"Judge a man by his
questions rather than his answers."
—Voltaire (French,
1694-1778)
Word for the day
Natter (v)
To talk incessantly;
chatter.
Malice towards none
If 2014 Bihar elections were
Modi vs. Nitish; 2015 TN elections are Jaya vs. Karuna; 2015 Bengal elections
are Mamta vs. Sitaram; — what will be 2017 UP elections like -
Maya vs. Mulayam
Modi vs. Mulayam
Amit Shah vs. PK
Hindu vs. Muslim (Yogi vs.
Azam)
Tolerance vs. Intolerance
Where does Akhilesh fit in
this?
First random thought this morning
The central government has revised grid connected solar power
generation capacity target from 20GW to 100GW by 2022. The current installed
capacity is 5.7GW. Besides, the off-grid use of solar power is also rising
fast.
This is happening at a time when the growth in conventional power
supply is outpacing demand growth, leading to sustained fall in merchant power
tariffs. Given the economic forecast for FY17, the condition is not likely to
change materially in next one year.
Would be interesting to know how Rajan & Arun Jaitely plan to
manage PM & Piyush Goyal's ambitions, without compromising banks' asset
quality?
Could it be different this time - 3
Personally I do not prefer the term "black-money", as
(a) I am never able to distinguish one money from the other and (b) I find it
kind of racist.
From my experience I know that trading, real estate, and
bribery have been the most prominent amongst various sources of generating
un-taxed money in the economy.
Besides gold, Agriculture income and long term capital
gain in listed equities have been the most popular methods to regularize
the un-taxed money. Both these methods have been used blatantly in past decade
to evade taxes on income.
There has been a concerted effort on past of the government to
plug these avenues of tax evasion through various legislative and
administrative means.
In an ideal world, GST shall curtail under reporting of trading
income; real estate and land acquisition regulations shall institutionalize the
real estate business; and duty/TDS on purchase of valuable items will constrict
use of un-taxed income.
However, taxing fraudulent agriculture income and capital gains
will deal a fatal blow to the parallel economy.
For decades, politicians have avoided the issue of tax on
agriculture income for obvious reasons. It is common knowledge that they
themselves are the largest beneficiary of this exemption.
For statistical purpose, I may highlight that about 92.5% of
Indian farmers own less than 5acre of land. In fact only 2.24% own land in excess
of 10acres. 68% of total land is used for growing cereals and pulses and only
2% each is used for orchard and animal husbandry.
Given the standard of yields in India, it is therefore safe to
assume that 95-97% of Indian farmers do not fall in tax net (Annual taxable
income Rs2,50,000 or more). So what tax exemption politicians are debating
about is not difficult to guess.
If I am forced to hazard a guess, I would say in next five years
appx. Rs20lakh crore of income could be brought to tax net by implementing GST
& real estate regulation, and preventing misuse of exemption for LTCG and
agriculture income. The other things remaining same, this will almost double
the income tax collection.
The fringe benefits will include, material fall in housing prices (and
therefore accelerated growth in construction sector), material improvement in
banks' CASA deposits and therefore lower cost of funds businesses, better
targeting of subsidies, etc.
This combined with materially lower leakages in the public
expenditure due to use of technology, direct cash transfer, engagement of local
bodies in executions, shall be good enough to move into higher growth orbit for
Indian economy.
...to conclude tomorrow
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