Digital Provident Fund : An Unparalleled Opportunity

Shri Amitabh Kant ( CEO-NITI Aayog ) is a born innovator !

To promote digital payments , recently he announced following schemes :

*  Digi-dhan Vyapar Yojana ,   and   *  Lucky Grahak Yojana

Both schemes will give out prizes / awards to Vyaparis and Grahaks , who accept / make, a DIGITAL payment

Following are the highlights :

*  Total Estimated Cost :  Rs 340 crore

*  Focus                 :  Poor / Middle class citizens ( Grahaks ) / Small Businesses

                                ( Vyapari )

*  For Transactions :  Between Rs 50  to  Rs 3,000

*  First Draw          :  25 Dec 2016

*  Last Mega Draw  :  14 April 2017

                                For Consumers : Rs 100 L / Rs 50 L / Rs 25 L

                                For Merchants  : Rs 50 L  /  Rs 25 L  / Rs  5 L

* Transaction Types : Only UPI / USSD / AEPS / RuPay cards ( Private Credit

                                Cards / private E Wallets usage will NOT qualify )

                                

* LUCKY GRAHAK YOJANA :

   Daily  Draws :

   15,000 winners * 100 days * Rs 1000 each ( Total : 15 lakh persons /  Rs 150

   Crore )

   Weekly  Draws :

    16 weeks * 7000 Grahaks * ( Rs 1 L / Rs 10,000 / Rs 5,000 )

* DIGI-DHAN VYAPARI YOJANA

   Weekly Draws

   16 weeks * 7000 Merchants ( ? ) * ( Rs 50,000 each / Total Cost..... ? 

GOOD  NEWS :

As suggested in my following blog / email , private cards / wallets have been KEPT OUT !

 CONSPIRACY  OF THE  CARDS 

{ http://myblogepage.blogspot.com/2016/12/conspiracy-of-cards.html  }

BAD  NEWS  :

No of Digital Transactions on 08 Dec ( in one day ) :

*    E Wallets.......... 270 lakhs    ( practically , all PRIVATE / INELIGIBLE )

*    RuPay ..............  16 lakhs    ( 1600 lakh in 100 days ? )

*    UPI / AEPS........  0.48 lakhs ( 48 lakh in 100 days ? )

It appears that , over the next 100 days , out of ( potentially ) 2000 lakh Grahaks who will carry out DIGITAL PAYMENTS using RuPay / UPI-AEPS , barely 15 lakh ( less than 1 % ) , will win prizes , totaling ( possibly ) , Rs 200 crore ( average of Rs 1,333 per winner )

That translates to :

In Daily Draw, by spending Rs 1500 ( ave of Rs 50 - 3000 ) , you get a 1 chance in 100 ( 15000 out of 16 lakh ) to win Rs 1,333/- !  99 % OF THE GRAHAKS , WILL WIN NOTHING !

In Weekly Draw , By spending same amount ( Ave of Rs 1500 ) , you get 1 CHANCE IN 112 LAKH TRANSACTIONS ( 16 lakh transactions / day* 7 days ) , to win Rs 1 lakh !

But then , of course , all LOTTERY SCHEMES work this way , with a very SLIM CHANCE of winning . It is always a " LONG SHOT / LOW PROBABILITY " of winning

Now I submit the following suggestion for consideration by  Shri Narendra Modi-ji :

*  The average value of a transaction is Rs 1,500 ( ave of Rs 50 - 3000 )

*  Government collects 15 % tax on each transaction ie : Rs 225 per transaction

*  Let Government declare :

   Out of this tax amount of Rs 225 , we will deposit into an automatically 

   created  DPF ( Digital Provident Fund ) account of each user , Rs 22.5 ( 10%

   of tax collected )

   

   Of course , actual amount to be deposited into DPF will vary from case to

   case depending upon actual transaction / tax value

   

IMPACT  :

*  With each and every digital payment , user's DPF account grows , providing a

    POST RETIREMENT SOCIAL SECURITY

    

*  Unlike PPF , withdrawals from DPF , will be taxed at a moderate 5 % rate

*  This will motivate 100 % users to use digital payments and benefit , instead

    of just 1 % of users benefitting !

    

*  Within 12 months , we would have created 800 million DPF accounts, as 

    against 200 million EPF / PPF accounts , created over past 50 years !

