Thursday, May 24, 2007
REFORMS IN TAXATION
Today suddenly it crossed my mind that why should the govt should lose some tens of thousand crore rupees for giving different type of tax incentives to develop industries in backward areas.I started introspecting whether it is worth losing and is it leading to any good for the common people of the country.Okay if we take it that it leads to lots of employment as investment is coming in.I think there is really a need to study how much employment these companies are really bringing in and its impact for the local people.I hope there is lot of heavy machineries installed instead of local employment.The next point what type of deviance are we giving for some industry which we are pushing to put themselves in a uncompetetive place.Fine on the other hand the amount of money lost in these tax benefits can be invested in the social indicators of these local people who are disadvantaged by their locality will be more fruitful in their development. I think in this globalised world we should also think more smarter collectively as a country to win the world.In the case of backward areas we should think over in developing those areas by finding out those suitable type of development in livelihood like livestock or the special type of agri products can be technologically supported and can be helped to be marketed to the outside world that will make it more a inclusive growth of all the parts ad people of our country.
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2 comments:
Ramesh,
I accept your views but it leaves one way of seeing all from the government perspective.
As India Inc. in the globalization market, put side the industries that they are in the growth stage such as IT, Telecom; other industries attracts stiff competition from the other countries, leads to decline stage of these segments. Tax incentive is one of the ways of revive these industries.
More over, Tax insensitive will infuse not only the foreign investment but also access to the latest technology; will lead to higher capacity utilisation. Even I can share one example from my Industry i.e Oil & Gas. Government’s New Exploration Licensing Policy (NELP) helped Indian companies to get the access to the latest tech; intern help to reach higher recovery in the Oil & Gas field. Of course, it will reduce our oil import bill.
Rgds,
Joshva
Thank u for spending time and reading my blog and writting an excellent view on u r side. I am not against giving incentive or allowing foreign investment in the fields where we do not have expertise in technology or in management.So u r view of NELP is rightly valid for FDI.My point is that We are targetting our incentives at wrong places like subsidising fertiliser industry for their inefficiency and not the farmer who ultimatel suffer due to high input cost.I will give u one example I will like to start a Cycle manufacturing company i Uttaranchal where i will not need to pay any tax for first 5 years . I will start an industry and i will sell it in the market which is 99% outside Uttaranchal.The money which i saved by not paying tax for example 100 Rs per cycle I will spend it in transpoting it to far off Bihar Which will cost me 90Rs.What do we achieve out of it? Anything good we have subsidised an industry which is not suitable for that place. Will this type pf policies work in this globolised era. I can get the cycle even from China for half the price I should think of producing it more cheaper and not by subsidising a wrong place of Installation.Ya at this point i also consider the plight of people in hilly terrains. we can make policies which is suitable for generating employment in those places in a profitable manner like Apple processing indutries or other Agro based industries whose product can be exported.Okay i think i have loaded too much bye sir.
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