Jaitley's Budget: Challenge to fight pollution, blackmoney menace!

BY APURVA RAI

FINANCE Minister Arun Jaitley is set to present the Union Budget on Feb 01, 2017. This year there will be no separate Rail Budget and that makes the Budget more interesting. 

Once again the Minsitry of Finance invited suggestions/ ideas from the general public on Union Budget 2017. Like previous year I have submitted my ideas this year once again. In my opinion this is the most appreciable initiative taken by the Modi government that suggestions are invited from the common man which gives a feeling of involvement and helps them take pride in becoming part of the Budget-making process. After all, Budget is all about aam admi.

Ideas and suggestions are not easy to come but very easy to criticise. My ideas are manifestation of my feelings that come to me as a layman. I do not think I need to go through complex theories of economics or difficult calculations of finance to form my opinion for the annual Budget. I also feel that the Union Budget opens up many opportunities to initiate several changes for the benefit of the society. My strong desire to see concrete changes in society and the capacity of Budget to initiate them have resulted in my Second Opinion.  

AUTO SECTOR

Growing air pollution is the biggest concern for us today. The Delhi government has already tried odd-even number scheme for passenger vehicles but to no avail. If vehicular pollution is on the priority list of the government then several other stringent and harsh measures need to be adopted so that the quality of air stays at desired level. In my opinion following steps may be useful:

1) LONG-TERM OWNERSHIP: No resale of personal vehicles for five years after purchase. This means once a vehicle is purchased and registered in your name you have to own it and ride it for at least five years.

Benefit: This will bring an end to quick sale and purchase of vehicles and thus put a check on their growing numbers.

2) RESTRICT OWNERSHIP: No individual should be allowed to buy more than two vehicles in compact segment. Impose higher tax slabs for all subsequent purchases. Similarly higher tax for the second vehicle itself if it does not fall in compact segment. The tax slab keeps rising with the number of vehicles purchased by an individual.

Benefit: The fast growing number of vehicles hitting the roads every year will come under check. In some way or the other ownership of numbers of cars will cease to be status symbol.

3) COMPACT VEHICLES: Compact cars or compact SUVs have proved beneficial for the people and society. These vehicles not only come with economy of space and fuel they also provide every decent feature that one expects in a big car. Tax benefits on compact passenger vehicles is an added advantage. But this too is a fact that a lot of people prefer to buy bigger cars as it adds to their status, lifestyle and expectations. It is, therefore, important that the definition of compact cars be revised to adjust slightly bigger vehicles in this category. At present the length approved for compact cars is 3990 mm with 1200 cc petrol engine. These vehicles are doing good business too.

If the government comes up with some more relaxation by fixing the length at around 4300 mm with 1400 cc petrol engine then it will certainly attract those who opt out of compact car segment. This will also give an opportunity to the manufacturers to come up with even more innovative designs and luxuries in this category.

Benefit: Smaller cars are frugal, require less space and are more eco-friendly. Therefore reduced congestion and pollution.

4) BATTERY BICYCLES: There is a lot of emphasis on cycling these days. Government is spending millions of rupees in making cycle tracks but they are not proving useful. In extreme weather conditions that we have in India it is practically not possible to bring cycle into everyday use. Cycling today is either compulsion or hobby. Unfortunately, it is not the people's choice.

To make cycling more convenient announce tax benefit for manufacture of small, affordable batteries to be fitted into them. This will hopefully make more people opt for e-cycles and they will be able to cover a distance of nearly 20 kms each day with great ease even in extreme weather conditions.   

5) MOPEDS: Mopeds have almost vanished from Indian roads. In today's conditions they are much needed vehicles for restricted individual use. Modification and research in design can help it win people's heart.  Heavy tax benefit for mopeds up to 50cc engine returning a mileage of nearly 100 km. Lucrative, isn't it!

6) HEAVY VEHICLE, HEAVY TAX: How can a 1500cc car have same tax as against 2000 cc car? So heavier the car, higher the tax in ascending order. Higher tax for heavier vehicles means higher revenue for the government.  