  

*  Government can invest DPF corpus into Infrastructure SPVs to generate jobs

*  BJP will win all 5 upcoming State Elections with a whooping majority - without

    SC / EC calling it a " Freebie " !

   

Dear Narendrabhai :

In the forthcoming Union Budget on Feb 01 , I urge you to introduce my suggestion of :

DIGITAL  PROVIDENT  FUND  ( DPF ) , which will , popularly come to be known as ,

NDA Inc's " 10 % of Tax " CASH BACK SCHEME !

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

17  Dec  2016

www.hemenparekh.in / blogs

 

                                    

One Up on Donald Trump ?

US President-Elect , Donald Trump has proposed to reduce US Corporate Income Tax from 35 % to 15 %

He hopes that this will work as an incentive for US Companies operating abroad to resettle their manufacturing operations back to USA , thereby creating jobs in USA

Earlier , the then British Chancellor of Exchequer , George Osborne,  too had proposed to , reduce UK Corporate Income Tax from 30 % to 15 % , in order to counter the thinking of many foreign companies planning to pull out of UK after BREXIT, resulting in job losses

Now , even if this Corporate Tax reduction does bring , some overseas manufacturing operations of American Companies back home ( to take advantage of lower taxes to increase profits ) , that may not result in increased jobs !

Here is why :

*  More and more American Companies are resorting to ever-greater 

    AUTOMATION ,needing less and less workers

    

*  With Solar Power tariff expected to drop to a mere 4 CENTS PER KWH ( Rs

   2.8 ),electric energy required to power those ROBOTS , is getting dirt cheap !

   Nor do robots unionize / demand higher wages / go on strike or get tired after    8 hours !

*  Increase in generation of cheap ( at exponential rate ) Solar Power will generate massive unemployment in the US Oil / Gas industry ( no way , Mr Trump can stop this )

  

Just as every company is trying its best to reduce manufacturing costs, in order to become a " LOW COST COMPANY " ( in relation to its Competitors ) , so does every COUNTRY also try to turn itself into a " LOW COST ECONOMY "

How can India become such a " LOW COST ECONOMY " ?

I have given some suggestion in this regard in my blogs :

*  "  AUTOMATIONIS INESCAPABLE " 

     { http://myblogepage.blogspot.com/2016/11/automation-is-inescapable.html  }

*  "  UNLIMITEDPOWER - AND AROUND THE CLOCK ? "

    {  http://myblogepage.blogspot.com/2016/07/unlimited-power-and-round-clock.html  }

*  "  SUN  IS THE  SOLUTION  "

    {  http://myblogepage.blogspot.com/2016/09/sun-is-solution.html  }

To the list of measures that I suggested in these blogs , add the following :

   Reduce the " COST of ENERGY " by accelerating generation of Solar Power

   We must meet our target of generating 100 GW of Solar Power by 2022 , ie : 15 GW per year ( as against Chinese adding 14 GW per year )

   

   We just cannot compete with others by using Oil at $ 50 per barrel !

   Over the past 2 years , Solar Power Plants being set up in India have dropped their prices per  Kwh from Rs 7.6 to under Rs 4.0 !

   

   Last week , Amplus won the bid for the 500 MW rooftop grid connected scheme by quoting as low as Rs 3.0 per Kwh !

  

 This is just a beginning of a  SOLAR POWER REVOLUTION  in the making !

 On 29 Nov 2016 , news papers reported :

" The cost of solar power has dipped well below the ₹3-mark, if software major Infosys is any example.

The company has 6.6 MW of ground mounted solar capacity (and another 600 kW on the roofs) at its Hyderabad facility. The cost of generation of electricity, averaged over 20 years, works out to  ₹2.85,  Infosys’ Executive Vice-President, U Ramadas Kamath, told BusinessLine recently. "

Now imagine what it could do for the Indian Economy , if solar power were to be made available to homes/commercial establishments / industries, at 29 PAISE PER KWH ?

If we were to believe Techno-Guru , Tony Seba ( author of " Clean Disruption " ) , this will happen by 2030 !

In his book , he writes :

" Solar panel costs have dropped from $ 100/W in 1970 to $ 0.65 / W in 2013....Every time industry capacity doubles, costs drop by 22 percent ....

