Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Friday 1 December 2017

But , Where is the Money ?



Yesterday ( 01 Dec ) , following news reports appeared :


Business Line

“ By 2030, India may offer green investment potential of $ 3 trillion, says IFC report “

Highlights of the funds required :

·         Housing Sector……………………………….. $  1400  Billion

·         Electric Vehicle………………………………   $    667  Billion ( between 2018-2030 )

·         Renewable Energy…………………………   $    448  Billion

·         Transport Infrastructure…………………..$    250  Billion

·         Agriculture……………………………………….$    198  Billion

·         Urban Water Supply………………………   $    128  Billion
------------------------------------------------------------------------------------------------------------------------------
·         TOTAL………………………………………………$   3091  ( in 12 years = $ 250 Billion per year )


DNA

“ India needs Rs 50 lakh*crore investment in next five years “

While delivering 5th Annual Defence Estates Day lecture , FM Shri Arun Jaitleyji said :


“ Inadequate infrastructure is a major hindrance in growth and the funding requirement for infrastructure in the country is huge


There is a requirement of a whooping Rs 50 Lakh*Crore investment in the sector over the next five years “ ( approx. $  750  Billion in 5 years = $ 150  Billion per year  )


I believe , if anything , these figures are gross under-estimates , even if we have a modest ambition to become a “ Middle Income Economy “ by 2030 !

But the question is not so much about the accuracy of these estimates

The question is :

From where are we going to find these monies ?

No amount of increasing the coverage of our tax-base , will suffice

And government is committed to lowering the tax rates ( for both , individuals and corporate )

Then there is a limit beyond which we must not increase Foreign Investment ( Direct or Indirect )

And whatever Foreign Investment does flow in, has compulsion of earning a 10 % return ! ( - there is no way we could get foreign loans @ 0.1 % interest , for more than 1 % of our funds requirement ! )

There is only ONE WAY to raise all these funds

And that is :

BLACK MONEY AMNESTY scheme like the one which Indonesia introduced (July 2016-Mar 2017 ) and raised $ 342  BILLION { One third of its GDP } , from 745,000 tax payers , by levying  2 % - 4 % tax ( as against 50 % in our case ) /  NO PENALTY /  NO QUESTIONS  asked  / NO SCRUTINY  !
The Scheme yielded $ 2.3 Billion by way of tax

Now consider the following :


·         India’s BLACK MONEY is estimated to be $ 460  Billion ( apx. 20 % of our GDP )
     Our own recent Amnesty Scheme yielded approx. $ 10  Billion ( 2 % of GDP )
     Indonesia managed $ 342 Billion which amounted to nearly ONE THIRD of its GDP
     If we too could bring out Black Money @ 33 % of our GDP , that would amount to
    nearly $ 800 Billion !

    
·         Indonesia’s BLACK MONEY is estimated to be $ 851  Billion ( parked overseas ) – which means , Indonesia managed to garner nearly 40 % of hidden Black Money !


·         The Indonesian government has estimated 5,500tn rupiah ( = $ 407 Trillion ) will be needed through 2019 for infrastructure; the state budget can probably cover a quarter of that.



·         At the end of the third quarter of 2017, Bank Indonesia (BI), the country’s central bank, announced an interest rate cut down to 4.50 per cent from previous 4.75 per cent.



References :











Did I hear someone say :  “  It is time to look  east-wards “  ?



02  Dec  2017

www.hemenparekh.in / blogs 


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