7) FUEL PRICE: A person who purchases a small car for nearly Rs 5 lakhs pays the same price to buy petrol vis-a-vis a person who rides a car worth Rs 20 lakhs or even more. Shouldn't the person with costlier car and higher paying capacity be paying more to buy fuel? Think... think... think.

Most importantly, only corrupt and cash hoarders ride such cars and have huge paying capacity. Just 'extract' money from them. Also, these are the people who buy fuel on cash payments. So why not make them cough out more!

8) LUXURY VEHICLE TAX: Just like compact vehicles, define luxury vehicles too and tax them more. If I am buying a car for Rs 35 lakhs why should I not pay higher tax for it? We should not forget that luxury vehicles are generally purchased by those who have 'surplus money' or black money. So, why not make them shell out more for their whims and fancies! This will directly enhance government revenue to a great extent.

REAL ESTATE

It is very unfortunate that housing in India is seen as an investment and not a need. Real estate sector, particularly the townships developed by private builders, is an area where a lot of black money has been pumped in by wealthy and corrupt people. The government needs to take stringent measures so that people stop 'investing' in housing and that it remains the need of all mankind.

Also, the government needs to bring strict laws on construction, modifications/ alterations and re-construction of houses which attracts huge black money as most of the payments are made in cash.

1) RESTRICT OWNERSHIP OF HOUSE: Let people understand that a house is their need and not an investment. Therefore they cannot be allowed to own as many houses as they wish. Every person with disposable income, whether black or white, buys a house without caring if it is required or not. Most of the money is spent in buying private builder houses. This tendency needs to be checked strictly and seriously. To check black money it is very important that a people are restricted from buying any number of homes at any place they wish to buy.

In fact, ownership of multiple houses is seen as status symbol in our society which needs to be deplored and discouraged.

No salaried person should be allowed to own more than two houses within India-- whether it is from government scheme or from private builder. While buying or selling a house a couple should be treated as single entity.

Conditions may be laid if somebody is eager to buy more houses. It will be wrong to say that those buying several houses do not pay taxes but it would also be not wrong to mention that such people do not declare their earnings correctly. Registration charges for purchase of a house beyond set limit should be exorbitant.

Benefit: Circulation of black money will come under check and people will invest where actually they should be investing. Let people make investments in share market, mutual funds, fixed deposits etc etc. Money that is invested in various modes will increase government revenue.

2) TRANSPARENT REGISTRATION: It should be mandatory that every registration of house or land is done through Aadhar and PAN number. This will prevent fraudulent and repeat purchase of property by any individual anywhere in the country.

3) CHECK RE-CONSTRUCTION/ ALTERATION: Many people buy old houses which are cheaper and one has to pay less registration charges. Once the purchase is accomplished the house is demolished and a new structure with all fancy fittings and luxuries is raised that makes everyone say vow! The owner politely responds to the smiles and words of appreciation and takes relatives and friends for a complete corner to corner round of the house. While everyone smiles and congratulates openly there are also murmurs about funds and the source of income of the house owner. Obviously there is a tacit hint at black money or spare money that has been pumped in without any fear. We need to have stricter provisions in our Budget  so that liquid money does not play a spoilsport in the society. 

RAILWAYS

Almost each one of us goes for a train journey whether it is the necessity or it is for fun and tourism. While most trains remain booked yet Indian Railways runs into heavy losses. The Budget should initiate several drastic steps so that inconvenience, safety and promptness is addressed with priority.

1) CASHLESS BOOKINGS: No cash payment for train tickets in all urban districts. This will bring a revolution in making a cashless society and eliminating touts.

No cash means the person making payments is well identified, no scope for fake currency, no touts and no black money. Similarly, air tickets should also not be given on cash payments.

2) STOP FREE PASSES: As of now people take pride in saying we get free train passes which should change the other way round and people should be proudly saying we pay for our travel.

Railway staffers get a number of free passes and family passes. Restrict this. Not more than three free passes for individual travel and two family passes in one calendar year. The passes will lapse if not used within set time limit.

For all other travels make them pay like all others. When people can be asked to give away gas subsidy why can't they be asked to forego free passes.

Similarly free travel for many others including politicians and ministers should be brought down drastically. Thus the government increases its annual revenue marginally.

