Finance, Forex and Investments

Is the Indian budgt the largest conceivable transfer of wealth to the wealthy and the corporate world?

In six years from 2005-06, the Government of India wrote off corporate income tax worth Rs.3,74,937 crore — more than twice the 2G fraud — in successive Union budgets. The figure has grown every single year for which data are available... The nation presently writes off over Rs.240 crore a day on average in corporate income tax. Oddly, that is also the daily average of illicit fund flows from India to foreign banks, according to a report of the Washington-based think tank, Global Financial Integrity... Pranab Mukherjee's latest budget, while writing off this gigantic sum for corporates, slashes thousands of crores from agriculture.. In fact, “within economic services, the largest cuts are to be in Agriculture and Allied Services.” Even Kapil Sibal cannot defend the revenue losses as notional. For the simple reason that each budget sums up these numbers clearly in tables.. What, for instance are some of the major items on which revenue is foregone in customs duty? Try diamonds and gold. Not quite aam aadmi or aurat items. This accounts for the largest chunk of all customs revenue foregone in the current budget. That is, for Rs.48,798 crore. Or well over half of what it takes to run a universal PDS system each year.. crores of rupees of sophisticated medical equipment imported by large corporate hospitals with almost no duty levied on it. The claim of providing 30 per cent of their beds free of charge to the poor — something that has never once happened.. Total revenue foregone on customs duty in the present budget: Rs.1,74,418 crore! Revenue foregone on account of excise duty in this budget: Rs.1,98,291 crore! Clearly more than the highest estimate of the 2G scam losses! Unlike the illicit fund flows, this plunder has a fig leaf of legality. Unlike those flows, it is not the sum of many individual crimes. It is government policy... The 2009-10 budget says, “Therefore it is necessary to reverse this trend (revenue foregone) to sustain the high tax buoyancy.” In the current budget, the paragraph is absent! This is the government that has no money for a universal PDS or even an enhanced one. That cuts anyway meagre food subsidies from the largest hungry population in the planet. That, at a time of rising prices and a great food crisis. http://www.thehindu.com/opinion/columns/sainath/article1514987.ece OK, now tell me if the suggestion of the author comparing the Spectrum scam (irregular malafide action) with the official bonanza to an elite sector at the cost of more pressing demands of primary sector etc, is wrong at all? Is not the abundant ''reliefs'' in taxes / duties to huge profit making corporates a crime of a Welfare State that India is? Pl share your views.

Public Comments

1. the government is cleverly do this things. now our government not only help the wealthy people, the whole governments are running by the business people. All our M.Ps are billionaire. Now they bring their children in the government by nominate them to Raja Saba, Loak Saba, MLAs. and at the same time they collect service tax from the poor people. our opposition parties are also join with the governments.
2. The administration policy can not be decided by you and me. There will be guidelines from World Bank and financial institutions how to conduct business and how to invest. All these journalists and writers selling themselves for a bottle of wine does not have the maturity and status to understand finance and economy. They even do not know what is a 2G. It is a non issue. The Auditors and accountants are the partners in every financial scam. The corruption starts with the accounts manipulation. How people consider their report as binding ? Are they sleeping for 3 years and one fine morning they wake up. There were histories of CAG ditching the government and got a portfolio in the opposition ministry. Customs duty is intended for protecting the domestic industry. Why you want the government to charge duty for any equipment & drugs which are not manufactured in India ? Indians are denied their fundamnetal rights to get the best of the world in the name of customs duty. Petrol was a luxury 50 years ago. Now it is essential. What right the government has to tax petroleum products ? In short, there is no need for the government to collect revenue from the people when all the profit making ventures are nationalised ? Let them close all departments which can not run with it's own income. The question of corruption will not arise.
3. I guess so. There have a large of population there.
4. You should join the Finance Ministry. It would be great service to the Nation.
5. The thing is the common man who can vote can not understand these things He must be educated towards this goal.
6. Not just in pouring bounty of ‘reliefs’ in taxes and duties, but even in collection of the lesssened tax regimes from wealthy ones and top business houses is lax, entertaining indiscriminate appeals and keeping them pending infinitely for a ‘’consideration”: The total income tax arrears in the country on April 1, 2010 stood at Rs 2,48,927 crore ! Matthias Williams says in a post on corruption in India how “unprecedented events in a country where the business and political elite were sometimes seen as above the law”! And how British Prime Minister David Cameron wrote to Singh in February warning that India's unpredictable and non-transparent business climate could derail bilateral trade ties. He also quotes Surjit Bhalla, the head of Oxus Investments, saying in a preface to a report how “..major reasons for most of the large scale corruption incidents has been due to the empowered discretion that the government has had," Do you recall the infamous revelation of Tata about hefty bribes the government demanded from players in the airlines business? So the govt would not like to tax the profiteers, nor collect the slashed taxes due as well and wallow in corruption in deals with the folk, to build their deposits in tax havens! That is the reason for the congress fans, comprising mainly the corporate sector here, support the party and praise the FM and PM who prepare the rich centric budgets!
7. A very good presentation indeed. I wish to do 'something' with my M.Com degree. And how the funds raised through disinvestment are being utilized ! Not either to create new job opportunities or to invest in infrastructure but are being utilized to make up the revenue losses .And how the revenue losses takes place,is well said by you.
8. Are you not a secular person? If yes,why you have been disturbing the secular UPA ? Support secularism [!] to strengthen the 'Hand' to support the source of Swiss money. Aam aadmi looks good in que.
9. I think the pampering of big business / industry / service institutions (hospitals /equipments..) has a dual benefit. One is, the investment intensive big business are profitable multifold than the primary sector, wherefore they hike growth figures so much as to give a per capita increast that is misleadingly higher than true! The flourishing business / industry / service organisations attract more money flow in the share markets in their favour that is also shown as a great measure of affluence of the 'country' while it is just the affluence of the players in the business and perhaps their establishments and the govt officials whom they keep in 'good humour' for continued patronage! Secondly, the obvious scope for raising party funds, to foot costly election expenses (including the high cost of rigging using professional criminals) etc! Thus both party interests and Growth magics are accomplished in the way the corporate friendly budget is prepared! GCS sir is asking you to serve as FM under the confidence that you never could bypass Radias and the business lobby to get into the Central Cabinet! LOL!