Tuesday, March 13, 2012

My Dear Finance Minister.. (and the PM too)

Dear Finance Minister, It is that time of the year when you execute the wishes of your political bosses in the matter of distribution of money that you do not earn or own. It is in line with the so called socialistic approach of the Congress party under various members of the Nehru family. You take away money from honest tax payers and give it away to sections of society who you think are relevant. You say that you are alleviating poverty, but I have a right to think that you do this in order to try and protect or grow your vote bank. Sir, your rulers have destroyed and defiled the constitution to an extent that we now have sections of society fighting and protesting to get ‘notified’ as ‘backward’. Nowhere in the world would someone fight to be classified as being backward. I have no issue with this on you. I am resigned to the fact that you will dip your hands in to the pockets of citizens who earn and pay taxes. However, what I want you to do is to stop enriching some sections of society. You are well aware that no one joins politics for the legitimate salary that it offers. A family could make a decent living out of the wages that politics offer, but hardly build legitimate fortunes. Yet, each time we now see the ‘declared’ assets of politicians who stand for elections, it is obvious why they love all your expenditure schemes as well as the authority given to them, which is obviously on sale at a price. I agree you will not stop fellow politicians from getting rich through illegitimate means. We can only hope that one fine day, the law will catch up with them, once law itself is cleansed. You do some more arbitrary things that need to be stopped immediately. Stop giving concessions to lobbies of industries. By giving a tax rebate to IT industry, you are only lining the pockets of a few businessmen. It is because of your selective favours that we Indians have a unduly large share of 4% of the world’s top 500 richest persons. Of course, in this 500, politicians are not counted. We do not want you to give tax concessions to builders, who in any case corrupt the system and have made housing in to an unaffordable word. We do not want you to give any breaks to any industry, for it simply lines the pockets of a select few. For a moment, please step back and estimate how much of revenue sacrifice is made by giving huge concessions to a handful of businessmen. If the same amount were instead passed to the poor (here you can classify them whichever way you want since you need the votes next time around) there would be better distribution of money that you dob from the tax payer. I do not buy the argument that any business needs ‘incentives’ to survive or thrive. Entrepreneurs are hungry and clever and do not build businesses solely on government protection. They merely use government protection to multiply their returns. You do this because you obviously ‘collect’ something in exchange for the party you represent. In effect, you are using the revenue sacrifice by the citizens and sharing it between the party and a handful of businessmen. I have nothing against ‘subsidies’ that are passed through diesel or fertiliser. By all means please increase it. You can easily do this if you simply stop giving concessions to select industries each year. If you scrap the plethora of exemptions that are available, tax collection and compliance would become easier. I do not understand why the Income Tax Act cannot be written in under ten pages, in simple clear and unambiguous language. Do this one reform and you will bounce back. Scrap each and every exemption or deduction. No one wants it. They only create illusions of growth and employment. For example, Infosys or TCS would still be around even if you did not give them any tax breaks. They would have created exactly the same number of jobs that are there today. So, please do not give in to temptations of collecting money for your party and give concessions. In any case, you have sufficient spending under various development programmes and infrastructure projects, which contribute significantly to accumulation of wealth by certain persons. And the Indian citizen accepts graft in many things as a way of life, whether it is speed money or grease. What I say above goes against my grain. I am a fan of meritocracy and capitalism. However, I have realised over the years that it is futile to expect the world to be run on merit. Parasitism is for real and people like you are there to propagate it in the name of socialism and alleviation of poverty etc. I cannot change the politician. What I am seeking from you is just a better redistribution of what largesse you misappropriate. You do not care for your next generations because your station in life has permitted you to be secure for the next few generations. Unfortunately, some of us on the other side are not so blessed. It would be a good gesture if you left something on the table for the meek (only in the holy book do they inherit). R. Balakrishnan (balakrishnanr@gmail.com) March 10th, 2012

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