Thursday, June 27, 2013

Back to the future?

We are nearing the 1990 era's in true sense. Today, our foreign reserves are just enough for 6 months and RBI has no other option than selling $ to stem the downfall or rupee. 
The time has come for another set of reforms. We are not exporting in good numbers , because our enterprises are taxed heavily right from import of raw material till export of final goods. I can see the pain of every enterprise which is subjected to multitude of pains! The MNC's coming into the Indian market wont add substantial $$$ to the exports tally, they are just encashing on domestic demand. We need more and more of Indian enterprises catering to the world segment. 

Software services could flourish for last 15+ years because of tax holiday and softer policy regime. The same is needed in manufacturing sector and removing the draconian labor laws, unwanted inspector check's, lengthy process for commercial licenses, high amount of taxes (sales, central, excise, custom, cess etc) and top of it , shrinking "employable" workforce due to mushrooming of educational institutions.

To get over this situation, we need to start working right from the roots and dont think of superficial measure of selling dollars or importing less.

1. Let the states compete with each other in building infrastructure, attracting investment and stemming up the growth and Center should stop interfering in all the programs.
2. There should be one tax slab for the entire country and states should have major share in it. The states should only pay the center for its expenses related to defense, parliamentary affairs etc. Infact, states should drive the center ; instead of pooling resources and expecting them to drive us!
3. Trade and industry norms, procedure, compliance must be simplified and paying taxes shouldn't be a burden. Reduce it to below 10% and see that people dont mind paying a bill or legitimate transactions.
4. Stop subsidies, empower people with jobs. We cant keep feeding fish to people forever, lets teach them fishing!
5. Focus on building agro industry, food processing technology and utilize the rich flora fauna to the advantage.
6. Take out the monopoly and tight central govt. control on railways, airways and shipping sectors. Let the private players operate in every sphere of transportation domain. If we want to be a Logistics hub, show it by having a open market !

Last but not the least, stop sharing info about NaMo/RG; dont expect a turnaround would happen by beating the chest for internet savvy politicans or political brigade. Start thinking ! Both of them (Congress/BJP) are not the answer or solution.

The solution starts from me and you!

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