Monday, 6 March 2017

Innovative Financing ?

DNA ( 07 March 2017 ) carries following news report :

“Metro rail Companies may be allowed to issue TAX-FREE BONDS “

The Ministry of Urban Development has proposed allowing agencies implementing metro rail projects to issue bonds, including TAX FREE BONDS, to raise funds for projects

The Ministry had last week held a workshop with States and Union territories to discuss the draft policy , which will soon be sent to the Cabinet for approval

While detailing the Budget for 2017-18 ( april – March ), Finance Minister Arun Jaitley had said a new metro rail policy - focussing on INNOVATIVE models of implementation and FINANCING as well as standardization and indigenization of hardware and software will be announced

Now consider this in light of the following recent report from Asian Development Bank :

“ According to the ADB estimates India would require to invest as much as $4363 billion during the 2016-30 period or an annual amount of $ 291 billion, or to 7.4% of the GDP, which is way above that of all major economies and many fold larger than the $ 118 billion currently spent.

However, mitigating climate change would require that India spend $ 5752 billion over the fifteen year period which amounts to an annual outlay of $ 343 billion or 8.8% of the GDP.”

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As you can see from ADB report above , funding requirement of Metro Projects , is only a small fraction of India’s total funding requirement for all types of infrastructure

So , why restrict TAX FREE BONDS to only METRO projects ?

In my view , this innovation must be extended to ALL types of Infrastructure Projects , as suggested in my following blog / email ( to NDA Ministers ) , some 3 YEARS ago :

Monday, 7 April 2014

Don't Ask " How " ?

At the bottom of the 42 page Election Manifesto of BJP , released yesterday , I tried to search , if in very small print somewhere , there was a footnote which read ,

" Please , don't ask how we plan to implement these promises ;

From where we plan to find all the money to execute these projects "

Here are my back-of-the-envelope estimates of what some of the MAJOR projects might cost :

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PROJECT .................................... Approx Cost ( Rs Lakh * Crores )

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· 100 Mega Cities........................ 90

· Interlinking of Rivers.................. 60

· Sagar Mala of Ports.................... 30

· Highways ( 25,000 Km ).............. 50

· Housing ( 100 mill units )............ 100

· Rivers Cleaning.......................... 10

· Other Infra Projects.................... 100

# Freight Corridors

# Gas Grids

# OFC Network

Total ..........................................Rs 430 Lakh Crores

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Admittedly , not all of these money will be required in the very first budget that NaMo government ( - of course , only if voted to power ! ) , would present by end June 2014

But a problem does not go away by postponement !

There is only ONE viable solution to the FUNDING problem , viz:,

* Union Government must NOT even try to fund these projects !

There is NO WAY , it can find these kind of money through taxation !

There will be a revolt !

ANSWER

* Make it possible for the PUBLIC to invest into these projects by " owning "

these projects - and earn a reasonable " tax-free " return on investments

( Bonds ? ) in these projects

* Towards this end , create various INFRASTRUCTURE SPVs

* Immediately modify PERSONAL INCOME TAX regime as follows :

# Up to Rs 5 lakhs..................... NIL

# 5.1 - 10 lakhs....................... 8 %

# 10.1 - 20 lakhs...................... 6 %

# 20.1 - 50 lakhs..................... 5 %

# 50.1 - 100 lakhs..................... 3 %

# Above 100 lakhs...................... 1 %

What is likely to happen with such " INVERSE TAXATION " regime ?

Following few things :

* Total personal tax payer base will go up dramatically from current 4

crores tax-payers

* with this " INVERSE TAX REGIME " , there will be no incentive to evade

taxes and to generate " BLACK MONEY "

There will be no resistance to accept ALL payments by cheque / electronic

Clearance

The more you disclose as your income , the less you pay by way of taxes

( Of course , incrementally )

* For a change , we will learn to reward honesty / efficiency / productivity !

No need to bribe those Income Tax officers !