Furthermore, as soon as 2015, two-thirds of Americans will be able to buy unsubsidized solar power at rates cheaper than what they currently pay for their utilities

Panel costs are so low they are not the main cost factor in residential and commercial solar power plants. More than solar panels, so-called soft costs now account for a higher percentage of total installation costs . Soft costs include, the cost of permits, regulations, taxes, interconnection fees , inspection and installation

Globally , solar PV installed capacity has grown from just 1.4 GW in 2000 to 141 GW in 2013 .. a compounded annual growth rate of 43 percent

Should solar PV continue to grow at 43 percent annual clip, the solar capacity installed base will be 56.7 TW by 2030

Should solar continue on its exponential trajectory, the energy infrastructure will be 100 percent solar by 2030

The cost of fuel ( the Sun ) is zero . The ongoing costs of operations and maintenance ( O&M ) are close to zero

CONSEQUENTLY, THE COST OF BORROWING THE CAPITAL ( THE INTEREST RATE ) CONSTITUTES MOST OF WHAT A SOLAR USER PAYS FOR SOLAR ENERGY

For Lancaster ( a county in USA ) , the cost of Solar Power ( cents per kwh ) was 7 cents at interest rate of 10 % ( on capital employed ) . It dropped to 3.5 cents per kwh , when interest rate dropped to 1 % "

SO , IT IS CLEAR THAT THE " TRICK " LIES IN BRINGING DOWN THE INTEREST RATE FOR SOLAR POWER PLANTS, TO 1 % OR LESS !

Including Japan , Australia , Canada , Eurozone , S Korea , Sweden , UK  and USA , many countries have managed to keep their Central Bank interest rates , at 0 % - 1 %

At least for SOLAR POWER PLANT ( SPVs ) , can we bring down the interest rate to 0 % ?

This is entirely possible ! Read my blog : FROM  GREED TO  GREAT 

{  http://myblogepage.blogspot.com/2015/10/from-greed-to-great.html  }

But our PARALLEL  GOAL ( parallel to making India , a LOW COST ECONOMY ) , is to :

*  INCREASE EMPLOYMENT ( to take care of 12 million people getting added to our work force , each year )

By itself , a mere " Reduction in Corporate Tax " , is unlikely to motivate Companies to hire more persons ( what Donald Trump , is planning )

But they will hire more if that REDUCTION in Corporate Tax , is directly linked to the number of persons they employ

That is :

THE MORE THE NUMBER OF PERSONS THAT A COMPANY EMPLOYS , THE LESSER THE ( INCREMENTAL ) CORPORATE TAX IT PAYS !

A frame work of how this DEPENDANCY ( of tax on employment ) can be implemented , is explained in my blog :

"  INCENTIVIZING   EMPLOYMENT  "  

{  http://myblogepage.blogspot.com/2016/08/incentivizing-employment.html  }

Call it , " Killing Two Birds With One Stone "

Doing better than Donald Trump is no big deal , if there is political will  !

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

16  Dec  2016

www.hemenparekh.in / blogs

To Catch Black Money , Ask Google ?

For over a year , I have been sending emails to NDA ministers / Secretaries / MPs / MLAs etc , to persuade them to come out with NEW PLASTIC notes ( Rs 500 / 1000 ) , which are embedded with RFID micro-chips ( thinner than human hair and costing 30 paise each )

This simple / cheap innovation , based on GPS / IoT / IndiaStack based technology platform, will then enable IT / ED departments to visualize on their mobiles / tablets / desk-tops , any accumulation of ( say ) , 1000 notes of Rs 2,000 denomination, in an area of ( say ) one square meter, anywhere in India !

Then , there will be no place for any such ACCUMULATION / CONCENTRATION , to hide !

Now I suggest another ALTERNATIVE where Google can help IT / ED to locate such hoards of BLACK MONEY

Scientists at MIT ( including NRI , Ramesh Raskar  /  email = raskar@mit.edu ), have developed a TERAHERTZ CAMERA that can " read pages of a book, without opening the book "

If our Policy Makers were to request Google , to modify its Mobile Operating System ( ANDROID ) , in such a way that it converts cameras built into any Smart Phone , into TERAHERTZ CAMERAS , our problem gets solved !

