInIndia

* There must be at least 10 performance parameters for each Minister

* Parameters themselves could be selected / prioritized , based on an

ONLINE PUBLIC SURVEY / OPINION POLL , from Govt web site

* If conducting such an ONLINE POLL for the forthcoming budget is

too late , same could be done on a printed form , by current MPs /

MLAs / Rajya Sabha Members

* Results of the SURVEY / POLL , must be published

I hope readers of this blog will contribute by passing on this message to

> all of their friends / relatives / acquaintances / colleagues

> as many legislators whose email IDs they can find

> to Shri Jaitley ( ajaitley@sansad.nic.in / ajaitley@del5.vsnl.net.in )

> Everyone in their CONTACT list

OR,

> request them to look it up on...www.hemenparekh.in

Somehow , we must bring pressure on Lok Sabha Members , NOT to approve the forthcoming budget , unless TARGETS are set in advance

* hemen parekh / 06 Dec 2014

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Tuesday, 18 November 2014

MAKE TO MAKE IT A REALITY

Objective of tomorrow's MINT closed door event ( as reported in Ads ) is :

"...to examine the implications of this vision and propose what's needed to make it a reality "

Here is one of the things that I think is needed :

Treat MII ( Make In India ) on par with MOM ( Mars Orbital Mission )

We have all seen MOM control room on TV , with dozens of scientists glued to respective computer screens , monitoring every aspect of the Mission

And , whenever required , taking " Course Correction Actions " in real time

For MII ( Make In India ) too , we need such Control Rooms

One at the HUB ( in DIPP ) and one each in State Capitals ( Spokes )

The concerned officers will monitor :

> Web Site Traffic ( better than Google Web Analytics )

Who is visiting from where and looking at which pages , and doing what , and for how long ...etc

> Message Traffic

From server log of B2B web site , monitor which FOREIGN COMPANIES are blasting ( We are interested to talk to you ) messages to

which INDIAN COMPANIES

> Action Traffic

B2B server sending out ( within ONE MINUTE ) , full details of above-mentioned messages to,

* Indian Diplomatic Missions abroad to get in touch with the Message-Sending FOREIGN COMPANIES , offering instant help

* Chief Ministers / Industry Ministers / Industry Commissioners etc of the STATE GOVERNMENTS , where Message-Receiving INDIAN

COMPANIES are located ( - expect a fierce / healthy competition amongst States to locate project in their States ! )

> Project Monitoring

Implementation of each project ( above a certain value ) being monitored using PERT technique ( Mr Rice would appreciate this )

To make MOM , a " reality " , cost the country , some Rs 430 Crores - and time of some 100 scientists

I believe CONTROL ROOMS ( War Rooms ? ) of Make In India , may not cost more than Rs 43 Crores ( - all put together )

And some company like Infosys / TCS / Wipro , may be able to construct - and operationalize - such rooms ( Hardware and Software included )

within 3 months - given the challenge to raise our " Ease of Doing Business " rank from 142 to 42 !

* hemen parekh / 18 Nov 2014

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Sunday, 16 November 2014

BENCH-MARKING INDIA INC

Launching of MakeInIndia web site was a great initiative

It can be made greater if its scope gets expanded to enable millions of SME ( Small Medium Enterprises ) to quickly learn / absorb the best Manufacturing / Management practices of India's most successful companies

Over 20 / 30 / 40 years , these companies have developed / evolved , some of the best practices in different functional areas , such as :

* Project Planning / Execution
* Financing / Fund Raising
* Long Term Strategy
* Cost Accounting
* Capital Budgeting
* Dealership Network
* Supply Management
* Subcontracting / Outsourcing
* Vendor Development
* Statistical Quality Control
* Tendering
* Human Resource Development
* Maintenance Management
* Logistics Planning
* Salary / Wages Structuring......etc etc

In each of these Functional Areas , these Companies have created ,

* Standard Office Procedures
* Approved Shop Practices
* Operation Manuals
* Forms ( Online / Offline )
* Documentation
* Software Tools
* Brochures / Pamphlets
* Agreements / Contracts
* Legal Undertakings / Notices
* Board Resolutions
* PERT Charts
* Process Monitoring Graphs......etc etc

And which are these " Successful " Companies ?

* L&T / Reliance / Birla Group / Adani Group / Infosys / Wipro / and hundreds of others

Can they be persuaded to share these data by uploading on MakeInIndia web site ? - for 25 million SME to download / modify and implement in their own companies ?

I am sure if our PM , Shri Narendrabhai Modi , makes such a request to ASSOCHAM / FICCI / CII and other similar organizations , these companies would gladly come forward to share with the rest of the Indian Corporate , the KNOWLEDGE / WISDOM that lies captured in the above mentioned documents / manuals

It is high time , we think " Out Of Box "

It is time to convert Private Intellectual Property ( PIP ) , into National Intellectual Property ( NIP )

I am not suggesting that any Company should reveal any of its " Trade Secrets / Patents "

But if MakeInIndia has to become a resounding success , successful companies must undertake to mentor 25 million SME

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* hemen parekh / 17 Nov 2014
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Wednesday, 12 November 2014

