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

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Friday 8 April 2016

Water Wars ?


Long time back , someone had said :

The third World War will be fought over water

I don't know about World War 3 , but I have a dreadful feeling that , soon enough , a Civil War may get fought over water in our country !

For decades , our Southern States have been fighting over the waters of Krishna , Kaveri , Godavari etc

Recently , Punjab has stopped supplying water to Haryana thru SYL ( Sutlej - Yamuna Link canal )

In the meantime , 10 States are declared " Drought Affected "

Section 144 has been imposed in Latur and other cities

Armed police are deployed to protect water-stealing from dams in Bundelkhand

Thousands of farmers in Maharashtra / Rajasthan are committing suicide because of crop failures , leading to starvation

Lakhs of drought-affected villagers are migrating to city-slums / railway platforms / under the city-bridges

Villagers are refusing to marry their daughters to youth in drought affected villages

Lakhs of women are trudging 10 KM in 40* C temperature to fetch a bucketful of water

Even children ( under age of 10 ) are leaving studies and waiting with pots , for the arrival of water tanker

Maharashtra CM , Fadnavis says : You may shift the IPL outside Maharashtra , if you wish  ! We are not supplying POTABLE WATER to stadiums !

What is holding him back to say : Sorry , potable or not , I will not allow IPL
to WASTE , 60 Lakh liters of water , under any circumstance !
  
Several World Bodies have forecast that by 2050 , millions will die in India due to water shortage


WHAT  IS  THE  PERMANENT  SOLUTION  ?


At the level of Central Government

*   Make " Water Conservation / Usage " , a  CENTRAL SUBJECT  in our
     Constitution . Remove it from the list of STATE SUBJECTS

*   Declare all existing sources of water ( Rivers and Lakes ) , as National
    Resources belonging to entire Nation and not to the particular State
     where these are  located

*   Make it Center's responsibility to decide which State shall use how
     much of each of these resource ( allocation / rationing )

*   Center will also be responsible for developing of future resources by
     digging lakes & ponds / building dams / interlinking rivers & lakes etc
     Use MNREGA funds for creating such assets

*   Center will not need permission of any State to implement such projects

*   Center will implement " River Interlinking " Project by 2025 , and for this,
     it will not require permission of any State

     As repeatedly lobbied by me , please find a way to divert BLACK MONEY
     to this Infrastructure SPV ( Tax haven or local - which is 100 times ! )

*   Mercilessly , shut down all factories dumping polluting effluents in rivers


#   At the level of State Governments

*   Make following mandatory for ALL buildings ( existing or future )

    +  Rain water harvesting system ( this tank to supply toilets / sinks etc )

    +  Recycling of water from Kitchen / Shower / Wash Basins, for use in
        toilets , by installing a simple sand filtering tank in society compounds

    +  Installation of water flow restricting devices in all taps

    +  Mechanism which stops water flow when hands are removed under tap

    +  Water Supply Cut of 25 % , round the year

         Do not raise Water Charges . The higher the charges , more ways will
         be found to evade ( as in case of Personal Income Tax ! )

         Water meters will get tempered or bypassed !


Note the following :

   

*   Of all the water that rains bring , 99 % flows out to seas, leaving 1 %
     on land

*   Out of this 1% , 99 % percolates into the ground , leaving 1 % ( of that
     1 % ) , into lakes above the ground !

*   75 % of earth's surface is covered with seas / oceans . So , really , there
     is PLENTY of water

*   Nature ( Sun ) has gifted the Earth with evaporation / condensation cycle
    which converts the salty sea water into distilled potable water,
    automatically / continuously , and deliver onto the land masses

    Amount of water falling as rain on land each year is 2.4 trillion meter cube ,
    more than 10 times the annual requirement of 7 billion earthlings , at the
    rate of 100 litres per person per day !
     

    As far as India is concerned , all that is required , is to dig 700,000
    ponds / lakes ( one in each village ) , where we capture / store rain water

*   These 700,000 ponds must be lined with Geo-Synthetic Fabrics to ensure
    that the captured water does not seep underground - a simple technology

*   Capturing most of rain water in these ponds , will raise the water table in
    bore wells

*   None of the above suggestions require Rocket Science !  But , even if it
    does , our Scientists who have sent Mars Orbital Mission , are quite
    capable of finding appropriate solutions !


