BUDGET 2016-- Your Attention please, Mr Jaitley

 BY APURVA RAI

THE Finance minister Mr Arun Jaitley has sought ideas from the general public on making of the Budget for the financial year 2016- 17. These suggestions have been invited on mygov.in, the govt web portal.

There are numerous issues which require the attention of the honourable Finance Minister. Though I am not competent enough to comment on such a highly specialized subject of business, commerce and economics I could not resist once I went through this invitation on the government web portal. My observations come merely as aam admi who thinks about the prosperity of India and the welfare of its people.

INCOME TAX ISSUE

Raise I-T Limit: Income Tax rebate is the major issue that crops up every year as time approaches for the Budget. For a long time there has been a demand to raise income tax limit and make it Rs 5 lakhs. I don't see anything wrong with such a demand. After all we all have a desire to earn well as we grow. It is a simple fact if we earn well we will live well, spend more and save more as well. It however, pinches a lot when we find that a lot is deducted in the name of income tax from our salaries every month. I feel that I-T rebate limit must be raised in order to make people spend in some areas because-- (a) spending carries with it a cycle of generating business and employment, and (b) it also brings savings which helps the govt.

Not allowing people to earn well is the major cause why people resort to tax evasion.

It is a well-known that only a fraction of people in the society pay income tax and majority simply give it a skip. What an irony that those who pay continue to struggle to get a rebate. These are the people who are also continuously monitored by IT Dept of  the Finance Ministry. It pains a lot when one finds that the government makes little or no effort to bring many more into the tax net. The govt's earning can go up manifold if genuine efforts are made to make maximum citizens pay income tax even though it is a small amount.

Bring more people in Tax Net: It should be the endeavour of the government to make every citizen-- big or small-- pay income tax. This will bring more revenue rather than taxing the select few who are already under the scanner and have no choice to escape.

A large number of people in unorganised sector earn well but do not pay even a single paisa as tax. 

There are people who call themselves 'poor man' when it comes to paying taxes but have a very decent income when it comes to making an earning. For example there are many roadside vendors, small to medium shopkeepers in small B or C class towns, small time contractors, carpenters, plumbers, electricians, small businessmen etc. All these people just do not pay even a single paisa as tax. Make them pay some amount. It should not forgotten that these people have their own pucca houses, possess a vehicle and their homes are well equipped with gadgets like laptops, costly mobile phones, refrigerator, TV, cooler, geysers, gas etc.

Social Schemes: Several attractive schemes may be launched to encourage people to pay income tax and thus widen tax net.

A) Govt may come up with mass Health Insurance scheme wherein only income tax payee is eligible.

B) Purchase of property whether in urban or rural may be linked to income tax. This may be done by making it mandatory to quote PAN number or the Aadhar number.

C) Purchase of more than two vehicles and buying them within a span of five years too may be linked to income tax. People have money to buy more vehicles and also change them frequently but do not have money to pay taxes. How funny!

D) LTC toAam Admi: An innovative scheme of giving Leave Travel Concession to Aam Admi may be introduced which may be directly linked to paying income tax. Any citizen of India—husband, wife and two children below 18 years of age may be entitled to LTC once in two years provided any one of them has been filing Returns for past five years. The category of travel concession (Sleeper Class, A/c 3 Tier etc) may be determined by the amount of Tax Return that the family has filed.

Voluntary Income Tax: The problem with the govt is that if  I-T  limit is raised to Rs 5 lakhs then all those earning this amount will not pay a single paisa as tax. Why not make such people too pay some money as tax voluntarily?

Those paying taxes may be entitled to several tax benefits offered by the govt by way of several schemes. The benefits may come under different slabs. Like if you are paying Rs 2000 annually as Voluntary Tax you are entitled to Health Insurance on payment of certain amount. If you are paying Rs 5000 annually you can avail 5% discount on train ticket to home town once every year. If you are paying Rs 15,000 annually then you may be entitled to LTC once in two years for self and spouse.

There can be several other schemes likewise.

Problems of Unemployed: Job cuts, salary cuts and retrenchments have become a norm in an age of growing competition. A good number of people face retrenchments or lose jobs for some or the other reason. While young find a different job there are many who cannot get job due to age factor. The problem with such people is that they were paying taxes as long as they were earning but now they find themselves helpless. Such people also face difficulties in maintaining social status as they feel shy of putting up the truth that they do not pay taxes. Not paying tax not only brings them bad name but also creates problems in several areas where it is mandatory to show your tax returns of the past few years. Getting visa is one such thing.

Can the govt help such people.