3) BLACK MONEY IN TRAVEL: Can someone imagine use of black money in rail journeys? Yes this too happens. There are plenty of people who don't mind taking train journeys for every small reason and nobody keeps a count of the travel. And the trains or class such people travel-- it is either Rajdhani, Shatabdi or any other superfast train and the class of journey is certainly not less than AC Second. An aam admi with honest income cannot even dream of buying two AC Second class tickets even once in a single financial quarter. AC tickets are expensive and one may not speak up but it hits your family budget.

People having undisclosed income or black money shell out cash at the booking counters or to the booking agents/ touts with great ease. Is there anybody to check how much money such people spend in buying train or air tickets in a year? This transaction of undisclosed income needs to be urgently checked.

It is not that every person buying tickets in cash has black money but those who have neither feel the pain nor wish to pay otherwise. It is this tendency that needs to be checked and brought under scanner. This may be done in two ways:

a) Stop accepting cash for bookings in urban/ semi urban areas.

b) Develop a device to check how many times a person is travelling and in which class. (This is not impossible). This implies for both rail and air travel.

Benefit: This will reduce crowd and check expenditure of black money in travelling.

AGRICULTURE AND FARMERS

India is an agrarian economy with a huge number of farmers who are poor and financially weak. Ironically these poor farmers have to invest money to plough their fields and produce food for such people who are financially much more secured than them. Unfortunately nothing concrete has been done for the farmer community since Independence. As a result the farmers take loans for harvesting and, when not able to pay, commit suicide. One question that always hits my mind is that why investments in harvesting are not invited from businessmen/ traders or corporates especially those in food and agriculture industry.

1) PRIVATE INVESTMENT: Though we have already seen Green Revolution in agriculture we still need to bring another one for the uplift of farmers. To help farmers the businessmen should be allowed to invest in the fields simply for the reason that they have money and are capable in multiple ways. Details can be worked out how shall it be done.

In this scheme the money comes from businessmen or business houses but the farming is done by farmers who continue to remain owners of their land. They also get maximum share of profit.  The businessman just invests, gets some part of the produce and helps farmers in distribution too.

The agro-based industry needs to be encouraged and may be allowed to enter into the fields in collaboration with the local panchayats.

2) GROUP FARMING: Some farmers have large piece of agricultural land but don't have enough funds for farming. Some farmers have small land where they are not able to grow sufficient crop. The end result is that the total production of crops is less than expectations. Or that we can have even higher agricultural production if all the land is thoroughly cultivated in professional manner. For this purpose the corporates need to chip in after due negotiations with the panchayats. The corporates can get large chunk of land on lease from all or majority of farmers. This will see dawn of a new era of farming in India as the big houses will spend money to bring new technology, high quality seeds and fertilisers besides agriculture professionals to supervise the entire task. The corporates also help in transportation and marketing of the produce.

This way the farmer skips all hassles of funding for harvesting, remains owner of his land and gets major share of the produce or its price. The panchayats remain in full command as they have full interference in farming, trading and in all negotiations for the welfare of famers.

Benefit:

a) Private investment will bring a huge Green Revolution in the country with improved technology and larger fields being put to harvesting.

b) Corporates are smart and would encourage such products that are more in demand or fetch higher price. The country can see improved production of spices, cashew nuts, fruits etc.

c) A lot of farmers who rush to cities to work as labour will return to the villages once prospects brighten up in agriculture.

3) KISSAN MALLS: We are witnessing Mall Culture in urban areas and this has changed the way people shop for commodities. Similarly encourage Kisan Malls in rural areas so that the farmers too benefit from the new marketing technique. The Kisan Malls shall sell everything that a farmer needs and the farmer will be able to get everything under one roof.

4) TAX FARM INCOME: Direct taxes from rich farmers should be introduced. Also, it is an open secret now that a lot of people use agriculture to evade taxes. It is also an open secret that those benefitting from taxes under farm income are not essentially farmers.

It is high time that farm sector starts contributing its share in direct taxes. This way the government increases its revenue.