I hope the Center / the State Governments and all the political parties , rise
above their differences and join hands , to avoid a CIVIL WATER WAR !


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www.hemenparekh.in / blogs

09  April  2016

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Thursday 7 April 2016

Short-Circuiting of Round-Tripping !


What is Round Tripping ?

Black Money sent to tax havens ( eg: Panama ) for laundering and which returns to the country of origin as White Money , in the form of investments

What is the Global Amount  ?

Approx $ 23 Trillion ( China's GDP is about $ 17 Trillion )

What is the mechanism ?

In India , it is LRS ( Liberalized Remittance Scheme ), under which any Indian ( including minors ! ) can remit abroad officially / legally , EVERY YEAR , $ 250,000 for any of the following reasons (and without prior RBI permission ! ) :

*  Under Current Account

   #  Medical Treatment
   #   Education

*  Under Capital Account

   #  Buying Property overseas
   #  Holding shares in an overseas company
   #  Combination of these two


What is the safeguard  ?

Details of foreign assets have to be declared in the Income Tax Returns

How black money gets sent to tax havens ?

Some amount by Hawala route but most by legitimate banking channels !
You don't see plane-loads of cash landing in Panama !

Does that mean Indian Banks are party to these ?

Without doubt ! They will advise you how to do this ! Of course, legally !

If these remittances are legal, will 500 Indians get jail ?

Forget it !

Most legal experts say , they will be let off with some fines , if they have failed to declare these assets in IT returns


Are laws designed so as to prevent Round Tripping ?

Far from that ! Here is what President Obama said yesterday :

" There is no doubt that the problem of global tax avoidance generally is a huge problem

The problem is that a lot of this stuff is legal , not illegal

We shouldn't make it legal to engage in transactions just to avoid taxes

A lot of these loopholes come at the expense of middle class families

Alternatively , it means that we are not investing as much as we should in schools , in making college more affordable, in putting people back to work rebuilding roads, our bridges, our infrastructure , creating more opportunities for our children  "


What  is  the  best  SOLUTION ?

*  Make it unnecessary for our Black Money to first travel abroad ( to tax havens ) , before returning ( as White Money ) and getting invested in capital market

*  Short-circuit the Round Trip by enabling our Black Money to become White Money , HERE  itself ( no need for help from Mossack Fonseca ! )

*  As suggested in my recent blog ( Make India a Tax Haven ? ), abolish Personal Income Tax ( remove incentive for tax evasion )

*  Enable direct investment of " Black-turned-White " money into government approved INFRASTRUCTURE BONDS , thru creation of designated bank accounts where Black Money can be deposited , without any questions asked

*  Obviously , interest / dividend earned from such investments will be tax
free , being Personal Income  !


Is this a practical solution ?

Not if you ask the Economists / Bankers etc

Just ask the man on the street  !

This is too serious matter to be left to the Experts !


Will such a bill pass the legislative muster ?

Rahul Gandhi promised to pass the GST bill in 15 minutes if amendments proposed by Congress get incorporated

" Short-circuiting of Round-Tripping Bill " will get passed in 5 minutes - and unanimously too !  You know why !

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www.hemenparekh.in / blogs

08  April  2016

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Monday 4 April 2016

Making India a Tax Haven ?


Yesterday's leak / report " PANAMA PAPERS ", revealed that some 500 Indians have stashed away abroad , billions of dollars worth of " Undisclosed Assets " , courtesy Mossack Fonseca of Panama , a money laundering law firm with staff of 600 , operating in 42 countries and having a client-base of 300,000

Now Panama is not the only tax haven on earth

There are others such as Switzerland , Cyprus, British Virgin Islands , the Isle of Man , Guernsey , Jersey etc

Nor is Mossack Fonseca the only money launderer. It is only the 4th biggest

Acting unusually fast , Union Government has set up a multi-agency group to investigate and bring to book , the suspected Indian tax evaders

While wishing all luck to this Group , we cannot overlook the terribly disappointing results of the Supreme Court monitored SIT , during the past 16 months ( viz: discovery of illegal assets worth around Rs 6500 Crore )


Experts are clamoring :

*  Tighten existing laws

*  Make illegal , anonymous investments ( eg: Participatory Notes )

*  Pass law to declare all undisclosed foreign assets as " National Property "


MY  SUGGESTION :

*   If you cannot lick them , join them !