SENIOR CITIZENS

LTC after retirement: Once a govt employee retires all facilities that he enjoyed during his tenure of service too come to an end. However, the facility of Leave Travel Concession may continue even after retirement. In fact, it is only after retirement that one feels like exploring places as one is relaxed, has time to spare and some money to spend. This facility may be given once every two years. This step will empower the senior citizens as they will not be dependent on others in matters of travel. LTC, as we all know, is major ingredient to push tourism within the country.

I-T Exemption: All senior citizens above the age of 65 years may be exempted from the hassle of filing income tax. This will make the elders financially independent. The minus point of this facility becomes a plus point for Sr citizens. Younger people might take advantage of the scheme by investing money in the name of elders but on the other hand this will give financial freedom them—something that the elders are generally deprived of.

Medical Insurance: Old-age care is grossly neglected in the country and many times the doctors too do not take much interest in them. The hospitals do not have separate units for them and there are no specialists for them. This is the time when one needs maximum medical care and therefore Medical Insurance for senior citizens should be made mandatory on payment of paltry amount. It should be binding upon health insurance companies to have special policies for them. Once this facility is made effective the elders will no longer be neglected by the family members.

BLACK MONEY AND POLLUTION

Is there any relationship between black money and pollution. Yes, there is. Where is most black money spent--- in buying gold or precious stones, houses and cars. While the govt is taking steps to curb expenditure on gold the other two areas need urgent attention.

The rich having overflowing vaults see homes in big cities as investment and multiple car ownership as status symbol. And both these are causing severe air pollution in major Indian cities. This practice needs to be checked immediately and strictly.

Housing an investment?: Housing is a basic need of all of us. Unfortunately it is being seen as an investment and the attitude to see a home as investment needs to be changed urgently. A home is a shelter which and falls in the category of basic needs and thus cannot be an investment. And still if it is so then there is nothing more shameful than this. It is important that the govt takes immediate to check this bad tendency. This may be done by restricting people from buying a maximum of two houses in one city (within a radius of 200 kms) and maximum four houses in the entire country. While purchasing a house one should attach Pan number or Aadhar number along with the registration deed. This number may be used to match further housing deeds. The software should be so programmed that it is impossible to register more than the permissible number of houses. This way not only construction activity will come under control but people will be encouraged to splurge elsewhere like tourism, clothing, food, buying gadgets etc which will indirectly push economic activity and lead to increased production.

Controlled construction activity means lesser pollution. Simple, isn’t it!

Restrict buying of vehicles: Ownership of more than two cars should be made increasingly difficult. Purchase of third car should be steep and fourth or fifth prohibitive. Also there should be restriction on purchasing a new vehicle within a span of five years.  This means if a vehicle is purchased in 2016 then another vehicle cannot be bought till 2021. No doubt people will find ways to flout rules but this may be checked by treating husband/wife as single unit. That means only one car can be purchased by husband or the wife and that too not before five years.

AGRICULTURE AND FARMERS

India is essentially an agrarian economy. In pursuit of pushing up manufacturing sector not much attention is paid to farming and agriculture. As a result farms and cultivable land is fast giving way to either industries or housing. Farmers are left to their fate and since they are not educated and have almost zero access to various avenues they are committing suicides.

Pvt investment in Farming: When a person can set up an industry on a large chunk of land and earn the status of entrepreneur then why can’t people be allowed to invest in agriculture fields and get into harvesting leading to increased production and agricultural growth.

Solution to Land Bill: There has been much hullabalo over proposed Land Bill. The end result is that the Bill could not see light of the day and has been dumped in cold storage.

This problem may be solved by inviting private investments in harvesting. The investors may be called Agriculturists (like industrialist) who will invest large amount in farming. This might be done in the form of an agreement between the Panchayats and the company. The company will, in no way, be authorised to buy the land of the farmer. These Agriculrists will make all the investments in field right from bringing seds to irrigation and ploughing. They will employ farmers who will harvest his own fileds without spending his money and will, instead, get monthly wages as well as a share in the produce. The rest of the produce will become the property of the Agriculturist who will collect it, transport it and sell according to his will.

This way the farmer will not lose ownership of the land, will get assured monthly income as well as share in produce and thus can live a comparatively improved life. The Agriculturist does not take away the ownership of the land merely invests in farms and builds his own brand. If good results come in the farmer may feel prouid to be part of the brand.

Once an Agriculturist gets right to invest he will mobilize his resources to increase production and for this will hire experts, buy best seeds and fertilizers and also bring in better machinery.

The crux of the matter is that if we can have Parle biscuits then why can’t we have Parle Wheat Farms or if we can have Kissan Jam then why can’t we have Kissan Orchards.