SENIOR CITIZENS

The condition of senior citizens in the country is very vulnerable. We hear plenty of cases where elders are neglected, abused, cornered and compelled to live a secluded life. Therefore the Budget needs to make certain provisions that empower the elders and gives them some security at a time when they need it most.

1) ZERO TAX:

a) Every senior citizen above 70 years should be exempted from paying direct (income) tax. To check inflow of black money through this process a condition may be imposed that he or she should not have more than Rs 10 lakhs in bank account. Tax slabs may be imposed if the amount exceeds the set limit.   

b) Similarly all senior citizens above 65 years should fall in lowest tax slab.

Benefit: To avail this facility a lot of people will invest money in the name of their parents and elders. Thus the elders get cash money into their accounts and would feel secure.

2) COMPULSORY HEALTH INSURANCE: Every senior citizen should be given compulsory health insurance. (Modalities to be worked out). Insurance companies can come up with innovative and exclusive plans for seniors.

3) LTC: All employees stop getting Leave Travel Concession (LTC) after superannuation. In fact, it is after retirement they have plenty of time to travel and explore places. The couple should continue to get LTC once every two years.

An innovative LTC scheme may be drafted for such senior citizens who have not retired from government jobs. The purpose is to allow elders to move around the country with comfort. This will not only boost tourism but will also keep many family vices at bay.

4) RESTRICT BANK A/C: No senior citizen can have more than two savings bank account. The truth is that multiple accounts are not required. Special Debit cards for them may be provided to provide extra benefits.

INCOME TAX

What does a common man wait for in the annual Budget-- it is rebate in income tax. Unfortunately not even 10 per cent of Indian population pays income tax; those who pay find the going tough and are perennially looking for a rebate and those who do not are perennially enjoying the goodness of life.

A second look at the income tax only reveals that it has only derailed the family budget of those few who have been following the rules while those flouting them form a majority community in India who are smiling and enjoying the goodness of life.

1) ABANDON I-T: If income tax is not the only method to collect direct taxes then it should be discontinued with immediate effect. First reason for it is that it is very easy and convenient for the self-employed to hide their income. Hence they never pay appropriate taxes. On the other hand those in jobs cannot avoid paying tax since the TDS is already deducted from their salaries. The system is unfair and discriminatory in nature too as one section of society cleverly avoids tax and the other is helpless.

Therefore the government needs to impose such direct tax which is respected by all citizens of the country. Those in jobs get nabbed in the tax net while others escape because some can't hide their income and others can't declare it.

The alternative method to widen tax net is either to introduce transaction tax or the national tax.

2) PETTY VENDORS, HIGH INCOME: There are numerous self-employed whom we know as tax payers and these are the highly respected people in our society. It is another fact none of them is honest while filing taxes and their filings are mostly inappropriate. The law has been too weak to make this section of the society cough up right figures both, in declaration and filings.

At the same time there are other self-employed who are poor in the eyes of society but make a good earning and just do not pay any tax in the garb of being poor. Such people include tailors, sweet shop owners, grocery owners, other shopkeepers in city, roadside sellers like paanwalla, chaatwala, dhabas and small eatery outlets, carpenters, barbers, small time building contractors and so on. These are the people who can be easily found in every locality of every city whether it is small or big and are the ones who do not have any record of paying income tax.

The irony is that the society treats them as poor, roadside vendor but the reality in many cases is that a lot of such 'small businessmen' own vehicles and have number of dwelling units. These are the people who have plenty of cash money in their pockets and are often arrogant. Isn't it time to bring them under tax net?

3) JOBLESSNESS: Privatisation is the gift of modern age. The biggest advantage of privatisation has been that it has generated millions of jobs and has attracted talent with high salaries and quick promotions. The biggest disadvantage, on the other hand, is layoff or hire and fire policy if someone does rise to the expectations.

As long as a person is in job he is happy and contented and on tax front the TDS is promptly deducted from the salaries. So, as long as you are in job no problem. But what happens when a well paid and a stable person suddenly faces layoff  or has to quit for some or the other reason? The person who has been paying taxes sincerely and honestly till now suddenly has nothing to declare or file and becomes defaulter in the eyes of law! Such people are already in trauma for losing their employment and non-declaration or filing only aggravates the situation. Does the Budget make any provision or relief for such people?