*   Abolish Personal Income Tax

*   And , instead of a Tax Return , every existing tax payer ( approx , 4 cr )
     to file , annual DECLARATION  OF  ASSETS ( Movable and Immovable )

*   Introduce Amnesty Scheme under which , no questions will be asked as
     to the source of any amount of CASH deposited in a person's SPV
     INFRASTRUCTURE account ( at any local Indian bank of his choice )

*   Encourage those 500 Indians to liquidate those Undisclosed Assets
     abroad and deposit that CASH in SPV INFRASTRUCTURE accounts

     Of course , all Indian citizens can do likewise !

*   SPV INFRASTRUCTURE accounts can be used ONLY for investing in
     government approved Infrastructure Funds ( especially funds devoted
     to Renewable Energy / Swatchh Bharat / Health / Education / Homes
     costing less than Rs 5 lakhs , etc )

*   Make India a Tax Haven of sorts !

 
By no stretch of imagination , I am suggesting that India becomes a destination for parking

 *   Drug Mafia money

*    Terrorist Money

*    Bribe Money for international purchase contracts ( defense etc)


All I am saying is :

*    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


It is time to stop tinkering when govt has miserably failed to bring out black money stashed abroad (or locally) , nor succeeded in stopping future generation of Black Money


It was good that the NDA Government raised the expectations of citizens


Now , it is time to deliver on those expectations before Assembly Elections get over in 5 States

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www.hemenparekh.in / blogs

05  April  2016

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Sunday 3 April 2016

Electoral Reforms Through Backdoor ?


While refusing to entertain a PIL of eminent citizens seeking direction to Election Commission to verify details of persons contesting polls , the Supreme Court remarked :

"  It was for Parliament to act, as the court cannot ask the Election Commission to undertake this exercise

How do you expect the Election Commission to go on verifying details of thousands and thousands of candidates ? The task of verifying details including assets of candidates is cumbersome

The election reforms are long awaited . Only they ( legislature ) can make law , but we know that they will not do this

Persuade them ( Election Commission ) , outside the court . Let us see how they respond  "


I get a feeling that Shri Arun Jaitleyji and the Income Tax Department overheard the honorable judges of the Supreme Court !

For 2016-17 assessment year, the tax department has unveiled new income tax return form

For persons with income above Rs 50 lakhs, it requires submission of following details ( with cost of each item ) :

*  All immovable assets ( such as land / buildings etc )

*  All movable assets ( such as Cash, Jewellery , Vehicles , Yachts etc )

*  All liabilities ( such as loans )


Here is what the Election Commission should do next :

*  Insist that each and every contestant files along with his / her nomination
    affidavit , copies of his / her income tax returns for past 3 years

That still leaves the question of " Verification "

Answer :

Alternative # 1 :

Using " Sampling Technique ", randomly select 10 % of the contestants and ask Income Tax authorities to verify their assets / liabilities


Alternative # 2 :

Select ( for verification ) those contestants , whose incomes have grown by more than 25 % over the past 3 returns

Electoral Reforms is merely a question of necessary " Will " on part of the Administrative wing

But even there , do not expect much when bureaucrats and ministers themselves , fail to submit their Assets Declarations to PM every year !

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www.hemenparekh.in / blogs

04  April  2016

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Burden of School Bags



A recent survey of 4569 students in Mumbai found :

*  31 % of those surveyed, carried schoolbags weighing more than the prescribed limit ( not more than 10% of child's own weight )

This issue has so much agitated everyone that even the Mumbai High Court keeps asking the Government :

"  What are you doing about this ? How and when , do you expect to solve this problem ? "

A news report in Times of India ( 02 April , 2016 ) quotes Shri B B Chavan , Deputy Director of Education , as follows :

"  Schools can't do much if parents continue to send fancy bags, heavy tiffin boxes and water bottles and tuition books "

Sure , parents can help reduce their child's burden

But , so can progressive / forward thinking / innovative schools  !

