Economic Growth, my way
November 9, 2009 1 Comment
Prime Minister Manmohan Singh has hinted that the stimulus package may be rolled back as the economy shows signs of revival.
While i leave the decision to be discussed by people far more capable than I am, I wonder aloud why India has never been able to solve this puzzle of growth.
Despite so many initiatives, why India is not able to get that elusive consistent growth. After racking my modest quota of grey cells , I think I found what’s been lacking in India’s policy making.
a) First the concept of GDP has to be changed from Gross Domestic Product to Gross ‘Deposit’ Product. This in my view would bring in purview the deposits of all those ‘honourable’ people representatives of India made into Swiss Banks, Maldives, Mauritius, Cayman Islands and other such tax havens.
b) The Govt has seriously erred in rolling out the SEZ program the way it has. I mean it’s foolhardy to believe that we need more ‘economic’ activity for growth. It is high time we challenge such moribund views. The SEZs should be forthwith renamed as ‘Scam Efficiency Zone’ wherein the best scam-generators from India would be provided all the necessary facilities to roll out future scams.
c) The PM has the ‘wrong’ set of economic advisors. In his team i would immediately recommend the inclusion of TN CM Mr Mu Ka, UP CM Ms Maywati with Mr Madhu Khoda being the convenor. I am certain that these luminaries would ensure that the economic engine of India is fully rev’ed and racing ahead.
d) Despite a fully developed tax system including a well laid-out Income tax Act, the tax revenues are certainly not growing at the pace we want to, neither is compliance improving. I would recommend the immediate abolition of all taxes, direct and indirect, to be replaced by 2 taxes as under
1. SBT – Scam Benefit Tax. All those who have been benefitted by the Scam will be taxed at a marginal rate of 30%. Please note : It is not taxable in the hands of the person perpetuating the scam but only those who have been benefited by the Scam.
2. GSB – Sounding similar to GST, this is actually a General Surcharge on Bribe. Again this is payable by the person who induces an otherwise honest Government official by paying a bribe. Since the person paying the bribe stands to gain in some form or other, this additional burden of tax should not dissuade him from paying more bribes.
Will Dr Manmohan Singh heed to my sane advice ? I wish he would.