1. There are more than 1000 industrial and trade organisations, which have a profit of more than ₹1 billion. Each of these organisations may be persuaded to set up a higher secondary school, an undergraduate college or a post-graduate institution as part of their CSR activities so that the load on the government reduces and quality education becomes available to the masses.
2. Direct tax collection does not show buoyancy because two highly paid professionals, namely lawyers and doctors pay only an insignificant portion of their income as tax. A separate Tax Enforcement Wing is required to enhance direct tax collection from such sectors.
3. Income tax rates should not exceed 25 per cent, because no one wants to part more than 1/4th of his income as tax. The exemption limit should start at ₹1 million; rates of 10 per cent for income between ₹1-1.5 million; 15 per cent for income slab of ₹1.5-2 million; and, for ₹2-2.5 million the rate should be 20 per cent. Income beyond ₹2.5 million should be taxed at 25 per cent. This will enhance tax revenues and plug tax avoidance and tax evasion.
4. District Magistrates today have all the resources available but not the encouragement and support required to implement the policies and programmes of the government. Regular interaction with the 660 DMs through a workable mechanism is the need of the hour.
5. Solar power has huge potential in this country, especially in today’s context when solar power generation is being done at ₹6 per unit. With better technology, it may even come down to ₹3 per unit in the next few years. All organisations having more than 2 hectares of land must be persuaded to set up solar units especially airports, railway stations, bus depots, ports, farm houses, schools, colleges and universities. This will generate quality eco-friendly power and reduce load on coal linked power supply.
6. Railway stations are not being used to tap the large footfall they get. There is need to create a model railway station in the country, where space can be allocated to large consumer goods companies to display their products at appropriate market rent. In fact, a mini mall can be created at large stations to help railways earn extra revenue.
J K Dadoo is Joint Secretary & DGAD, Department of Commerce, Ministry of Commerce & Industry
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Effective Leadership Is The Answer
The article by Mr Tarapore on the 'Financial problems of MSMEs' is an excellent piece, a well researched one. RBI, SIDBI et al should look at the issues flagged by the author and see that the MSME sector gets better deal. As he has mentioned it is more a 'glamour' in lending to larger units than MSMEs. See the way every banker has walked in to lend to King Fisher Airlines which has left a huge NPA of over Rs.7000 crore with very little hope of recovering it from the owners. Recently, the newspaper report mentions that the CBI when approached the SBI, the consortium banker to provide certain information on KFA, the latter had refused to do so. The RBI has also not taken any forensic study to see if any complicity in financing such large units. It is sad its own representatives are on the Boards of these banks which have lent huge loans to KFA and others. It is sad to see that Mr Mallaya is happily watching the IPL matches cheer-leading his cricket team while 1000s of KFA employees are in the lurch without any pay for months on. Will RBI listen to the cries of common man?
Dr S Santhanam PhD(Eco), CAIIB General Manager (Retd), NABARD & Consultant - Development Finance Pune
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Ideas for Growth, October-December 2013
I appreciate your thoughtfulness. Manohar Parrikar, Chief Minister, Goa