Saturday, 30 January 2016

STRUCTURAL REFORMS ?


Speaking at the Global Business Summit yesterday , Shri Arun Jaitley said :

"  We will introduce Structural Reforms in the forthcoming Union Budget "

What is the current structure of Union Budget ?

#  SOURCES of REVENUE

    *  Taxes ( Direct + Indirect )
    *  Borrowings ( Domestic + Foreign )
    *  Sale / Leasing of Assets ( PSUs + Natural National Resources )

#   DEPLOYMENT of REVENUE

    *  Administrative Expenses ( Salaries / Pensions / Maintenance / Subsidies , etc )
    *  Interest ( + Principal Amount ) on borrowings
    *  Developmental Expenses ( Creation of new Assets / Infrastructure )
    *  Lending

Broadly speaking , this is the current structure

Most of the time , all that the successive Finance Ministers have done is to slightly " Increase / Decrease " the " Sources and / or Deployment " of the funds , here and there

Once in a while , some Finance Minister , even introduced  altogether NEW source or a NEW way to spend the revenue !

But so far , no one has attempted to change the  FUNDAMENTAL STRUCTURE  !

I wonder whether Shri Jaitleyji's BUDGETARY  REFORMS would incorporate the following Structural Changes for which , I have sent to him ( and to most of his cabinet colleagues ), dozens of emails ? :


*  Total abolition of Personal Income Tax (  Revenue Loss of approx Rs 2.5 lakh*crores  )

*  Introduction of 2% Bank Transaction Tax - BTT  (  Revenue Gain of Rs 15 lakh*crores  )

*  Decreasing Corporate tax slab-rates based on No of permanent employees ( to encourage job creation )

*  Perpetual Amnesty Scheme ( no questions asked as to the source for CASH deposits in Jan Dhan Accounts , if
    funds from these Accounts are invested in Govt approved INFRASTRUCTURE SPVs  )

    So far , Rs 30,000 Crores have been deposited in Jan Dhan Accounts . With introduction of this REFORM ,
    that figure will rise a thousand times to Rs 30,000,000 Crores , within one year  !

    These investments will generate 10 million jobs each year and raise our GDP to 10 % in 2016-17 !

*  Transferring 10% of GST ( ie 1.8 % out of 18 % ) to PPF accounts of the buyers ( increase Domestic Savings )

*  Embedding of RFID chips in Currency Note ( read Kurzweilai.net ) to solve twin problems of BLACK MONEY and CORRUPTION


*  Introducing " Budgeting By Objectives " ( instead of Monetary Allocations, setting Physical Targets for Ministers )


*  Quarterly  Performance Review of " Targets vs Actual Achievements " to be published on Govt web sites

*  Thru an Online Opinion Poll , involving citizens in framing of the Ministry-wise Physical Targets before the budget



After second World War , German Economy was in shambles

68 years later , Germans are still thanking their then finance minister , Ludwig Erhard , for the miracle  ("Wirtschaftswunder," German for "economic miracle")
he brought through his " Out of the Box " reforms to revive the German Economy

I hope Shri Jaitley displays similar courage on 29 Feb 2016 - even if he is not bothered being remembered or not  !

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hemenparekh.in / blogs

31  Jan  2016

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Friday, 29 January 2016

GLOBAL CORRUPTION INDEX



Global Corruption watchdog , Transparency  International , just released its report for year 2015

Out of 168 countries surveyed , India ranked at position 76

That was an improvement from position 85 in year 2014

Jose Ugaz , Chair , Transparency International , made following remarks ,

"  Corruption can be beaten if we work together to stamp out the abuse of power bribery and shed light on secret deals .

Citizens must together tell their governments , they have had enough !

Leaders in India and Sri Lanka had fallen short of the bold promises they made to combat corruption "

QUESTION

Can India leapfrog 75 positions to rank # 1 in 2016  ?

ANSWER

Yes , it can - and with very little Judicial / Administrative / Legislative effort  !

