There are lots to be done in the coming budget! This would be one more glorious opportunity for the Congress Government to do something positive for the people, after the massive scams. Let me list some of these.
1. Taxes are a huge burden in various forms to the people. This includes direct and indirect taxes. To give a positive twist to the inflation story, the government should start off with a drastic reduction in the duties on Petrol and diesel. This would bring down the transport cost straight away. Of the 25% duty on petrol and diesel, the government could make it 10 to 15%. This would bring down the fuel cost by 10% direct. This would be a positive step in cutting down the inflation. This includes both the flat rate component as well as the percentage charged on petrol and diesel.
2. Income tax should be streamlined. As a first step, income tax should have only one cut off level. Anyone drawing a gross of over Rs.10.0 laks should pay tax. All others no tax. And those earning over 10.0 laks should pay a flat 10% of their income over 10.0 laks. No confusions on exceptions, limits, this and that. A straight jacketed rule is what is required in the case of income tax. This would find many tax evaders voluntarily paying taxes and help those drawing less than 10 laks from running from pillar to post at the last minute to save on taxes. For people drawing over 10 laks, the tax amounts to nothing. 10% will be comfortable for anyone to pay.
3. The growth in industry is too hampered by the government poking its nose in areas that is not relevant for it. In the name of control, the government increases red tape, corruption and inspector raj. Laws that are bent upon such activities need to be checked. Example, Service Tax and Excise have become a pain in the ass for most of the businesses. It is high time, the government takes a strong and valid step to rope in these people from filing frivolous cases which do not have a standing in any court.
4. Government should allocate funds to compensate those citizens on whom false cases are being foisted by the government and its servants. When the court dismisses a case filed by the government it should be accompanied by a direction to compensate the litigant who has been drawn into the case by the government employees. They should also have provision to recover the same from such employees who indulge in false cases primarily to extort money from innocent citizens of the country. This should include litigation such as tax claims and notices filed by the government, criminal and civil cases filed by the government. More than 80% of the tax cases filed by the government are thrown out of the tribunals and higher courts as invalid. But no compensation is provided to the citizen. He should be compensated and the same should be recovered from the government employee who wrong fully filed the case.
This step would ensure that wrong cases are not filed. If governments false cases does not reach the court, 80% of the cases in the court are out, right away. The courts will do more productive work.
5. A vigilance report should be presented every year to judge the extent of corruption in the country. An index should be evolved and the industry associations will decide on the index. Vigilance department should have a clear target for every year to perform. If that performance is not held, it is better if the vigilance act is amended to shift the responsibility of vigilance department to private citizens, typically, to industry and tax payer associations in the country. Budget allocation for center and state vigilance departments should be done separately and should be out of the control of the state / central administrative officers.
6. An open ended voluntary disclosure scheme could be announced for foreign earning declaration before switching on the heat on tax escaped overseas moneys. This would bring many of the companies and individuals to bring in their tax evaded moneys into the country.
5. A vigilance report should be presented every year to judge the extent of corruption in the country. An index should be evolved and the industry associations will decide on the index. Vigilance department should have a clear target for every year to perform. If that performance is not held, it is better if the vigilance act is amended to shift the responsibility of vigilance department to private citizens, typically, to industry and tax payer associations in the country. Budget allocation for center and state vigilance departments should be done separately and should be out of the control of the state / central administrative officers.
6. An open ended voluntary disclosure scheme could be announced for foreign earning declaration before switching on the heat on tax escaped overseas moneys. This would bring many of the companies and individuals to bring in their tax evaded moneys into the country.