 4) GOOD SALARY A BURDEN: The biggest advantage of privatisation is an opportunity to move up the ladder in short span of time and quick rise in compensations. Who does not want a good salary hike and monetary gain is why most people make extra efforts in their respective professions. A salary of rupees one lakh may not be a big issue but in term of income tax this falls in the highest tax slab of 30 per cent. Now who the hell would like to part away with such a huge amount of tax!  Obviously one wants to save his  hard-earned money some way or the other. The Budget should make provisions so that people continue to remain honest and file the taxes happily. So far this is not happening. Can the Finance Ministry ever imagine a businessman or trader with an annual income of rupees 12 lakhs paying 30 per cent tax? No never. So why this injustice with a salaried person?

4) Single Income Households: It is not uncommon to find homes where only person earns and feeds the entire family. Has the Budget ever announced special rebate for such persons? If there is a single earner then his/ her salary should be divided by four (assuming four persons in the family as standard) and then per head income of the family be calculated and taxed.

5) EASE OF FILING TAX: Paying taxes and their calculation is still a complicated task. Even educated people hunt for chartered accountants to file taxes who make hay while the sun shines. The SARAL has not been saral (easy). So the tax filing should be the most simple, hassle free task which can be done from home at the click of some buttons.

6) CASH HOARDING: It is well known that mojority self-employed people either do not file taxes at all or file it inappropriately. So where does there surplus income go? Well, the surplus income finds its way into lockers, pillows and mattresses, almirahs and closets, secret chambers in the walls of the house and so on. Keep on piling currency because there is no tax on cash hoarding. Isn't it the biggest failure of our annual Budget?

GOING CASHLESS

Demonitisation announced by Prime Minister Narendra Modi has stirred hornet's nest. The move aimed at using less cash has been appreciated by many and put to use as well. I have seen several roadside vendors, vegetable sellers, dhabas using e-payment mode like Paytm. On the contrary many shopkeepers in local markets are showing resistance to alternative payment modes like accepting credit/ debit cards or other e-wallets. They insist on 'cash only' and the consumer is left with no choice other than shelling out cash if he has to make a purchase. Obviously the intentions of such shopkeepers are not clean.  

While it cannot be denied that cash money is needed for day-to-day small transactions cashlessness can be made a norm for bigger and larger purchases. To bring a cashless society alive several other measures may prove useful.

1) More smaller notes: A common man does need high denomination notes for everyday transactions. So the government should print high denomination notes like 1000 and 2000 in limited quantity. Rupees 500 note, presumably, is sufficient for mass use.

2) Surcharge on cards: First of all it should be mandatory for all shopkeepers to use multiple options to receive paymements and preferably should be encouraged to has PoS (Point of Sale) machines. Secodnly, the surcharge on using cards should be very low and well defined. Unless alternative modes of payments are not very lucrative people will not adopt it happily.

3) Multipurpose Cash Cards: Forget the hassles of credit or debit cards. Just one universally acceptable card from your bank, recharge it and use it anywhere, anytime. Keep on refilling according to your needs. This will be happily acceptable to the doctorws and lawyers too who normally charge their fee in 'cash only'.

4) GIFT CARDS: Cash is again a popular gift in marriages, birthdays, anniversaries or other celebrations. Should the banks not come up with Gift Cards suitably and attractively designed for such happy occasions? Just buy one at a nominal price and refill it with an amount of your choice. The gift envelop should rather carry a Gift Card instead of cash. isn't it a good idea to go make happy celebrations cashless.

5) No cash for big purchases: The government can put a ban on large cash purchases by putting a ceiling on the amount. For instance, any payment above Rs 50 thousand to be made through cheque, draft or card. No cash.

6) Encourage Savings: As of today TDS is deducted on bank deposits. This discourages people from investing in Fixed Deposits. If more relaxations is given in bank savings then people might take out their cash from pillows and put them in FDs. 

These were some of the suggesstions that I made on mygov.in for the Budget 2017 with the belief that some kind of positive change will be seen in the society.