Good, Bad and Ugly of the India’s election

Yesterday FT did an interesting post on the 3 scenarios for the next government . The Good , The Bad and The Ugly directly impacting the economic scenario of India . The Fun fact: as many as 363 political parties participated in the 2009 general elections and only seven of them were national. India really does coalitions with gusto and there is a chance that anti-incumbwncy voting — embodied best perhaps by the anti-corruption poll-complicating AAP — might deny the BJP the seats they need to form the stable government apparently being priced in

The most interesting is to analyse the below scenario :

blog

Caveat emptor : The above is subject to change if Congress is able to form the govt 😉

One thought on “Good, Bad and Ugly of the India’s election

  1. Don’t Ask ” How ” ?

    At the bottom of the 42 page Election Manifesto of BJP , released yesterday , I tried to search , if in very small print somewhere , there was a footnote which read ,

    ” Please , don’t ask how we plan to implement these promises ;
    From where we plan to find all the money to execute these projects ”

    Here are my back-of-the-envelope estimates of what some of the MAJOR projects might cost :
    ————————————————————————————
    PROJECT ……………………………… Approx Cost ( Rs Lakh * Crores )
    ————————————————————————————-
    > 100 Mega Cities…………………… 90
    > Interlinking of Rivers……………… 60
    > Sagar Mala of Ports……………….. 30
    > Highways ( 25,000 Km )………….. 50
    > Housing ( 100 mill units )………… 100
    > Rivers Cleaning…………………….. 10
    > Other Infra Projects……………….. 100
    * Freight Corridors
    * Gas Grids
    * OFC Network
    * Quadrilateral Bullet Trains
    ————————————————————————————
    Total ……………………………………Rs 430 Lakh Crores
    ————————————————————————————
    Admittedly , not all of these money will be required in the very first budget that NaMo government ( – of course , only if voted to power ! ) , would present by end June 2014

    But a problem does not go away by postponement !

    There is only ONE viable solution to the FUNDING problem , viz:,

    > Union Government must NOT even try to fund these projects !
    There is NO WAY , it can find these kind of money thro taxation !
    There will be a revolt !

    ANSWER

    > Make it possible for the PUBLIC to invest into these projects by ” owning ”
    these projects – and earn a reasonable ” tax-free ” return on investments
    ( Bonds ? ) in these projects

    > Towards this end , create various INFRASTRUCTURE SPVs

    > Immediately modify PERSONAL INCOME TAX regime as follows :

    > Up to Rs 5 lakhs………………… NIL
    > 5.1 – 10 lakhs………………….. 8 %
    > 10.1 – 20 lakhs…………………. 6 %
    > 20.1 – 50 lakhs………………… 5 %
    > 50.1 – 100 lakhs………………… 3 %
    > Above 100 lakhs…………………. 1 %

    What is likely to happen with such ” INVERSE TAXATION ” regime ?

    Following few things :

    > Total personal tax payer base will go up dramatically from current 4
    crores tax-payers

    > with this ” INVERSE TAX REGIME ” , there will be no incentive to evade
    taxes and to generate ” BLACK MONEY ”

    There will be no resistance to accept ALL payments by cheque / electronic
    clearance

    The more you disclose as your income , the less you pay by way of taxes

    ( Of course , incrementally )

    > For a change , we will learn to reward honesty / efficiency / productivity !

    No need to bribe those Income Tax officers !

    > Suddenly , lakhs of crores of BLACK MONEY will become WHITE MONEY

    > There will be a huge surge in bank deposits ( – even with , the inevitable
    lower interest rates )

    > Banks will be awash with funds to finance businesses / infrastructure
    projects etc , encouraging entrepreneurs / self-employed to set up new
    businesses ( at 2 % interest rates of loans ) and generate millions of jobs

    In any case , BJP manifesto promises :

    > Rationalization and simplification of the tax regime – which is currently
    repulsive for honest tax payers

    > The process of bringing black money to India , what belongs to India , will
    be put in motion on priority

    > Minimize scope for Corruption

    Narendrabhai ,

    Here is your chance to ditch the ” Historical Baggage ” into the Indian Ocean
    and come up with an INNOVATION that will take India ahead of China !

    If President Kubitschek of Brazil ( 1956-61 ) – son of a poor salesman – could construct Capital city BRASILIA and a 1500 Km highway , in 41 months , surely , you can do better , 57 years later !

    * hemen parekh ( 08 April 2014 / Mumbai )

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