It refers to high-level press-conference held on 23.08.2019 by Union Finance Minister (FM) with all the secretary-level officers joining her to reply to questions by media-persons. FM announced many measures in a bid to remove fear-psychology developed amongst tax-payers by withdrawing criminal action for normal tax-related violations.
But too much attention was given to auto-industry by reducing interest on car-loans, doubling depreciation to 30-percent and announcing large-scale purchase of new cars for government departments and ministries to replace old ones. Huge purchase of new cars by government will heavily burden public-exchequers leading to tax-burden or deficit-economy both of which will result in price-increase. Even if new cars are to be purchased for governments, rule should be that these must be economy cars with maximum ex-showroom price of say rupees 10 lakhs.
But boost in economy can only be there if drastic steps are taken to boost real-estate being third biggest sector in Indian economy with 13.5-percent share and textile placed at tenth place with 4-percent share but having maximum work-force involved. Notably auto-industry given extra-ordinary boost is not placed amongst first ten sectors contributing to Indian economy. Capital-gain on properties should be reduced to ten-percent and registration-fees uniformly in all states at just two-percent for boosting real-estate. Such drastic reduction will tend to reduce element of black money in real-estate though ultimately resulting in extra revenue-earning.
Much-awaited Elephant-Bonds for a permanent Voluntary Disclosure Scheme together with compulsory deposit of all 2000-rupee notes in banks can provide huge flow of blocked unaccounted money in circulation without least affecting common persons.
Both real-estate and textiles can be exempted from GST like before on experimental basis. Adopting two tier system of ten and thirty percent GST replacing multiple rates of 0, 3, 5, 12, 18 and 28 percent together with abolishing corruption-generating Input-Tax-Credit ITC system from manufacturing and service sector can provide much more revenue through GST in simplified and user-friendly manner. Cess may be replaced by additional slabs in multiples of 50-percent.
SUBHASH CHANDRA AGRAWAL