If swadeshi economics has to be implemented, then what about the existing growth that has evolved due to globalisation, for example outsourcing in Information Technology (IT), Call center jobs, Medical transcription, etc. The boom of outsourcing is eliminating the unemployment problem in our country to some extent.
Nobody can deny the fact that the quality of life among most classes of people have improved drastically after the boom of IT. Domestic consumption has increased greatly because of IT pros. The families of IT pros benefit from their salries, which in turn improve the domestic consumtion in the place where they live. The growth of many IT companies indirectly creates employent opportunities for huge number of construction workers, with good pay, which has improved their quality of life. There are indirectly large number of employment opportunities in cities with IT companies, like autos, textiles, restaurans, etc.
The boom of IT has created literacy awareness among some percentage of people, which otherwise would have been achieved after 2 decades or so.
Not only that, now many educated younger generation choose MBA/business, that was not seen few years ago. This is a good sign many international entreprenuers like Lakshi Mittal are evolving, who can potray the business face of India.
We're getting paid in dollars for outsourcing, but if this should be replaced, then most of Indian business, Indian economy will come to a halt and a new economic crisis w
Hi Venkatesh, Your article is a logically appealing, long term growth prescription for a country like India.However, you seem to suggest a trade off between global and swadshi economics. Can't they coexist, with a prudent balance between the two? Just as we can't afford to be over dependent on export led growth, we can't be cowed down by stagnant, if not lethargic, domestic demand, fuelled by myopic govt. policies, run chiefly by poiticians with the only priority to sefeguard themselves. Fortunately, although our economy started getting slowly integrated with the global economy more by default than by any proactive govt policy, we had the resilience to sustain the growth model so far, thanks to our immense inherent strength of knowledge capital. Imagine, my friend, where would our IT & ITES industry be, if we had not followed the global path.IT & ITES have surely raised the bar on quality of life and made a huge difference to the huge middle class educated base, which has in turn driven domestic consumption to unimaginable levels. So, my prescription is, enjoy the best of both worlds through a prudent balancing act !!
China is already pursuing such a two-track policy with great success: she has been able to corner the export market with low-cost products built with slave labor at govt-owned factories in order to build up a huge forex war-chest to further her global ambitions; and two, encouraging domestic consumption - not only is China's GDP five times larger than India's, but her per capita income is almost six time that of India's, allowing for greater levels of domestic consumption of not just locally produced cheap goods,but even imported ones. India is still stuck in her socialist past with high taxes on consumer goods, which only serves to further retard the growth of the doemstic consumer market. With the luddite socialist idiots running this poor land, the chances of any mass-consumer economy emerging anytime soon seems rather dim.
Our Union Budget is financed on loaning more than 50%. We have no increase in food products since 1990. We pay more than 50% of our budget in interest service of our past debts. We have no more than 10% of our budget for developmental activities. We must carefully read the receipts and expenditure in our budget. We are really already insolvent. Now, We are to hear very soon the trend of departing the KPO and BPO from India. What will happen to our 'RANGROOTS' getting training in so called IITs and IIMs. Let us take care now for the future. We have already lost the science and researchers stream to idiot computer.
To solve all this problem just do one thing avoid black money by using two methods one all gold should be made government property as in usa and goverment can give bonds in return for gold surrenderd second land should be based on use that is if it is agricultural land it should be used for that purpose and it is industries it should be used for that purpose within the time frame otherwise it goes back to the government this avoids black money saved in gold and land thus ensuring availability of cheap capatial
It is too preposterous to suggest that India will move towards Swadeshi economics delinking itself from global economics. We may cry ourselves on Swadeshi dream, but its something that will never return. Indian consumer doesn't want the horror of riding a Fiat Padimini, watch Beltek Television, Allwyn Refrigerator, stand in long queues of State Bank of India, bear with patience the whims and fancies of Telephone department, wear Bata shoes etc, etc, --all due to the governmental policy of 'selective capitalist enterprise'. Let us stop day dreaming and make the country move forward.
The article talking highly of growth and "Swadeshi economics". Our dear Finance Minister will never reduce taxes,he will only increase them. Petrol/Disel are expensive due to heavy taxation. reduce them and it will have a positive effect the entire economy.
The present government is just interested in increasing security cover for themselves and travelling in fancy cars and study trips!
RE:what abt super high taxes in india ???
by Pen on Aug 07, 2007 07:55 PM Permalink
For a mere million the politicians are making a loss of billions for the Indians. Look at worli sea link or any big project. Delay Delay n People will pay the cost of mounting cost.bcause of them we all are suffering. Until Transparent systems are not there we are doomed for creating the same mistakes again and again and again.
RE:what abt super high taxes in india ???
by Vitthal Nilwarn on Aug 07, 2007 07:02 PM Permalink
Girish,I strongly agreee to your opinion. Now,we have to act accordingly. We have to involve in the process. We shouldn't just say the same.
RE:what abt super high taxes in india ???
by Arun BR on Aug 07, 2007 07:21 PM Permalink
Hi Girish
Note that our politicians are paid very poorly!!
just think a person who has the power of changing the future of the nations just gets salary of 40,000 per month which is very poor he has to take decsions on where he has to sanction few thousands crores of money definitly greed always comes , moreover he has to move always with high profile people for that standard of living how will he be able to afford it. This is the root cause of problems every where.
Think of singapore why corruption is so less because goverenment servant work is valued a lot and they are paid appropriately based on the skill and talent.
RE:what abt super high taxes in india ???
by prashant sinha on Aug 07, 2007 09:11 PM Permalink
Its not just the salary that these politicians get. The annual cost incurred in having one MP runs into a minimum of Rs 1 crore. This includes the prime area posh bunglow, thousands of free telephone calls, 30 free air flights, equal or more number of first class rail tickets, security and list can just keep going on. Even at a Rs 40000/- per month salary, any regular human being can afford to buy a small two bedroom flat, a four wheeler, education for their kid while paying EMI's just like many of us. It's the choice that one needs to make over gree versus need.
