Wednesday, 26 December 2012

Policies can be made to reduce Black Market Economy

In present times, focus of Govt. Agencies is mostly on big ticket transaction only. But this type of policy measure makes normal person wary of it and then they try to conceal of it. Right now, there is no inducement for them to use proper channel to complete their transactions. If they use proper channels, then revenue generated will be included in our economic statistics.
We can induce the person spending him money to pay through banking channel.
For example gave tax payer deduction of say maximum of Rs. 500 per month per dependent for his milk expenses provided he buys through check, credit card, or any other mode which can be easily monitored.
 Tax payer should be rewarded for using banking channel for his purchases on groceries, clothing, and payment of services as well.
 There are many services which normally are not accounted for like house painting, marriage expenses, apparel, footwear, education (that included private tuition fees), traveling, etc.
 Since Govt will surely earn on VAT for these items so they can surely gave incentive to the purchaser as well.
However Government can create rules for it. Like setting of some range for which deduction in income will be provided or only a percentage of the expense will be allowed to be deducted.
Since the returns are now electronically uploaded than we can ask from him his invoice details as well like TIN, etc. There is no need for asking him physical copies of it.
The seller will have to make suitable return of his sale to avoid taxes.  In fact gave him tax allowance only if he pays through banking channel.
Not only this will shrink our black market economy but it will also help in reducing the dependence on currency as well. This also is a very big problem on our country where counterfeit currency is rapidly devastating our economy.

Saturday, 22 December 2012

Improving law and order in India

Immediate need is to implement Police Reform Bill that is pending in the Parliament since last many years. This will surely gives more autonomy to the Police as an Institution. What is the need of hour is to bring the necessary steps that will help in improving law and order situation to small and very small tasks that can be easily implemented and will not costs much. Like CCTV should be installed in each Police Station lobby whose recording should be kept separately. This way victim not feel harassed while lodging complaint in the Police Station. Also there should be at least 33% reservation for women in Police at each level / rank. This will also help in improving the image of the Police as a whole and normal citizen will not feel afraid of Police. There can be many more small steps we can take to improve the working of Police as a whole. We cannot just blame our Police system or the Police personnel for the poor state of law and order.

Thursday, 13 December 2012

Reducing the term of Lok Sabha and Vidhan Sabha in India to four years.

Presently our Constitution have provided a 5 Year term for the elected representatives  in our country in almost all elected bodies like Lok Sabha (in Centre), Vidhan Sabha (in States), local bodies (cities) and in Panchayats (at village level).

Our Constitution makers might have thought at that time that to make a useful contribution to the country our elected representatives need much time to make plan, create schemes and implement them. They were of thoughts at that time each elected representative will work honestly and integrity for the development of our country or region for which he is elected.

They at that time NEVER have thought of the evils of corruption. We are not signifying that all the elected representatives are corrupt and not working for country's goals. What our aim is to bring attention to the nature of problem our political structure is facing. Also I felt that anti-incumbency factor might have been unheard at that time (near to our independence when our Constitution was put into force).

Nowadays it has been observed that most of elected representatives for first 3-4 years takes everything for granted and do for their own means and had no botheration for the development of the people or for country. But in the last 1-2 years of their term, they started doing some window dressing and present their 5 years period in flying colors at the end of the term. So that general public at large will forget their rule of first few years and will remember the last leg of their term.

What is being suggested is to reduce the term to 4 years for any elected body. This will however cause little increase in average expenditure due to elections being held more early, but the benefits will be very huge. Whoever is elected will be more conscious of their working as they will be facing the elections more early now. At least MP's , MLA's will deliver for last two years of their four years terms. This will force Governments to avoid slackness in policy creations and their implementations.

Saturday, 8 December 2012

FDI in retail sector in India

Few days ago, Central Govt. was able to defeat the bill that was introduced against FDI in retail sector.

If we leave the politics in this issue then also keeping other factors in mind like macro economics, employment, education and others we can easily come to conclusion that big retailers entry in our country will do more harm then the benefit that they will bring to our country.

Retail is the most easy type of venture to start. That is why most of our population who do not have proper education or finances to start any other occupation starts a retail venture. And for this purpose they also use their residential space as well.

A person can easily start a roadside hawker for grocery or a snack / pan counter for fulfilling his livelihood. Problem is not that he will not have customer, but those customer will ask for the same price as that of big retailer and ask for bargain.

Indirectly in this situation that small retailer whose family is also involved in this venture is facing stiff competition from big chain retailer.

In fact just look the Biyani group  Big Bazaar chain could not face stiff competition from Reliance and Easy Day and Bharti Walmart Best Price wholesale chain.

If Govt. is really to contribute this sector then it should make some mechanism to education small retailers of sales methodologies, management technique, and other points that will help them to make educative decision.

But on the other hand Govt. should try to bring FDI in other sectors like manufacturing, education,  shipping, highways , power generation and distribution, Railways and others rather than in retail sector. Although this may have some bad sentiments on rising stock exchange indices, but corporate India have no stake for welfare of poor and small retailers.

If the corporates needs to expand their bottom lines, then why they are not entering into other above mentioned sectors.

FDI in retail sector should be opened after careful thoughts only. The passing of Bill in Parliament does not meant that mass population had approved of it. Parliament in constituted by political parties and they have their own interest in voting for or against the bill or remain absent from it.

Thursday, 6 December 2012

GST should be implemented as soon as possible.

Recently in few years, we are seeing a shift towards creating a  retail or a service sector. This is making the manufacturing sector especially small and medium dieing out.

In present time, manufacturing as a business have become very difficult. There are so many  different formalities to be filled up. There are also multiplicity of Agencies that have to be dealt with which discourages entrepreneurs to consider manufacturing as their Business. Also exiting from a Manufacturing business is also difficult.

This is making even small items like stationary, toys, etc. to be imported as well.
 
Central Govt. should try to implement General Salas Tax as early as possible to encourage manufacturing. This will at least ease the tax related difficulties faced by our entrepreneurs.
Also the rules of the GST to be simplified that makes the decision making with regards to rates of taxes/ classification of items easy.


Thursday, 29 November 2012

Increase in number of IAS, IPS seats in UPSC exams

Our country's population have increased to more than 1.2 billion. Also the structure of population also got changed dramatically. Earlier at the time of independence, level of education was not so high. Also the urbanization of the population was very low. Now in this period education, urbanization  levels have increased to very high levels. Also the nature of employment have also largely shifted from Agriculture to Manufacturing and now to Service Sector.

So the number of administrative officers that are required for a particular number of population must have increased than that was in past. But UPSC had not increased it's number of seats of IAS or IPS officers much in last few years. This had caused not only the degradation of law and order but also it had very strongly affected other factors like economic growth, regional imbalances, unemployment, etc.

This situation had more affected the remote and rural areas  of the country. In fact right minded officers are more likely to stay in developed cities and states. This had caused development not reaching beyond the city limits of state capitals and big cities.

Our country needs good numbers of capable officers for the underdeveloped areas  and to reduce the income gap of the population. The more hands we have the more we can thought of various issues like foreign policy, industrial growth, macro economy and others which will affect our country's future.