For almost seven decades since independence, India has been grappling with the menace of black money [and corruption]. Despite political parties of all hues making lofty promises to stem it, it has only increased leaps and bounds assuming monstrous dimensions. Prime minister, Modi who was catapulted to the seat of power on the promise of rooting out this menace [besides delivering good governance and inclusive development] has taken several credible steps viz., plugging loopholes in existing laws/enacting new laws, streamlining procedures /processes and cutting bureaucratic red tape to curb its generation. These efforts continue unabated. Meanwhile, a huge stock of black money already existing in the economy [courtesy, rampant corruption and mis-governance in the past especially the period 2004-2014, better...
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Category: Welfare schemes
EMPOWERING THE PEOPLE
Prime Minister Modi’s demonetisation drive is a master-stroke which will lay the foundation for double-digit growth When the four-month window (June 1 to September 30) for the declaration of black money under the Income Declaration Scheme (IDS) was open (under it, a person could pay 45 per cent of disclosed amount (30 per cent tax plus 15 per cent penalty) and thus, convert black in to white), Prime Minister Narendra Modi had issued a veiled but stern warning to tax dodgers. He opined that persons who do not come clean now will be dealt with a heavy hand after September 30. Based on information collected from various sources viz, banks, property registration offices, jewellers and other platforms, where big ticket...
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Demonetization of 500/1000 notes – body blow to black money
When, the 4 months window [June 1- September 30, 2016] for declaring black money under income declaration scheme [IDS] was open [under it, a person could pay 45% of disclosed amount (30% tax plus 15% penalty) and thus convert black in to white], prime minister Modi had issued a veiled but stern warning to tax dodgers. He opined that persons who do not come clean now, will be dealt with a heavy hand after September 30, 2016. Based on information collected from various sources viz., banks, property registration offices, jewelers and other platforms where big ticket transactions are done, finance ministry had compiled a list of 9 million persons who spent up to Rs 1 crores in previous year but...
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FINDING THE MONEY FOR CHANGES
The Union Finance Minister has reason to both feel happy and worried. There have been considerable savings on account of subsidy slippages and earnings through spectrum sale. But there still are strains on revenue generation In the wake of the recently concluded spectrum auction yielding around Rs 32,000 crore less than the budgeted amount of Rs 64,000 crore for the current year, Union Minister for Finance , Arun Jaitley exuded confidence that this would not come in the way of his achieving the fiscal deficit target of 3.5 per cent of GDP set for the year. Jaitley’s confidence stems primarily from the success of the Income Declaration Scheme (IDS) announced in the Budget for 2016-17 and launched on June 1,...
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Darkness amidst sunshine
At present, India is the fastest growing economy [registering a growth rate of around 7.5% for two consecutive years viz., 2014-15 & 2015-16 and likely to be even higher during the current year as well] at a time when majority of economies – developed and developing – are either stagnating or caught in low growth trap. That makes us feel really very proud and confident. An equally heartening fact is the increase in the number of high net-worth individuals [HNI: defined as a person having wealth of US$ 1 million] to over 200,000 during 2015 [from 180,000 in 2014]. That makes India home to ‘Fourth’ largest population of HNIs in Asia-Pacific [APAC] region. Together, these HNIs account for US$ 797...
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Fiscal consolidation – Jaitely is on course
The much touted spectrum auction has ended in a fiasco. As against an astronomical over Rs 560,000 crores being the expected proceeds from the auction, the actual sale has been a little over 10% or Rs 65,000 crores. Of this, around Rs 32,000 crores will be available during the current year. Critics aver that this will cast a shadow on the ability of finance minister, Arun Jaitely to achieve the fiscal deficit target of 3.5% of GDP [gross domestic product] during the current year. This is because under this head alone, there will be a shortfall of Rs 32,000 crores vis-à-vis the projected level of Rs 64,000 crores. Significant shortfall is also expected in proceeds from divestment of government equity...
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Break doles – ‘poverty line’ nexus
About a year and half back, Modi – government had constituted a 16-member Task Force [TF] under the chairmanship of Dr Arvind Panagariya, vice chairman, NITI Aayog to define an official “poverty line” [a threshold income; a person whose earning is below the threshold is considered poor] which will enable determination of how many people in India are poor? In its report, the TF has stated:- “In view of this lack of consensus (among states), the Task Force recommends that an expert group consisting of the country’s leading specialists on poverty consider the issue in-depth and recommend the poverty line India must adopt for tracking of poverty.” The recommendation is ‘unusual’ and ‘puzzling’. If, a high power committee headed by...
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Advancing budget date – freedom from British legacy
The news of Modi – government seriously pursuing changing the date of presentation of Union Budget from the last day of February [a practice continued from the British era] to last day of January is music to the ears of every one who has lived with the pains and nuances of the extant dispensation. The last time India de-linked from the vestiges of colonial raj [though that was more symbolic] was also under NDA – government then led by Vajpayee. In 2000, it switched over to presenting the budget at 11 AM instead of customary 5 PM on last day of February [a follow-up to presentation of British budget earlier in the day]. Reform is in DNA of NDA Such...
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Shun subsidies, go for income support to poor
Prime minister, N Modi was romped to the seat of power on the promise of fulfilling the aspirations of 1.25 billion people of India. Those aspirations include rooting out corruption, inclusive development, jobs for all, house for all, electricity for all homes, toilet in every home, subsidized gas for all poor households, road connectivity for all habitats, model villages, smart cities, to name a few. True to his promise, he started in all earnestness implementing policies and programs to achieve these highly ambitious goals. His deliverable so far are a matter of tremendous relief and bolster confidence of the public at large about his ability to reach the goal post. It is worth mentioning some of these here. 220 million...
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Reining in tax dodgers – Modi style
There has been a long held view that Indians are not used to paying taxes fundamentally because the tax rate is too high and that acts as a deterrent. This could have been true for a while when in 60s, the maximum marginal rate of income tax was a high of 90%. But, to argue that this is the sole reason for people not paying taxes would be travesty of the truth. The proof of pudding is in the eating. Ever since the process of economic reforms and liberalization started 25 years ago [1991], the income tax rates – both personal and corporate – have progressively come down. Today, the maximum marginal tax on personal income @30% is significantly lower...
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