Selling Farm Product: The farmers do not have direct access to the market and since they are poor they sell their harvest to middlemen. Thus the onion is stocked in cold storages and an artificial scarcity is created to make profits. However the farmers are deprived of the profits. So is the case with wheat. Why shouldn’t the farmer be allowed to sell all his products to anyone, anywhere and procure best price. If the farmer sells his produce directly he earns the profit too directly.  Allow the farmers of one or two villages to join hands and have their own cold storages or transport system to sell their products. For this purpose the Panchayats can play a big role in the welfare of the village farmers and give them a better life.

IMRPOVED HIGHWAYS

Green patches on Highways: Both sides of highways should be auctioned to private players who will grow fruit and flower bearing trees on the sideways. This will lead to increased greenery leading to enjoyable drives, allow increased production and bigger profits to the owner. If a highway around Nagpur is given to a private player to develop orange fields that we can see an increased production beside increased green cover.

Facilities at Petrol Pumps: Petrol pumps on highways are most after as one gets to reap good profit out of it. While these petrol pumps acquire big piece of land they offer almost zero facility. It should be mandatory for all petrol pumps to have first aid cabin, a basic shop which sells essentials including medicines. Several petrol pumps should also be developed to have vehicle maintenance services or car wash services.

With these services the journeys on highways will not only become more enjoyable but will also prove helpful to people in moments of need.

AUTOMOBILE INDUSTRY

Restrict ownership of cars: All of us want to buy a vehicle of our own, particularly a car. To cherish our dreams we all look at the finance minister to announce duty cuts on vehicles so that they become more affordable.

It does not matter much if a family owns a single car. The problem arises only when families start buying second, third or fourth car. There is need to check this tendency because "Your prosperity becomes my problem". People may be allowed to own upto two cars but third onwards the ownership of a vehicle should become prohibitively expensive. The finance minister may levy more taxes if a family buys third or fourth car and that too big in size. This will reduce ownership of cars, bring down pollution level and reduce traffic jams in cities.

Drive for five years: A new trend has emerged in the last few years. People have started changing vehicles earlier than required. This needs to be checked and the purchase of another vehicle within a period of five years should be completely banned. To restrict number of cars husband/wife may be counted as single entity. This way if a person buys a vehicle in 2016 he will not be buy another till 2021.

Concessions to Mopeds: There are people who use cars to visit local markets etc. and this leads to traffic jam and parking woes. Local market can be easily accessed by mopeds and thus save lots of petrol, space and reduce pollution. Auto companies may be encouraged to introduce a large variety of mopeds with storage facilities etc. The mopeds up to 60 cc can be given huge excise benefits. If smart mopeds are launched then people having office within a radius of 10 kms will be encouraged to use them to travel to workplace even.

Battery Bicycles: These days there is lot of focus on using bicycles and cycle tracks are coming up in a big way. It is fine to use cycle to commute to workplace or otherwise too. However, in extreme weather conditions that we have in India it is practically not possible to peddle your way to office all the time.

The cycle can become much more convenient and user-friendly if we get small batteries and fit them into it. This will allow a person to charge his bicycle at one time and cover some distance even in extreme cold or hot weather.

Diesel Engine of Cars: A growing number of people are switching over to diesel cars which have become a major cause of air pollution in most cities. Encouraged by the sales the companies too are coming up with newer diesel models and affordable small diesel cars.

There should be complete ban on production of diesel cars below 1200 cc. Thus there will not be any small diesel car and their numbers will come under control. Similarly, fuel guzzler diesel engines should also be banned.   

Compact Vehicle Norms: At the moment cars with a length up to 4000 mm and 1200 cc engines are give special rebate and thus a special class of Compact Sedans or Compact SUVs has emerged and become popular among people. The existing rebate may be relaxed and given to cars up to 4500 mm and 1400 cc engines. This will encourage people to abandon larger cars and switch to compact vehicles which occupy less space and give more mileage. The companies will, thus, be able to offer better options in the compact segment.

ENCOURAGE SPENDINGS ON CONSUMABLES

While the government should control spending on housing, automobiles and jewellery people should be encouraged to spend more on clothing, eating out, travelling, buying gadgets and goods for domestic use etc.

Spending on consumer goods generates manufacturing thus offering more employment. This also brings money into circulation which has its own positive effects.

BANKING HABITS AND FAKE CURRENCY

The government recently launched an ambitious scheme of opening saving bank account for the aam admi but the whole turned out to be a failure as most bank accounts are lying without cash.

People get credit cards but are discouraged to use them as the outlets levy a surcharge on them. There should not be any surcharge on use of credit/ debit cards and even if it is there it should be minimal. At present shopkeepers charge 2.5% for each transaction. Once the surcharge is removed more people will use the plastic money. Thus they will put in more cash in the saving accounts and the problem of fake currency too will be solved to a great extent. 

I have furnished my ideas what I felt as a common man. Hope the experts in the Finance Ministry will get my point and find them useful for the country and its people.