HOW  ?

By implementing following suggestion which I have been making for past one year :

#   INTERNET  OF  THINGS ( IoT )

     As each currency note of Rs 500 / 1000 , is getting printed , embed it with microscopic RFID chips
    ( with this , current cost of a RFID chip will fall from 50 paise to 5 paise )


     Besides communicating with each other , these chips will also transmit their existence location , through internet 
    ( to cloud-based servers of Income Tax Department )


     This will form a " NETWORK  OF  CURRENCY  NOTES ( NoC ) "


     You may like to call this Internet of Currency ( IoC ) , a sub-set of IoT  !



#   IP ADDRESS  SYSTEM ( IP V 6.0 )

     Each Rs 500 / 1000 currency note must be assigned(at the time of printing ) , its own unique Internet Address , using IP V 6.0
     


     This IP address should be linked with the unique Serial Number printed on each note.

     Since IP V 6.0 , will be capable of assigning   " 2 * 10 to the power of 128 ", no of  IP addresses , there is no danger of running out of addresses , even if we decide to extend this idea to Rs 100 currency notes !
   
     
Here are the most important BYE - PRODUCT :

*   No more possibility of  FAKE / FORGED / COUNTERFEIT , currency notes ( currently estimated @Rs 2500 Cr )

*   No thief would ever want to steal such currency notes which continuously announce their location

      
*   No one would want to make any " Cash Deal " . All payments will become official only !

*   Plastic currency notes will last 10 times longer !

*   Who will buy GOLD biscuits , using RFID embedded notes ? No need for PAN card  !

*   No giving / No receiving of bribes ! No disproportionate assets  ! THE END  of  CORRUPTION  !
   
    
This reform will enable the Central Government / Income Tax Department , to :


*    Continuously trace the movement of each of these higher denomination currency notes


*    Instantly locate any place ( using Google Map based GPS ) , where there is an accumulation of more than Rs 1 Crore worth of currency notes

      
     Such accumulation will be made to appear as a TAG CLOUD on the web site of IT Dept,

     like thousands of balloons floating on a map of India , capable of being drilled down to within 1 Sq Meter

      Of course , visible only to IT officers ; not to general public !

     On each balloon , will appear a number announcing , " Amount of Cash here - Rs " !

     This will vastly simplify the task of Anti Corruption Dept / Enforcement Dept etc
Of course , RBI will need to allow 6 month's time to the owners of current paper currency notes of Rs 500 / 1000 , to get these exchanged with new plastic notes before withdrawal of the old notes from circulation

Implementation of this suggestion , does NOT require passing of any BILL in Lok Sabha or being held to ransom in Rajya Sabha !

And it can be implemented in India , within ONE YEAR

But if Chinese President Xi Jinping comes to know about the practicality of this suggestion , he might implement it in 6 months , to enable China to jump 82 positions and get rank # 1  !

How come ?

Simple !  Xi Jinping has the political will to take such bold decisions

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
hemen  parekh

30  Jan  2016

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Saturday, 23 January 2016

GOING CASHLESS ?



Government is encouraging use of Credit / Debit cards , in order to reduce cash payments , which , currently account for nearly 80 % of all payments

Measures ( Positive and Negative ), being considered / announced , include :

*  Elimination of transaction charges on purchases of Petrol , using Credit Cards

*  Income Tax benefits for individuals making payments thru Debit / Credit Cards

*  Disclosure of PAN for

   #   cash transactions above Rs 2 Lakhs

   #   settling hotel bills that exceed Rs 50,000

   #   booking air tickets  / tour packages , exceeding Rs 50,000

   #   opening a bank account ( except for Jan Dhan Yojana a/c )

*  Incentives to shop keepers and traders to accept electronic payments


While announcing these measures , revenue secretary , Shri Hasmukh Adhia said :

"   ...to collect information on certain types of transactions from third parties in a non-intrusive manner , the income-tax rules require quoting of PAN where the transactions exceed a specified limit "


Are we missing the woods for the tree ?


