“hain taiyaar hum” for all reforms: Budget 2019

By GovernanceToday
In Cover Story
June 23, 2019
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Nirmala Sitharaman Masters in Economics from JNU the first women full time Finance Minister is ready her first Budget 2019 soon.

The strong mandate have shown the calibre of Indian people say “hain taiyaar hum” (we are ready) for any reform to see India on top, and same calibre the people of India expect from their minister as well  

On the economic front, the public has supported the continuation of policies of the first tenure of the Modi government. It will have to focus on continuing the economic initiative taken during Modi’s first tenure in the budget. It is very important to deliver the benefits of government schemes to ten million poor people of the country. This will help in tackling the problem of economic non-equality.

It will also focus on Wealth Creation. This work can be done only by promoting investments from the private sector. In the budget, there will be a solution. In the first tenure of the Modi government, several steps were taken for doing business of Easy Doing Business, which were needed to carry forward. India will have to make a place in the list of top 50 countries in the world of ease of doing business.

 Financial Reforms need clear intentions: It is true that there can’t be big reforms or changes from a budget, but in the Modi 2.0 the government is ready for big economic reforms, it should be reflected in the budget. At least those reforms may be mentioned in this regard. There is a long list of reforms in different areas of the economy. It should be clarified why these reforms are necessary.

These reforms will help in attracting investments at the domestic and overseas level, making India the world’s largest manufacturing force and increasing employment. The oppressive power inherited from the British and congress will have to change. It is a message that the government wants to promote economic development, property and prosperity through these reforms. FM wants to strengthen the economy.

Each and every field is waiting for such reforms, which can be used effectively for the energy of the youth of the country.

Similar Tax levied on different assets class: A similar tax should be levied on different asset classes (i.e. shares, property, gold, bond fund etc.). There is no hope of a change in the tax structure in this time budget, but FM should focus on eliminating ‘tax discrimination’ on individual assets. After all, no human decides to save or invest by looking at the regulator. Therefore, there is no point in considering a year for stocks, two years in real estate and three years in debt products as long term. If we have to promote financial savings, then the FM will have to end this favouritism. She have to create a system of capital gains for all asset classes including PPF, Gold, Real Estate, Bond and Share. The same mechanism will be implemented even after switching to the investment i.e. selling a house and buying a second house does not seem like a capital gains, but this money is exempt from withdrawing money from a mutual fund and investing in another mutual fund. Practically this will increase money flows in the economy.

Goods and Services Tax (GST) 2.o should be in place: In the first tenure of Modi, Parliament made GST law. This is a wonderful and intriguing law. GST was implemented from a notification for a constitutional amendment, four central laws, 29 state laws and union territories. This is the historical achievement of the Modi Government. It has put the tax evasion on the head and made tax collection system better. For some time, small businessmen had difficulty in implementing GST, but now all the hassles have ended. In the second term of Modi, FM will have to try to bring electricity, petrol, diesel and liquor under GST to the state governments. She can start it with celebrating the BJP ruled states. The business entity are facing  problems with many tax rates with GST 1.o Still, there are zero, 5%, 12%, 18%, 28% and 1% for Affordable Housing i.e. a total of six rates. The number of these should be reduced to two to three, say 0%, 5% and 12%.

Disinvestment, there is no need to think about it : Disinvestment comes with more money in government hands. Economic efficiency means that economic efficiency increases. The government gets the freedom to pay attention to the work on which it should be paid attention. It is not a work to compete with or compete with the private sector. The finance minister will have to think that why the government should sell their companies or privatise their company. Government companies compete with private sector companies in the market. But the government is also the regulator and owns these companies too. This double role is not right. The government’s job is not to sell goods or services to the people. There is an obligation to create such an environment in which private companies come to the area and create employment opportunities and wealth creation. He can start disinvestment with Air India. After this, it can be extended to banks, mining, manufacturing and other sectors and industries. How big is the problem of government companies, it can be understood that in the first five year plan, there were five Central Public Sector Enterprises (PSE) with an investment of 29 crores, while 31 March 2018 total investment of 13 lakh crores, with a total of 339 PSE Were operating Only 19 new Central PSEs were made between 2016 and 2018. FM will have to plan it.

Financial Resolutions and Deposit Insurance (FDR) and failure doctrine: It is strange that there is no process of dealing with the failure of any company in the financial sector in the Three trillion Dollars economy. In the FRADI bill, 2017 an arrangement was suggested for this. In this there was a way of dealing with the failure of a company in the financial sector, a path. The country’s economy is now rising from Three trillion Dollars to five trillion dollars. In such a situation, the need for such a law for the financial sector has increased. He had to withdraw due to lack of clarity on FDI and FDI policy. There was a lot of controversy about the condition of that bill, which stated that the resolution corporation that will be formed under this law will have the right to keep some money for the customers (depositors in the case of banks) so that the sinking Company can be saved In this case, the need for the government, or taxpayers’ money, might end.

The critics of the FDRI bill did not necessarily explain that the depositors will agree on this. The middle path can be drawn on this condition, but it can be wasted in a lot of time. It would be good to apply the FDR bill by removing the condition or pressurizing the depositors to give this option to the financial institutions.

The Indian Financial Code (IFC): This is the first bill, which is ready to be presented before Parliament. The concept of this bill was prepared in March 2013 by the Financial Sector Legislative Reforms Commission. This is a great law, in which the common people and regulators who use financial services at the centre. Consumers do not think much about regulatory institutions. Anyway, most of these have been built to protect retired bureaucrats. Consumers’ attention is on returns. In the 2019 budget, when FM has finished discrimination in tax treatment for different asset classes, then she should pay attention to long-term reforms in the financial sector through IFC. Today the number of people who invest in financial products in the country is increasing. Therefore, through this law a new class of political supporters can be prepared and it can also be a soft export of India to India.

Direct Tax Code (DTC) : In the financial year 2017-18, 4.67 crore people and 11 lakh companies paid income tax in the country. This means that a large number of people are out of income tax. Therefore, like GST, it will also have to be re-fixed in Direct Taxes. This can be done through changes in policies and new laws. At one time the tax laws of the country are complicated, on the other hand, the tax bureaucracy is engaged in augmenting revenue at any cost. In this case, direct tax system can be made dependable through DTC. This can reduce taxpayer’s compliance costs. It can be easy for the government to manage it. With the implementation of DTC, all tax exemptions can be terminated. Clear rules and regulations can be made, which will help prevent tax evasion. The work that GST has done in the case of indirect tax, can do the same in the case of DTC Direct Tax. This will increase tax in proportion to GDP, which will ultimately strengthen the country’s macro-economy.

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