And all that RBI has to do , is to provide to Google , the Serial Numbers of ALL of our NEW , high denomination notes , for storing in Google Cloud Database

Now , this TERAHERTZ CAMERA of an ANDROID based smart phone ( some 80 % of smart phones are Android-based ) lying in my pocket, will " read " the Serial Numbers of all currency notes ( also lying in my pocket ), compare each with the Google Cloud Database , compute the TOTAL VALUE of the high currency notes in my pocket and send an ALERT to IT / ED departments !

But then, rarely a huge amount of the HIGH DENOMINATION notes , are carried in shirt / pant pockets

These are lying in steel cabinets at home or in bank lockers

There is NO technical problem in equipping these Cabinets / Lockers with small internet connected and GPS enabled , TERAHERTZ CAMERAS , talking to IT / ED departments !

Of course , embedding Rs 500 / 2000 notes with RFID sensors has other advantage of being able to DETECT any large amount of Rs 500 / 1000 notes getting transported in any vehicle

NDA government has already " mandated " , Indian Automobile Manufacturers to install RFID chips into all vehicles ( from 2018 ) , so that these vehicles do not need to stop at toll nakas and that the toll gets collected automatically.

So , those RFID chips built into the vehicles ( for toll purpose ) can also be configured to talk to the chips embedded into the notes being transported and alert the IT / ED !

And what is the difficulty for the government to mandate all manufacturers of STEEL CABINETS / BANK LOCKERS , to pre-install RFID chips in their products ?

When it comes to catching the BLACK MONEY hoarders , leave no stone unturned !

A report from LIVESCIENCE ( http://www.livescience.com/56054-new-tech-could-read-closed-books.html )  describes this technology as follows :

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

Using technology akin to X-ray vision, scientists can read CLOSED  books, identifying letters printed on stacks of paper ......

The researchers used a TERAHERTZ camera to scan a STACK of card-size, 300-micron-thick sheets of paper. Each had a single letter about 0.3 inches (8 millimeters) wide written on only one side in pencil or ink.

Another possibility of greater use in daily life may be "future scanners that can scan through large amounts of documents WITHOUT HAVING TO  MECHANICALLY SEPARATE  THE PAGES, which could be useful for libraries, BANKS and others," Heshmat said. " Such a future scanner wouldn't use terahertz waves, but perhaps infrared light."

Other potential industrial applications may include analyzing any materials organized in thin layers, such as layers of paint or coatings on machine parts or pharmaceuticals, Heshmat said.

The scientists detailed their findings online today (Sept. 9) in the journal Nature Communications.

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

It is high time we find technological solutions to the problem of elimination of Black Money , where there is no scope for human interpretation / intervention / influence !

I have no doubt , Minister for IT , Shri Ravi Shankar Prasad can get his team to implement these solutions , within 3 months

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

14  Dec  2016

www.hemenparekh.in / blogs  

Conundrum ? Chaos ? Catastrophe ? Cataclysm ?

With 32 days down , leaving only 18 to go ( from those 50 days in which Shri Narendra Modiji had envisaged a " Changed India " , and barely any sign of that change  ) , it is but natural that the concerned Ministries / Agencies / RBI / Public Sector Banks etc , are having a  PANIC ATTACK  !

SYMPTOMS of ATTACK :

*  Frequent extensions of deadlines for acceptance of OLD notes by various agencies

*  Making many services FREE from payments ( Govt to pick up the tab ? )

*  Making banks work on week-ends / holidays

*  Making Cash Distributing Agencies / Notes printing presses, to work around the clock

*  Ordering ONE BILLION  plastic notes of Rs 10 denominations

*  Appointing a Committee of Chief Ministers to suggest ways for going CASH LESS

*  Introducing prizes / awards for DIGITAL PAYMENTS , to panchayats

*  Conducting classes for educating Government Officers in DIGITAL PAYMENTS

*  Launching exclusive TV channel / Help Line for helping citizens to go digital

*  Launching ( perpetual ? ) AMNESTY SCHEME in the guise of IT Act Amendments

*  Planning " Tax Incentives " for Buyers making DIGITAL PAYMENTS

*  Planning " Incentives " for Merchants accepting digital payments

*  Considering introduction of " Jan Dhan Yojana " like scheme for users in Rural / Semi

   Urban areas , who use Credit / Debit cards

*  Government ordering TEN LAKH Card Swipe machines for delivery in 100 days

*  NABARD ordering TWO LAKH , Point of Use machines ( for Rs 6,000 each ), for giving

   FREE , for use by 2 shops , in one lakh towns of 10,000 people or less

*  Offering tiny discounts on purchase of petrol / diesel / Life Insurance etc

*  Offering Credit / Debit cards to farmers for buying seeds / fertilizers etc

*  Imposing limits on weekly withdrawals of cash from Jan Dhan accounts

By no means , this is a comprehensive list

And be rest assured that there will be 18 new / additional announcements in the remaining 18 days !

