Comments on: ‘Aam Admi’ rule in India results in Asia’s largest billionaires http://www.bloggernews.net/15103 High-quality English language analysis and editorial writing on the news. Mon, 01 Dec 2008 21:45:37 +0000 http://wordpress.org/?v=2.3.3 By: K.R.BASKARAN http://www.bloggernews.net/15103#comment-29006 K.R.BASKARAN Wed, 23 May 2007 10:40:27 +0000 http://www.bloggernews.net/15103#comment-29006 The western educated politicians ,brainwashed by western concept of development are pusing India in to dangerous phase of development with rich becomming richer and poor becomming poorer.To begin with the introduction of productive asset concept has enabled the rich to keep their riches from being seen by tax men as they no longer have to pay wealth tax.Thus exemption from wealth tax for items like shares,commercial buildings,bank fixed deposits etc are only to help the rich.Further the government replacing dividend tax with dividend distribution tax is another way,the rich are benifited while the poor investors getting small amounts as dividend has to pay tax,as DDT.The right way will be to allow minimum dividend of say 5% from PBT and tax the dividend paid from PAT.To day Mr.Ajit Premji gests say 500 crores as tax free dividend. His original investment is very small and he is getting phenominal returns on invest, The government has sacrifised huge taxes by exempting long term capital gains on listed shares (held for over a year) and reducing the short term CGT to mere 10 %( even here,the poor small investor pays 30%. The exemptions given to corporates from IT results in substantial saving to large companies as average tax is only 19 % where us the poor tiny,micro,ssi units and others end up paying normal tax as they have no way of availing the tax exemptions. The levy of service tax is the most cruel low on aam admi as the burden is directly bourne by him. The concept of Cenvat,and VAT results in heavy burden on smaller companies as they either donot get modvatable bill or unable to avail the cenvat credit due to procedural difficulties.Even when cenvat is availed by ssi units,they pay the duty and wait for 3 to 6 months to get it reimbursed,while large industries buying goos from ssi units avail credit immidiately on receipt of goods,and delay the payment to ssi units,thus benifiting from ssi financing them. The levy od Excise duty and sales tax for supplies to government and government undertakings,adds to the finance cost without any significant benifit to the governemnt.Some time it leads to bleeding of the government.This procedure could be stopped by devising suitable mechanism to avoid government reimbursing excise duty as it is only shifting of money from one pocket to another,and some crooks benifit from it. The policy of encouraging use of persanal transport rather than encouraging mass transport system,the unchecked growth paper money in circulation,the presumptive taxation policy for builders,transporters has helped creation of huge black money.There is a need for demonitisation of 500 & 1000 Rs notes as huge amount paper currency in circulation helps the rick to create black money every moment-especially in realestate,building construction and transport areas. The government must ensure that cash withdrawel by individuals/companies is restricted and the use of chequ is encouraged.To day even big companies are drawing large sums to pay salaries.This should be banned. Urban roads should be available for use by pedestrians rather than for motor vehicles and life as a whole should be made pleasurable for poor with planned growth. The western educated politicians ,brainwashed by western concept of development are pusing India in to dangerous phase of development with rich becomming richer and poor becomming poorer.To begin with the introduction of productive asset concept has enabled the rich to keep their riches from being seen by tax men as they no longer have to pay wealth tax.Thus exemption from wealth tax for items like shares,commercial buildings,bank fixed deposits etc are only to help the rich.Further the government replacing dividend tax with dividend distribution tax is another way,the rich are benifited while the poor investors getting small amounts as dividend has to pay tax,as DDT.The right way will be to allow minimum dividend of say 5% from PBT and tax the dividend paid from PAT.To day Mr.Ajit Premji gests say 500 crores as tax free dividend. His original investment is very small and he is getting phenominal returns on invest,
The government has sacrifised huge taxes by exempting long term capital gains on listed shares (held for over a year) and reducing the short term CGT to mere 10 %( even here,the poor small investor pays 30%.

The exemptions given to corporates from IT results in substantial saving to large companies as average tax is only 19 % where us the poor tiny,micro,ssi units and others end up paying normal tax as they have no way of availing the tax exemptions.

The levy of service tax is the most cruel low on aam admi as the burden is directly bourne by him.

The concept of Cenvat,and VAT results in heavy burden on smaller companies as they either donot get modvatable bill or unable to avail the cenvat credit due to procedural difficulties.Even when cenvat is availed by ssi units,they pay the duty and wait for 3 to 6 months to get it reimbursed,while large industries buying goos from ssi units avail credit immidiately on receipt of goods,and delay the payment to ssi units,thus benifiting from ssi financing them.

The levy od Excise duty and sales tax for supplies to government and government undertakings,adds to the finance cost without any significant benifit to the governemnt.Some time it leads to bleeding of the government.This procedure could be stopped by devising suitable mechanism to avoid government reimbursing excise duty as it is only shifting of money from one pocket to another,and some crooks benifit from it.

The policy of encouraging use of persanal transport rather than encouraging mass transport system,the unchecked growth paper money in circulation,the presumptive taxation policy for builders,transporters has helped creation of huge black money.There is a need for demonitisation of 500 & 1000 Rs notes as huge amount paper currency in circulation helps the rick to create black money every moment-especially in realestate,building construction and transport areas.

The government must ensure that cash withdrawel by individuals/companies is restricted and the use of chequ is encouraged.To day even big companies are drawing large sums to pay salaries.This should be banned.

Urban roads should be available for use by pedestrians rather than for motor vehicles and life as a whole should be made pleasurable for poor with planned growth.

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