26-May-2005
Dear Prime Minister,
I would like to share some of my views that would boost Indian economy
1. Government has announced 9.5% interest in PF. I have few concerns. Why should govt. pay such high tax-free interest to those whose monthly income is more than 1 lacs? Interest rate should be based on gross monthly salary. Higher the salary lower should be the interest down to the interest offered by bank. Interest rate should also be based on age. For example anybody above 45 should get highest interest. So when we apply both salary and age final rate should be lower of the two rates.
2. Govt should charge 25 paise for every banking and share transaction regardless of the amount of the transaction.
3. Thirty (30) percent of annual salary increment after tax should be given in gift voucher (GV) in order to increase private final consumption expenditure. Gift vouchers should be limited to consumer goods and services. For example if someone gets Rs 50,000 per month and gets a monthly increment of Rs 1000, he/she should get 30% of Rs 670 (Rs 330 paid in tax) as GV i.e. Rs 201. This should be applicable for both government and private companies.
Extend the above idea to income tax return. All rebates applied on calculated tax should be converted into gift vouchers. This will force people to improve the quality of their life.
4. Every earning individual including pension holders should spend 7% of the gross income after tax in health, 5% in education, 5% in food, 2% in cloth, 3% in transportation. A person earning Rs 1000 a month should spend Rs 220(70 + 50 + 50 + 20 + 30) every month in education, health, food, cloth, and transportation. Similarly Ambani brothers who earn 3 crore every month should spend Rs 66 lacs every month. In return government along with private organizations must ensure free education and medical expense to every Indian. Government will provide food voucher worth of Rs 2000 every month, 4 sets of clothes and pair of shoes of agreed quality and free local transportation in trains and buses. Objective is to distribute the income more evenly. It is not acceptable to me that 66,000 Indian holding US$235 billion, more than 25% of our GDP! So, more you earn more you pay for basic amenities of life.
5. Introduce National Id card with biometric identification (photo and finger prints) for all Indians. This card should also act as debit card in collaboration with SBI and other banks. Also every registered company/traders should be given a unique company id card. All transactions of value Rs 1000 or more should be either through cheque or national/company id card. Every transaction should identify source and destination ids. This way ministry of finance will be able to find income and expense of all individuals and corporate. It will help to eliminate black money in a big way. Technically it is possible as all our cities and towns are connected through Internet. National id card has many other benefits like keeping track of demographic details of the entire population, checking illegal immigration, it can be linked with voting machine to stop false voting, help to keep track of medical history of each and every individuals. VAT can be implemented more effectively. I think cost of the project should not be more than Rs15,000 crore. Benefits of having national id are far too great to be ignored.
6. Declare the year 2006 as consumer year and withdraw sales tax or VAT from consumer products.
Dear Prime Minister,
I would like to share some of my views that would boost Indian economy
1. Government has announced 9.5% interest in PF. I have few concerns. Why should govt. pay such high tax-free interest to those whose monthly income is more than 1 lacs? Interest rate should be based on gross monthly salary. Higher the salary lower should be the interest down to the interest offered by bank. Interest rate should also be based on age. For example anybody above 45 should get highest interest. So when we apply both salary and age final rate should be lower of the two rates.
2. Govt should charge 25 paise for every banking and share transaction regardless of the amount of the transaction.
3. Thirty (30) percent of annual salary increment after tax should be given in gift voucher (GV) in order to increase private final consumption expenditure. Gift vouchers should be limited to consumer goods and services. For example if someone gets Rs 50,000 per month and gets a monthly increment of Rs 1000, he/she should get 30% of Rs 670 (Rs 330 paid in tax) as GV i.e. Rs 201. This should be applicable for both government and private companies.
Extend the above idea to income tax return. All rebates applied on calculated tax should be converted into gift vouchers. This will force people to improve the quality of their life.
4. Every earning individual including pension holders should spend 7% of the gross income after tax in health, 5% in education, 5% in food, 2% in cloth, 3% in transportation. A person earning Rs 1000 a month should spend Rs 220(70 + 50 + 50 + 20 + 30) every month in education, health, food, cloth, and transportation. Similarly Ambani brothers who earn 3 crore every month should spend Rs 66 lacs every month. In return government along with private organizations must ensure free education and medical expense to every Indian. Government will provide food voucher worth of Rs 2000 every month, 4 sets of clothes and pair of shoes of agreed quality and free local transportation in trains and buses. Objective is to distribute the income more evenly. It is not acceptable to me that 66,000 Indian holding US$235 billion, more than 25% of our GDP! So, more you earn more you pay for basic amenities of life.
5. Introduce National Id card with biometric identification (photo and finger prints) for all Indians. This card should also act as debit card in collaboration with SBI and other banks. Also every registered company/traders should be given a unique company id card. All transactions of value Rs 1000 or more should be either through cheque or national/company id card. Every transaction should identify source and destination ids. This way ministry of finance will be able to find income and expense of all individuals and corporate. It will help to eliminate black money in a big way. Technically it is possible as all our cities and towns are connected through Internet. National id card has many other benefits like keeping track of demographic details of the entire population, checking illegal immigration, it can be linked with voting machine to stop false voting, help to keep track of medical history of each and every individuals. VAT can be implemented more effectively. I think cost of the project should not be more than Rs15,000 crore. Benefits of having national id are far too great to be ignored.
6. Declare the year 2006 as consumer year and withdraw sales tax or VAT from consumer products.
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