Immediate answer that comes to mind is : Use of Internet

I believe , HRD Ministry has launched a project under which , all text books will get uploaded on its web site , which any student can access freely , at any time , on his / her tablet

Simultaneously , in the last 2 / 3 years , dozens of portals have come up , which provide educational content of all kinds ( text books / quizzes / test papers / assessments etc ) , online , for a reasonable annual subscription

But the problem is :

*    Very few schools have a Wi-Fi hot spot

I suppose , it will take a few years before all schools get internet connection

Interim solution :

*   Schools to make available to students ( of each standard ) , tablets
     having on-board storage memory of 64 GB ( no need for internet ! )

*   Each tablet to be pre-loaded with scanned copies of text books

*   Icons on home page to show the " Subject Name " of text book

*   Tablets to be distributed at the beginning of each academic session

*   Students to be allowed to carry the tablets home and use for homework

*   Students to return the tablets at the end of each session

*   Tablets can be given to the next batch of students for reuse

*   Students should have option to " pay and buy " the tablet , in which case
     School Administration will load it with required text books, free of charge

     Alternatively, students can buy their choice of tablet from market

*   It will be the responsibility of school management to ensure that the
     all tablets are always pre-loaded with  the " Prescribed " text books


When schools are charging annual school-fees of Rs 30,000 / - to Rs 100,000 /- , surely they can afford to invest in tablets costing Rs 10,000/- !

Of course , poor children , attending Municipal Schools will benefit most since they cannot afford to buy own tablets or pay high fees

And since there is no internet access from these tablets , school managements do not have to worry about students accessing " In-appropriate Content " and waste their time on Facebook / Youtube etc !

I am sure, some schools here and many schools abroad , have already implemented this idea , which must have occurred to millions, earlier !


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www.hemenparekh.in / blogs


04  April  2016



Saturday 2 April 2016

Ambiguity is Bad !


Where  ?

*  Health Ministry wants warning images on cigarette packs to cover 85% of the surface , against earlier rule of 40%

*  A Parliamentary Committee had recommended 50 %

Reaction :

*  From friday ( 01 April 2016 ) , all cigarette factories have shut down in protest ,

According to Tobacco Institute of India , this will cause,

   #  Daily revenue loss of Rs 350 Crores

   #  Threatening livelihood of 45.7 million people dependent on the Industry

   #  Increase in trade in illegal cigarettes ( which already causes an annual
       revenue loss of Rs 9,000 cr to the exchequer )

What should Government do ?

 Negotiate with the Industry and reach Agreement , using my suggestion as under :

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


Source : my blog dt 18 Aug 2013

 Going Up in Smoke ?

 

Yesterday , Times of India reported :

India's tobacco industry supports 38 million people ( 380 lakhs )


Every year , some 6 million ( 60 lakh ) people die in India thru use of tobacco ( mostly cigarettes )


Of these , some 6 lakh die by inhaling smoke of other cigarette smokers


So what can we do to save these 60 lakh ?


Immediately close down entire tobacco industry ?


And jeopardize the lives of 380 lakh  ?


Obviously , we cannot adopt a mutually exclusive solution !


We must find a solution that , not only saves those 60 lakh but also continue to provide livelihood to 380 lakhs


That cannot be done in one - or even five - years , but it is entirely possible to solve this problem over ,
20 years , as follows :

*   Thru appropriate legislation , phase out tobacco industry by 2033

*   Immediately stop expansion of existing units

*   Do not allow new units to come up

*   Place a recruitment freeze in tobacco industry - no fresh hiring at any level

*   No replacement for retiring employees , after 2018

*   Provide incentives to industry to redeploy capital / manpower in alternate industries - especially those industries with large scope for creation of new jobs

*   Give generous tax-breaks to industry to remain profitable , even as they wind-up operations

*   Provide incentives to put up new-industry projects in less industrialized regions

*   Provide incentives for re-training existing workers in new skills in demand by others

*   Subsidize Voluntary Retirement Schemes of industry


This is just a partial list . I am sure , if there is political will , experts will come up with many more viable suggestions



Hint :

If Shri Piyush Goyal can plan on banning all petrol / diesel driven vehicles on roads from 2030 , then banning cigarettes from 2036 , ought to be a " Child's Play " !



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hemenparekh.in / blogs

03  April  2016

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