WAS  ALL  OF  THESE  AVOIDABLE  ?

May be not ALL,  but certainly MOST what is causing hardships to common man , was avoidable

IS  A  ROLL  BACK   POSSIBLE  ?

Short answer :  NO

Long answer  :  You just cannot " Unscramble , a scrambled Egg " !

WILL  ALL OF  THIS  SUFFERING  ELIMINATE CORRUPTION ?

Yesterday , I heard of the seemingly strange case of an IT officer " offering " bribe to a businessman , instead of " demanding " it !

He told this businessman :

" I will OK your tax return without disallowing any expenses , if you give me ONE new note of Rs 2000 / - in return for ACCEPTING my 5 OLD notes of Rs 500 each , and obliging me "

May be this " innovation " was not envisaged by the authors of Demonetization !

Already , raids by ED all over the country, are finding hoards of NEW notes of Rs 2000 , which are slimmer / lighter and easier to carry ! Soon, it will be " back to square one " !

IS   IT  TOO  LATE  TO  SALVAGE  THE  SITUATION ?

No !

In our population of 1300 million , may be 1.3 million had huge amounts of unaccounted / untaxed cash in Rs 500 / 1000 notes, totally disproportionate to their known sources of income - and hidden in home cabinets or bank lockers .

For the rest, those few high denomination notes were strictly " in proportion " to their known sources of income . There was no need to harass these people , in order to locate those few / hidden / huge bundles of illegal cash

But sudden / abrupt " demonetization " caused just that harassment !

All that was required was a slow / gradual " replacement " of OLD notes with NEW notes , over an overlap period of 6 months - except that those NEW notes would be embedded with RFID chips !

Ordinary / honest / tax-paying / law abiding citizens would not have even raised an eye-brow with such a technological " intervention "

If anything , they would have welcomed it since that would have allowed them to continue buying their vegetables / groceries / bus tickets , without having to queue up in front of ATM machines !

It is still possible, not merely to " salvage " this " operation gone bad ", but permanently eliminate the twin menaces of CORRUPTION and BLACK MONEY generation, by embedding high denomination currency notes , with RFID micro-sensors !

I have sent my proposal ( Embracethe Inevitable ), to NDA Ministers / Secretaries , on 13 Nov 2016

 { myblogepage.blogspot.in/2016/11/embrace-inevitable.html   }

I am sure our Policy Makers are not so naive as to believe that human greed can be wished away by a " dictate " !

Neither Communism , nor Socialism , nor Capitalism has ever succeeded in conquering greed , anywhere in the World .

Did they really believe that those 1.3 million BLACK MONEY holders will come forward and declare their ill-gotten wealth , through persuasion ?

And , did they really believe that , even if they did so NOW ( to escape jail ) , they will not start , all over again , as soon as sufficient numbers of Rs 2,000 notes became available ?

For an answer  , do read... " Fearworks better than Persuasion " ( 10 Oct 2016 ) , 

{  http://myblogepage.blogspot.com/2016/10/fear-works-better-than-persuation.html }

Implementing my suggestion at this stage , cannot erase / reverse, the hardships suffered by common men - and the damage inflicted on the economy ,

BUT

It will ensure that ,

*  The country stops sinking into what is turning out to be an ECONOMIC QUICK SAND

*  Shri Modi is able to restore the CONFIDENCE that poor Indians have placed in him

*  BJP does not lose those 5 State Elections coming up in the next 12 months

*  CORRUPTION / BLACK MONEY , are permanently eliminated !

If  Caesar  chooses to ignore this " Beware of the Ides of March " , the ominous writing is on the Wall !

Time is running out !

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

13  Dec  2016

www.hemenparekh.in / blogs