Monday, February 25, 2013

Dear FM, A plea, as usual..


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 the government does 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. The GDP numbers do not bother us as much as on the ground inflation does. We are struggling to cope with increasing food prices, increasing transportation costs and rents that take away a big chunk of the salary. The public servant is fortunate that their employer lavishes them with living quarters through their sinecure and somewhere along the way they manage to get land as well as a few homes. The lawmakers have “amended” the constitution to such 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. Now you have made a ‘start’ to stop the leakages in our PDS system, the ‘subsidy’ to fertiliser and kerosene etc by using what forty one other countries have done, by ‘direct cash transfer’ to those whom the government will identify as ‘needy’. Alas, other countries that have done this have had the database of their citizenry in place before they distributed money. Here, we are putting the cart before the horse. A country like ours, with porous identification methods will never get counted. I hope that perhaps some stealing from ration shops and falsification of books by fertiliser companies will stop. Of course, if a few of our elected representatives and those in government employment get hold of some of the money, no surprises. Indians are used to sharing money with the ruling class. I have no issue with this on you. I am resigned to the fact that the government will dip its hands in to the pockets of citizens who earn and pay taxes. Naturally, you cannot touch those who earn, but do not pay taxes. It will be the salaried class that will be the most ‘patriotic’ givers. Companies will pay taxes after the promoters and the executives have had their fill first. We are well aware that no one joins politics or public service merely for the legitimate salary that it offers. A family could make a decent living out of the wages that is on 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. And once in a way, some public servant who falls foul of the system, gets ‘raided’ and obscene amounts are found with him. It is another story that we never know the endings of those gentlemen with riches far beyond their circumstances. 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. The cognoscenti and the foreign investor (whom we have to please to extend our illusion of solvency) rail about subsidies to the farmers and the illusory subsidy on oil and gas. None of them realise the magnitude of ‘forbearance’ on revenue that is accorded to industry each year through tax holidays and several other tricks. Surely, the amount that a handful of businessmen get, far exceeds the few hundreds of rupees that the entire populace may apparently enjoy. 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 in power are there to propagate it in the name of socialism and alleviation of poverty etc. I cannot change the politician. What I am seeking is just a better redistribution of what largesse is misappropriated. Going by what wealth we see announced by so many politicians and the life styles of those who are public servants, they do not have to worry about the next few generations on the monetary front. However, 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

3 comments:

Meenakshi Pai said...

This is so apt that only one can wish
that our dear FM reads it and do follow as what is common taxpayers are aspiring for.Great simple approach we need.Very nice.

Meenakshi Pai said...

Simple and straight to the points been expressed,love to read such type of expressions.Great.Wish FM listens to Mr.Bala....then it is wish which seldom turns in reality.

Meenakshi Pai said...

Simple and straight to the points been expressed,love to read such type of expressions.Great.Wish FM listens to Mr.Bala....then it is wish which seldom turns in reality.