What can be more " non-intrusive " than embedding Rs 500 / 1,000 currency notes with RFID micro-chips , thinner than a hair ? Each sensor, continuously broadcasting its location to the Income Tax Authorities , even as it moves from one hand to another ?

And " shouting from the rooftop " each physical location, where there is an accumulation of Rs ONE CRORE worth of such notes !

And assigning a  UNIQUE  Internet Protocol ( IP V 6.0 ) Address to each and every such high denomination currency notes ? - which could , even be its Currency Note Number  ?

Why bother to " incentivize " citizens to use electronic payments  ?

Why bother to introduce rules / regulations and make life difficult for everyone - including for those officers responsible for enforcement ?

Just implement this and watch 90 % payments being made thru electronic means / devices , within 6 months !

I had sent my above mentioned suggestion to Shri Arun Jaitleyji , when Govt had put out a paper ,

" Draft Proposals For Facilitating Electronic Transactions " ,

and sought public comments

Implementing this does not require passing any bill in Rajya Sabha !

If you have a better idea to dramatically reduce the menace of BLACK MONEY and CORRUPTION , in a single stroke , I request you to rush it to Shri Jaitley-ji , before 29 Feb 2016 ( Budget date ) at...

'ajaitley@del5.vsnl.net.in'  /  'ajaitley@sansad.nic.in'

Or , just forward this to him



A recent news report spoke of printing of 30 Crore notes of Rs 1,000 denomination , WITHOUT that identifying silver thread

Some of these defective notes even went into circulation !  Rest had to be destroyed

This would never happen if a RFID micro-chip ( much thinner than that Silver thread ) were to be embedded in each note

A Inspection device , costing no more than a few thousands of rupees and  sitting on the Printing Line would immediately detect any note WITHOUT the RFID

A bell will ring and a robotic arm would pick up and set aside such a defective note

And if this was to happen to 10 notes in a row , the printing press will automatically shut down  !

This technology is already working in hundreds of factories around the World

And embedding a RFID chip is much simpler than inserting that Silver thread  !






-----------------------------------------------------------------------------------------

hemen  parekh

24  Jan  2016

www.hemenparekh.in

------------------------------------------------------------------------------------------

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Friday, 22 January 2016

HAVE A DEGREE : WILL SWEEP



Some 19,000 graduates / post graduates who have applied for the job of sweepers in Amroha Nagar Palika , seem to be saying just that  !

But only 114 of these BA / B Sc / MA / MBA / M Tech  grads will get those jobs !

Rest will join the rank of 3.5 million graduates who join our work force each year - to remain jobless

Now , I am not saying that the job of sweeping streets is " below the dignity " of anyone

Why , even our Netas do it , if there is a TV camera around  !

But take a look at the following news ( DNA / 11 Sept 2015 ) :


Against 368 vacancies of " Peons " advertized by UP Govt , applications received were as follows :


*  Total Number of applicants.............. 20 lakh

    {  5,435 applicants for each post  ! }

*  No of PhDs....................................  201

*  No of Master Degree holders............ 20,056

*  No of Bachelor Degree holders.......... 1,23,000

*  No of 12th Standard pass................. 6,00,000

*  No of 10th Standard pass................. 8,20,000

   { Minimum prescribed Edu Qualification = 10th Standard }


This scenario repeats , month after month , year after year  !


The only hope for these millions of Graduates / Post Graduates,  is to apply for admission to some 15,000 Industrial Training Institutes ( ITIs ) for getting " trained " as Electricians / Plumbers  / Carpenters / Masons etc ,in order to acquire " skills " which will enable them to get " Self Employed "

But the problem is :

*   None of these " re-skilled " jobless will qualify as a " START UP ", under Start Up Action
     Plan announced on 16 Jan 2016

      
*   To start  " Self Employment " , no bank will give them a loan  of Rs 1 Million, with ZERO
     interest for first 10 years , and without requiring any securities


For turning 10 million jobless into 10 million " Self Employed "(@ loan of Rs 10 lakh each ) , would require  EACH  YEAR ,  disbursement of :


Rs  10 LAKH*CRORES  !