POLITICS IS THE ART OF POSSIBLE

Between Mahabharat of old and the Maharashtra of new , there are some parallels

When offered a choice , Pandava Prince , Arjun chose Lord Krishna , rather than his army of 18,000 soldiers

Devendra Fadnavis chose a couple of independent MLAs , rather than 62 MLAs of Shivsena

Again , when thousands of soldiers of Pandava army were succumbing to the arrows of Guru Dronacharya , Lord Krishna showed a way to demoralize the Guru

He made Dharmaraj Yudhisthir ( who only spoke truth - and nothing but the truth ) tell a half-truth

When rumor spread that Guru's son , Ashwathama was killed , Guru asked Yudhisthir , whether this was true , knowing that Yudhisthir would only speak truth

Yudhisthir loudly said ,

" Yes , Ashwathama is dead "

Then added in an inaudible low voice ,

" May be a human or may be an elephant "

Maharashtra Assembly Speaker , Haribhau Bagade , too , said ,

" This Government has passed the confidence vote "

May be , among the din that followed , no one heard what he added ,

" May be legitimately , may be fraudulently "

It seems Shiv Sena forgot to ask itself ,

" What good can you do for the people , if you are not in power ?

People are simply fed up of Opposition members walking down to the Well of the House , shouting slogans

People have elected MLAs - whether in Government or in Opposition - to pull them out of the abysmal well of poverty

* hemen parekh / 13 Nov 2014

Tuesday, 11 November 2014

A CASE FOR ZERO PERSONAL INCOME TAX

For past two years , I have been advocating total abolition of Personal Income Tax

Not because , a few countries such as Saudi Arabia , UAE , Qatar , Oman , Kuwait , Bahrain etc , have NIL personal income tax

But , even for a less developed country like ours , it makes a lot of sense

Here is why :

* Today's Hindustan Times reports following study by Price Water-house Coopers ( PWC ) :

" Average take-home salary as a % age of total salary " - are :

> Saudi Arabia................ 98.86

> China....................... 62.05

> Germany................... 60.61

> USA.......................... 60.45

> UK........................... 57.28

> India......................... 54.90

> Italy......................... 50.59

* It is obvious that Saudi Arabian citizens take home more because there is NO personal Income Tax there

* In India , our " Take home Salary " is only 54.90 % , because we pay a very
high personal income tax

* Of the total revenue receipt of Central Government ( 2013-14 est ) ,Personal Income Tax contributes only 23 % ( approx Rs 2.4 lakh crore )

* If personal income tax were to be abolished , this revenue will be lost

But , here is the Upside :

* India's current Household Saving Rate = 21.9 % of GDP

* That means our total Household Savings = Rs 24.72 lakh crore ( 2012-13 )

* Of these ,

> Rs 16 lakh crore are tied up in unproductive Physical Assets (Gold/Land)

> Rs 8 lakh crore are invested in Financial Assets (Bank / Mutual Funds)

* If Personal Income tax is abolished , it is possible that our Household
Savings Rate may go up from 30.1 % to 45% of GDP (it was 40% in past)

* That would add Rs 12.36 lakh crores , raising total to Rs 37 lakh crore !

* And most likely , the proportion of investments would be ,

> Rs 7 lakh crore in Physical Assets , and

> Rs 30 lakh crore in Financial Assets ( Productive use )

And that's not all !

* 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

Now , couple this BOLD & IMAGINATIVE step with :

* Creation of SPVs , dedicated for building Infrastructure . No questions asked

for amounts invested in these SPVs . No dividend tax for 10 years

If implemented , there will be no reason for us to go begging China / Japan / USA for investments in Infrastructure / Manufacturing etc !

* hemen parekh / 12 Nov 2014

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Saturday, 8 November 2014

HOW CHINA MAKES CHEAP ?

A few days back , I heard , Government of India banned imports of cheap Chinese fire-crackers ; presumably to protect the jobs of thousands of workers , working in the fire-cracker factories of Shivkashi and elsewhere

This morning newspapers carry headlines :

" Lakhs of poor women working in Agarbatti factories thrown out of jobs , due to imports of cheap Chinese Agarbatties "

Soon expect a ban on imports of Chinese Agarbatties !

It is the same story with big manufacturers of ,

> Power Generation equipment

> Solar panels

> Machine Tools

> Construction Materials........etc

Indian manufacturers of these equipment want India Government either to ban imports of such equipment altogether or impose huge import duties to discourage its imports

They are telling Government :

" If you don't , thousands of workers will lose jobs "

In turn , the Indian Government is telling the Chinese :

" We already have a negative trade balance with you , of about $ 35 BILLION.
You must help us correct it by buying from us MORE ( of those expensive goods that we manufacture ) ,

and,

Stop exporting to us all of those CHEAP Chinese goods "

Question is :

How many Chinese goods can we stop importing ?

No one seems to be asking :

" What enables the Chinese Manufacturers to make those goods so cheap ? "

May be - just may be - India Government , and those Indian manufacturers , need to find answers to this question !

May be , we need to IMPORT those Chinese Labor Policies / Government Procedures / Manufacturing Practices / Bank Interests / Tax rates / Land Usage laws / Single Window clearances and a hundred other things that have enabled China to become , the " Workshop of the World " !

That is the only way to save - and create - JOBS , in India

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hemen parekh / 09 Nov 2014

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