India unveiled in 55 days

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 : ------------------------------------------------------------------------------------ PROJECT .................................... Approx Cost ( Rs Lakh * Crores ) ------------------------------------------------------------------------------------- > 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 * Quadrilateral Bullet Trains ------------------------------------------------------------------------------------ Total ..........................................Rs 430 Lakh Crores ------------------------------------------------------------------------------------ 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 thro 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 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 ! * hemen parekh ( 08 April 2014 / Mumbai )