Government just does not have that kind of money

But  BLACK MONEY  hoarders have  !

All we need to do is to " INCENTIVIZE " them to help start a " NEW ECONOMIC ORDER " , where Self Employment is not merely encouraged but it is CELEBRATED  !

It does not require passing of any bill in Rajya Sabha to declare :

*  No questions asked , as to the source , for any CASH deposited in Jan Dhan Bank A/C ,
   provided that account holder , first registers on Income Tax Department web site as a "
   Self Employed " person

*  All payments made out from such " Self Employed " accounts , must be by Cheques /
   Credit - Debit Cards / RuPay Cards / Mobile Wallets / Electronic Transfers etc

*  Levy of a 2% Bank Transaction Tax ( BTT ) on all such payments

*  Total abolition of Personal Income Tax for these " Self Employed "

*  Self Employed barred from any loans from banking system

*  Self Employed not eligible for any incentive / subsidy from Center / States


If it does not sound politically correct to call this initiative an " AMNESTY  SCHEME ",

then call it , " SELF  CAPITAL  SCHEME " / " ECONOMY KICK-START SCHEME "


When ,

*  The entire World is set to lose 11 million jobs in next 5 years

*  World Economy is in a downward spiral

*  International Trade is shrinking

*  Jobless / Economic migrants are marching onto Europe / Australia

*  Resentment / Intolerance are mere manifestation of jobless poverty ,


This is the  ONLY WAY , India can make 21st Century , an Indian Century  !

I hope Shri Narendra Modiji - and his colleagues in Cabinet - has the political will  to introduce this in the forthcoming budget on 29 Feb 2016 !

-----------------------------------------------------------------------------------------

hemen  parekh

23  Jan  2016

www.hemenparekh.in / blogs

----------------------------------------------------------------------------------------

Make    Yourself    Heard

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Thursday, 21 January 2016

TRACK THE BLACK



After staying in a US prison for 18 months, Rajat Gupta , former MD of McKinsey , is at home

Confined to his apartment and required to wear an ankle bracelet that monitors his movements

Some years back , a few Indian students studying in US , were also forced to wear such bracelets - ostensibly for tracking their movements

Last week , there was a news report that all foreigners entering India , will be given special SIM cards that they must install in their smart phones - enabling Indian Authorities to track their movements and to quickly locate a foreigner who overstays his stay

GPS satellites of USA / Russia / China enable their militaries to locate objects on earth , just ONE CENTIMETER apart  !

Medical technology will soon enable doctors to insert into brain , dissolvable sensors , which broadcast the firing of the neurons

But , it seems , Economists / Bankers / Politicians are slow to accept my suggestion to embed all Rs 500 / 1000 currency notes with RFID micro-chips which constantly broadcast those locations to Income Tax Authorities , wherever there is an accumulation of such currency notes , exceeding an aggregate of Rs ONE CRORE ( or whatever )

This is the ONLY / PRACTICAL / SIMPLE  answer to kill two birds with one stone

The bird of BLACK MONEY

And the bird of CORRUPTION


Read my full suggestion at :

www.hemenparekh.in / Blogs 

*   How to Conquer Corruption 

*   A Network of Currency Notes


And let no one doubt the capability of  Indian Technologists to implement this in 6 months , if Shri Narendra Modi-ji was to mandate it

And this does NOT require begging the opposition to help pass any bill in Rajya Sabha !

Will any political party dare to oppose it , even outside the Parliament  ?



-----------------------------------------------------------------------------------------

hemen  parekh

22  Jan  2016

-------------------------------------------------------------------------------------

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