Single point tax is solution to economic bane
By Bharatram Gaba
Is liberalisation only for foreign investors? What about us, Indians, 'sons of the soil', so to say? The red carpet seems to be directed only towards the "Dollar Bahus" and large-scale industry with scant regard to what is probably the largest employer in the country - small-scale industry.
Everyone looks towards China with awe, I admit, with reason. But who says we can't beat them at their own game? Set us free, that is all we ask of the government. Where is the time for a small businessman today to pay attention to productivity and quality when most of his time is spent running from pillar to post after permissions, licenses and the like?
While Custom duties are being brought down steadily, domestic industry is being taxed to death. Municipal taxes, state sales tax, central sales tax, excise, income tax, stamp duty, surcharge, professional tax, TDS...the list goes on. It is so much more easier to import an item today than to go through the nightmare of setting up a production facility.
Contrary to what the 'Maharajas' of the creamy layer of business say, we are still very much in the grip of an 'inspector raj'. History has proven that lower taxes lead to better compliance. Isn't it a joke that there are less than 70,000 people in India who pay Income tax at the highest rate?
If we were to believe the government's contention that there are only 70,000 people in this country who earn more than Rs 150,000 per year, who's fooling whom? Why not dismantle a system that serves itself more than the nation?
Can't our worthy bureaucracy be put to better use than to treat every businessman like a criminal and order scrutiny upon scrutiny until their pockets are lined? This regular harassment in the form of scrutinyies and raids is a classic case of "penny wise and pound foolish". Has it increased compliance? All it seems to have increased is paperwork, litigation and the formation of a class of professionals politely called "brokers".
The gravest of problems usually call for the simplest of solutions. Our economy is at a crossroad today. It would be simplistic, but not unreasonable for us to demand a SINGLE POINT TAX. Call it VAT, or call it what you like, it really doesn't matter - say 5 per cent maybe 10 per cent- still doesn't matter - all that matters is that it should be single point.
I challenge anyone to disprove me when I say that not only will our economy take off and unemployment decrease, but that we will get out of this curse of always having to be a fringe player in 'World Economics'. Instead of the other way around, let China start worrying about us for a change.
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