................But it is probably futile to think it will be abolished. That wouldn't work politically in a democracy full of poor voters. So the second-best solution is to minimise the evil and keep the rates down to an absolute minimum - like 20 per cent for those who earn more than Rs 1 crore a year, 15 per cent for those who earn between Rs 10 lakh and .............
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1 comment:
The article is interesting and also conveying a lot to the new Government. The budget is a tool to set right all bad that has happened in the economy because of bad governance, keep the confidence of the people growing and make good economics and equally good politics.It is a god given golden opportunity to the new government to think afresh and be away from beaten track. The author is 100% right when novicestake control and they have no biases as such. They can do wonders and wonders are essential to revive the economy and the confidence in the economy. This wonder can start with taxation policies which are archaic and have not done anything but damage to the economy.Reduce the tax rates and take away all exemptions.People will save as savings are in their own Interest. The Government need household savings for capital formation and for this the Government has to facilitate savings.This is possible by controlling inflation, running the banks efficiently and profitably, discouraging investment in gold and real esates, reducing corruption in the society and avoiding generation of black money. All these are possible if the Government is strong, administration is efficient, accountability is fixed, transparency is maintained,information is gathered adequately and put into optimum use to draw appropriate policies etc. The present vicious circle of lower savings, lower investment, lower production,high inflation, needs to be broken.
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