* Suddenly , lakhs of crores of BLACK MONEY will become WHITE MONEY

* There will be a huge surge in bank deposits ( - even with , the inevitable

lower interest rates )

* Banks will be awash with funds to finance businesses / infrastructure

projects etc , encouraging entrepreneurs / self-employed to set up new

businesses ( at 2 % interest rates of loans ) and generate millions of jobs

In any case , BJP manifesto promises :

* Rationalization and simplification of the tax regime - which is currently

repulsive for honest tax payers

* The process of bringing black money to India , what belongs to India , will

be put in motion on priority

* Minimize scope for Corruption

Dear Narendrabhai ,

Here is your chance to ditch the " Historical Baggage " into the Indian Ocean

and come up with an INNOVATION that will take India ahead of China !

If President Kubitschek of Brazil ( 1956-61 ) - son of a poor salesman - could construct Capital city BRASILIA and a 1500 Km highway , in 41 months , surely , you can do better , 57 years later !

07 March 2014

www.hemenparekh.in / blogs

“ Slow and Steady “ loses the race !

Business Line ( 07 March 2017 ) carries following news :

“ Government to give a leg up to start-ups “

DIPP to make DEFINITION more inclusive , re-look tax benefits for some 200 start-ups

To give further impetus to the start-up ecosystem, the government will , before the end of this month, re-look the DEFINITION of start-ups, revisit the tax benefit eligibility of 200 odd start ups, and work towards enabling incorporation of companies within six days

“ Just as we are re-looking the DEFINITION of MSME , we would like to re-look at the definition of start-ups to be more inclusive of the ground realities “ , said Ramesh Abhishek , Secretary, DIPP

Speaking at IVCA’s Annual India Alternative Conclave 2017 here on Monday, he said the government is committed to strengthening the start-up ecosystem and was not hung up on the DEFINITION aspect

Dear Shri Abhishekji :

This is indeed a great news , considering that the original DEFINITION ( of a Start-Up ) was quite daunting , as pointed out in my following blog / email ( 20 Jan 2016 ):

START UP RE-DEFINED

No doubt , you have read the DEFINITION of a Start Up in the Start Up Action Plan document

I have tried to envisage below, how that might look on that Mobile App for Registration :

* Is yours a Private Ltd Co / LLP / Partnership ?.................. ………. Yes / No

* Is your Company more than 5 years old ?....................................Yes / No

* Is your Start Up formed by splitting an existing business ?............. Yes / No

* In last 5 yrs, has your turnover exceeded Rs 25 Crores ?.................Yes / No

* Is your product/service " DIFFERENTIATED " ?.............................. Yes / No

* Is your product / service " COMMERCIAL " ?.................................. Yes / No

* Is your product / service " INNOVATIVE " ?..................................... Yes / No

* Is your product / service driven by ,

" TECHNOLOGY / INTELLECTUAL PROPERTY " ? ...............................Yes / No

* Is your product/service ,

" NEW / SIGNIFICANTLY IMPROVED " version " ?.................... .......... Yes / No

* Does your product/service add " VALUE " to customers ?..................... Yes / No

* Does your product/service add " VALUE " to " WORKFLOW " ?............... Yes / No

* Have you got certification from Inter-Ministerial Board ?....................... Yes / No

* Have you got recommendation from Incubator in Post Grad Indian College ?.Yes / No

I hope Shri Narendra Modiji asks you to accompany him to his planned visit to Israel , in the near future , so that , together , you may get an idea of :

The Spirit of Israel ( 19 Feb 2017 )

{ https://myblogepage.blogspot.com/2017/02/spirit-of-israel.html }

If we want to win the “ Start-Up Race “ , we will need to give up on our “ Slow and Steady “ approach and hurry up to implement :

· Blue Print for a Start Up Nation ( 27 Dec 2015 )

{ https://myblogepage.blogspot.com/2015/12/blue-print-for-start-up-nation.html }

· A NEWECONOMIC ORDER ? aka " Start Up Act - 2015 "( 12 Sept 2015 )

{ https://myblogepage.blogspot.com/2015/09/a-new-economic-order.html }

With 5G internet around the corner , it will be no more,

· Big will eat up the Small

It will be ,

· Fast overtake the Slow !

07 March 2017

www.hemenparekh.in / blogs

Saturday, 4 March 2017

Internet of Vehicles ( IoV ) ?

Exactly what we need – and NOW !

On the surface , the following new reports seen unconnected .