RE:what abt super high taxes in india ???
by Abhay T on Aug 07, 2007 08:09 PM Permalink
Your comment about corruption is correct, but you can't kick economy by reducing taxes. The point is not about less or more tax either. Only few % of people in India pay tax. Most people are still poor and live under poverty line. Many businessmen and high earners don't pay tax priavtely arguing it only ends up in politician's pockets (similar to yours). So, finally the tax comes only from salaried people who don't have any choice. High % of tax is only a perception because we don't see development. This is only a small fraction of India's population. A part money indeed goes into corrupt politican's pocket and their expenses. But, most part of the money is also used for defence, other govt. expenses, development projects like dams, roads, education and research grants. It is simply not sufficient for a country of India's size and population. For this we need a strategy for a) creating new jobs. So more people can pay tax. b) Force high earning members to pay tax. If they don't pay tax they should named and shamed publicly ( not violently) and cancel their license of whatever profession they may have. c) Wisely use revenue in massive development projects.
Morality and corruption are always going to be an issue. You can't solve that in one night. But once more jobs are created and people's earnings start going up the corruption level will automatically come down. This social change requires at least 50-100 years, because of wide gaps in our culture.
The article is very good but your comment about income tax is completely wrong. India has one of the lowest taxes in the world. In China, VAT is 17% and your income tax may range from 5 to 45% depending on what you earn. Corporate tax is 25%. Until recently this was 33% for domestic companies and 15-24% for foreign companies. No wonder they attracted huge foreign investment. Internal demand is created by huge development projects taken by Chinese government which is funded from this taxes. In many developed countries income taxes are about 40% and you also pay 17.5% VAT. The main problem in India is only a small fraction of people pay tax and most high earners completely avoid paying tax. This is a matter of moral corruption. On one side the argument is why pay tax when all politicians are corrupt and the money is not used for development. Nobody wants to pay tax to Govt, but they have very high expectations form the Govt. The fact is Govt. doesn't have enough revenue to address many issues like Health, Quality Education, water, Sofficient power supply, development, flood defences, rescue operations, new railway/road networks, airports and other rural development. These long term solutions require hundreds of billions of dollars and that will definately kick in internal demand to sustain economy. But most importantly we need a strongly motivated people working everywhere from government offices to research centers.
RE:Good article
by ANAND on Aug 07, 2007 06:34 PM Permalink
Govt Have sufficient money for developements but a big part of that money goes to pocket of currupt people like all leader and govt employees
RE:RE:Good article
by Abhay T on Aug 07, 2007 06:56 PM Permalink
This is actually not true. There is a huge gap between revenue and expenditure. Although you can cut down ministrial costs, it is still massive gap. You haven't thought about massive projects India need. A single city requires 10s of blillions of dollars to improve quality of life.
It is true that politicans are corrupt and earn commission before offering contracts. But, this is true in every country. You belive it or not but even in US, Japan and China high profile cases have happened. But, in India, even a peon in a govt office is corrupt. So, it affects everyone. I have seen some politicians coming from very poor background becoming MLAs and suddenly become rich. This mainly happens because overall moral level in India is very low. Even very honest person is sometimes vulnerable if brainwashed. If 95% officers in a govt. office are non-corrupt then even a minister can't do much. So, in developed countries although corruption happen at higher level, it doesn't reflect in the quality of roads. So, people reamin unaffected. In india, 1% of honest officers have to work with 99% corrupt officers. This is because of very low moral levels. My point is you can reduce tax, but that is not long term solution.
RE:Good article
by Nanda Kumar on Aug 07, 2007 07:32 PM Permalink
Tax is too high in India . Specially after P.Chidhambaram.
When UK/US/Australia; even if you pay more tax; govt is again spending on people; Most of the people get govt aid; if they are unemployed.
I have to pay so much of tax without me or my fellow citizens getting benefitted; I say, this kind of tax is looting the people(monthly salary category).
No way I find acceptable, the tax I pay every month.
Let govt take care its subject rather playing cheap tricks like bringing service tax in every aspect of livilihood
RE:Good article
by Abhay T on Aug 07, 2007 07:56 PM Permalink
The point is not about less or more tax. Only few % of people in India pay tax. Most people are still poor and live under poverty line. Many businessmen and high earners don't pay tax priavtely arguing it only ends up in politician's pockets (similar to yours). So, finally the tax comes only from salaried people who don't have any choice. High % of tax is only a perception because we don't see development. This is only a small fraction of India's population. A part money indeed goes into corrupt politican's pocket and their expenses. But, most part of the money is also used for defence, other govt. expenses, development projects like dams, roads, education and research grants. It is simply not sufficient for a country of India's size and population. Morality and corruption are always going to be an issue. You can't solve that in one night. But once more jobs are created and people's earnings start going up the corruption level will automatically come down. This social change requires at least 50-100 years, because of wide gaps in our culture.
RE:Good article
by Abhay T on Aug 07, 2007 06:40 PM Permalink
Thc conclusion is you can't kick internal ecoonomy by reducing income taxes. This is only a popularist statement. You can only create internal sustained growth by 1. Creating new jobs through massive big projects, such as constuction of new roads, power stations, bridges, rail networks etc. 2. Getting more people to pay tax. Use name and shame policy for high earner who don't pay tax. 3. Using increased revenue wisely. 4. Corruption is in minds. A young, motivated, non-corrupt generation is required in all govt. offices. A charishmatic leader is required who can make this change happen in the mindset of people.
