4 things I would do if I were the Finance Minister: Dr. Swamy

[vgane]

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Dr Swamy is a powerful person within or without NDA...Will Modi take the maverick in his cabinet?

4 things I would do if I were the Finance Minister: Dr. Swamy

By Sree Iyer -
January 29, 2016

Jaipur

In a wide ranging interview with ETV Rajasthan, in the program Aamne-Saamne with host Dr. Anita Hada Sangwan, Dr. Subramanian Swamy was his erudite self as he listed four things that he would do, if he were to be the Finance Minister:

1. Abolish Personal Income Tax – To boost India’s economy, the government should do something that immediately has a positive effect on people’s mindset and that would be the step of abolishing Personal Income Tax. The fiscal fallout of this can be managed in many ways, including auction of Coal mining, Telecommunications Spectrum etc.
2. Simplify Excise Duties – There are about 2788 commodities on which Excise duties are levied today. Of these, the government gets 90% of the revenue from the top 21. Therefore simplify the Excise duties, remove the 2767 items and in the remaining 21, make it standard for each commodity (i. e. do not have sub-classification e. g. Fiber/ Cotton/ Rayon etc.)
3. Enable Agriculture in India – India is one of the cheapest producers of Agriculture based products. The Government should encourage this sector by making it easy for farmers to store/ ship/ process goods they make. India is one of the few countries in the world that allows agricultural production year round and the government should take steps to ensure that this is enabled to the fullest extent. It may need India to engage with the rest of the World in WTO by rationalizing tariffs etc.
4. Foreign Direct Investment (FDI) – Allow FDI only in those projects that come with technical know how. Retailers such as Walmart, if allowed, will obliterate the small Mom and Pop stores in the country because of the lower interest rate that they enjoy in the United States.

He added that Prime Minister Narendra Modi has a definite plan in his mind in terms of how he wants to approach India-Pakistan relations and that the country should give him room to execute it rather than scrutinizing and second guessing his every move. Answering to a question as to whether he was disappointed about not being a part of the Cabinet, he replied that he neither asked for it nor wanted it and therefore there is no question of being disappointed.
Dr. Swamy said that for the year 2016, his Trishul of initiatives will be Ram Mandir, National Herald Case and Sunanda Pushkar
On the issue of Rahul Gandhi’s British citizenship issue, he stated that Rahul Gandhi himself has stated his British Citizenship in his filings (he was the Company Secretary) and therefore knew fully well what he was doing.

https://performancegurus.net/4-things-i-would-do-if-i-were-the-finance-minister-dr-swamy/

 

[yesmohan]

All the points enumerated by Swamy, are valid in principle level.

 

[Brahmanyan]

Dr Subramanian Swamy's suggestions are worth consideration by the finance ministry. Income tax department will be released from huge amount of work, if the personal income tax is simplified or abolished. Advance tax on Fixed Deposits with Banks should be aboilished. The Bankers compline about the huge paperwork they have to do in collecting and submitting Form 15 G and 15 H. FDI sdhould allowed for industries only, not for marketing consumer products.

 

[prasad1]

The BJP's top brass has been making radical noises about the abolition of income, excise and sales taxes in its vision document, but it is highly unlikely.
What are the implications if indian government abolishes All kinds of Income Tax from the people?

BJP Vision 2025 talks about a revolutionary idea to abolish Income Tax. Mr. Narendra Modi again reiterated the need for substantial reform of the tax system which is burden on common man in a function organized by Baba Ramdev in Delhi on 5th January 2014.

What are the implications of this step with respect to the following:

1. Revenue collection for the government
2. Tax paid by the common man
3. Any significant change in people's buying pattern/behaviour since a singular transaction tax of 1.5-2% is contemplated?

Only about 1% of Indians pay that top rate of 30%, and educated Indians who immigrate to Europe or North America will face total tax burdens that are higher than that.

Taxation in India is less than 10% of GDP. It seems on the surface that it would be a great place for business; the right wing in America would salivate at the thought of having tax revenue as low as 10% of GDP. However, this tax burden is allocated in a way that is seriously detrimental to growth. The World Bank found that in 2013 the percent of corporate profits paid as tax in India was 62.8%! (Source) Other countries with comparably high rates are France (governed largely by self-identified socialists) and China (governed by self-identified communists).
It's a virtuous, pro-growth cycle, one much better for India as a whole than simply allowing the wealthiest Indians to keep more of their earnings.

It is the usual "HOGwash" to eliminate Income tax.
In a country or state they have two aspects EXPENSES & REVENUE.
If you cut one then the other too has to be cut.
So the capitalist societies with supply side economics would like to cut or abolish services. These services are social programs generally for the poor.
There is purpose of government tax in addition to paying for services, that of wealth redistribution.
If the rich do not want to contribute and poor can not afford to, who will pay for the the cost of government?
The rich have become ultrarich all over the world. The rich of the world take on much more charity in other places except in India.

* A "tax" is defined by the Collins English Dictionary as a "compulsory financial contribution imposed by a government to raise revenue…."
So if you abolish it how do you raise the revenue and be just.

So instead of calling it TAX let us call it mandatory donation by the rich. If the top 1% which probably include Dr. Swamy of income earners contribute 24% of their income we can abolish income tax, or propose another method of generating that revenue.

 

[prasad1]

Current debates about policy reform in least developed countries (LDCs) often focus on improving the delivery of social services, the design of market-friendly economic institutions, the effectiveness of poverty-reduction programs, or the role of trade and market liberalization. Perhaps surprisingly, they rarely deal explicitly with
tax reform and the need to develop modern income tax systems in those countries.

This is unfortunate for at least three reasons. First, poor countries often rely excessively on highly distortionary tax instruments such as taxes on trade or indirect taxes on specific consumption goods. Next, income taxation can help to increase the tax revenues needed to finance public goods. In countries such as China and India, tax revenues are currently around 10–15 percent of GDP, far below any country in the West that has been able to develop a proper education, health, and infrastructure system. Finally, many LDCs have witnessed a sharp rise in income inequality during the recent period.
Progressive taxation is one of the least distortionary policy tools available that controls the rise in inequality by redistributing the gains from growth.