· Business Line ( 28 Feb 2017 )

“ FASTags to be made mandatory for trucks on govt duty “

· DNA ( 02 March 2017 )

“ China introduces tracking system for toys “

· Business Line ( 16 Feb 2017 )

“ Autonomous Vehicle Management, drones could create big job opportunities :

GlobalLogic “

· Economic Times ( 10 Feb 2017 )

“ Policy to Scrap old Vehicles Gets in-principle Nod “

· The Guardian ( 21 Feb 2017 )

“ China orders GPS tracking of all cars in Xinjiang region “

· Economic Times ( 01 March 2017 )

“ Electric Vehicles for Commercial Use may not Require Permits “

· Times of India ( 21 Feb 2017 )

“ Rs 80,000 Cr plan in works to cut urban carbon footprint “

· Economic Times ( 28 Feb 2017 )

“ Jio Ropes in AirWire for Connected Car Device “

Mukesh Ambani-led telco plans to enter auto telematics with the launch of device in India under its JioCar Connect initiative

· DNA ( 17 Feb 2017 )

“ Tata Motors plugs into Microsoft “

To develop connected vehicle technologies , first such vehicle under TAMO platform to be showcased in Geneva in March

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But when you try to “ connect up “ all of these into a single , over-arching message , things become clear

Each of these initiatives is trying to solve / mitigate , one of the following problems :

· Rapidly growing Vehicle population

· New road lengths not keeping up with this growth in vehicles

· Petrol / Diesel vehicles polluting atmosphere – causing early deaths

· Deterioration of roads due to increased traffic

· Road congestion leading to increased travel time / petrol wastage

· Increasing road accidents , maiming and killing people or damaging property

· No space for footpaths for walking

· No space for bicycle tracks

· Unbearable noise pollution causing deafness

· No place for parking along public roads ( cause for corruption ? )

The list keeps growing !

There is no perfect , one-shot , immediate solution , to take care of all of these problems in one go

The news reports listed above, are attempts by companies / organizations / governments etc , to address , one or more , of these problems

I expect that , over the next 5 years , all of these will converge into an Internet of Vehicles ( IoV ), when :

· Most vehicles will be electric ( essentially , “ computers on wheels “ ), automatically determining the best / shortest, route / stops and optimizing vehicle performance . Mobile Apps will be a governing device

· Vehicles will be internet connected with one another , exchanging data

· Vehicles will be internet connected with servers of Transport Authorities / Traffic Police / Pollution Control Boards and a host of other governmental / institutional organizations , and be relaying all sorts of data 24*7 . Vehicles will report accidents ( being hit ) and thefts ( being stolen ) , on their own !

· All vehicles will carry a whole lot of “ Sensors “ , which will continuously “ monitor “ the conditions of the vehicles and relay the same to all the authorities

· All vehicles will be equipped with RADAR – LIDAR –CAMERAS – GPS locators – / Augmented Reality etc , to avoid collisions / accidents

· Prepaid RFID chips ( linked to Aadhar / Bank Accounts ? ) for Road Taxes / Insurance Premiums / Toll charges / Fines / Carbon Credits ( through DBT )

· In-Built Sensors will measure , ( and request maintenance on their own ! ),

# Engine ( or Electric Motor ) temperature

# Pressures / Displacements / Compression Ratios in case of petrol / diesel

Vehicles / Battery Charge Levels / fuel consumption

# Emission Levels ( PM2.5 / CO2 etc ) in petrol / diesel vehicles

# Tyre pressures / wear and tear of moving parts / RPM

# Vehicle speed / acceleration / braking distance

# Proximity to other moving / stationary vehicles or objects

# Weather conditions / Visibility levels / Traffic Density

# Condition of the road being traversed ( co-efficient of friction )

# Condition of the person driving ( sleepy / drunk etc )

# Whatever else you want “ measured / monitored / relayed “

To know , how such an Internet of Vehicles ( IoV ) can solve the various problems listed above , you may want to read my following earlier blogs ( all sent as emails to NDA ministers ) :

· Un-ImplementableLaws : Unstoppable Corruption ( 20 Feb 2017 )

{ https://myblogepage.blogspot.com/2017/02/un-implementable-laws-unstoppable.html }