Sunday, July 9, 2017

Taxes and Tax Regimes

Most citizens consider taxes as burden in any country. More so in India. The reason is very simple: Our taxes keep changing with every budget each year. We also have moved from several tax systems to single but difficultly layered taxation. We are told that that even after nearly half of the month since its start, many businesses - especially small, micro and medium businesses are not ready. The reason for complexity is simple: whatever we have done, we just have no clue on how to simplify things.

There are more than seven slabs, and some items that are beyond the grasp of taxation in the country, although one can count on just three types of goods and services: Essentials, Non-Essentials but useful, and Non-Essentials / Harmfuls. Bringing goods and services into simplified procedure would have benefited the most and built transparency and accountability within the tax regime. Essentials should be taxed at 2%; Useful may be taxed at 8% and Non-Essentials to be taxed at 18%. 

I feel that one of the items that must be some how taxed is the Cash Transaction per se. Since small cash transactions will continue to hold forte in country with huge rural economy and unorganized economy (e.g. most grocery stores in small towns and rural areas never give out vouchers even if their turnover is more than 50,000 each day). Since cash cannot rotate unless it is withdrawn from a bank, I would go for a straight taxation of 2% on cash withdrawals. Now the fear is, people may not like to deposit what they have withdrawn! To incentivise it, give a 1% bonus on every cash deposit. In other words, when I withdraw INR 100 from bank, I pay 2% tax to the government. So, effectively, my account is debited 102 rupees. But, when the fisherman from whom I purchased fish deposits the money with the bank he/she gets 101 rupees. 

The government must remove banking charges on electronic transactions except for amounts more than INR 5,000. This would ensure that the banks get their service cost, while the poor who use the lower amounts are not virtually discouraged from using electronic medium of transactions.

Monday, November 14, 2016

Building Hazards...

The bye-pass road of Bolpur is being widened. The road was dug up to couple of feet on one side, and then the work was stopped for months. Now it is dug again, and the works have resumed. However there is no sign where the existing road ends and the new digging starts. At least some markers and indicators must be put to show that there is a hazard just on the left of the vehicle that is driving on the left side of the road. It is not good enough to build good roads. We must also ensure that we don’t build hazards with them!

That takes me to the lane from near Kalishaher temple towards Rathindrapalli in Sriniketan, near Shantiniketan / Bolpur. Yesterday, 13 Nov, while biking on the road, a car came opposite of me. When I went to the left side of the road, I saw a deep crate that was totally unprotected and was supposed to function as drain! Some how I managed to balance myself and didn’t fall into the ditch. I am sure that this is a normal site of Bengal…and probably that of the country as a whole. Departments think within their own boxes. So, the gentleman who plans the road just doesn’t care about the drainage as that is of another department…and doesn’t even bother to put up a signage or marking or a railing to protect the travelers on the road.

These are people who build hazards, not pathways. Government’s post-completion audits must include number of hazards added after its development works are completed, and also such engineers who execute faulty plans must be punished.

Thursday, June 2, 2016

.First Fruits of Labor

The first batch of the Affirmative Action training that started after I took over in Kolkata is over. Out of the 36 who had joined initially 31 of them completed the training, and eight of them got the offer at TCS. I am proud of the eight. But it also raises some fundamental questions within me. Though nearly half of the students were tribals in the category, not a single one of them had got through! Just one tribal girl had passed the aptitude test, and had failed in the face-to-face interviews. There was one Krishna Methe. She was very confident and postured when I visited them on 20 May, and spoke rather well in English. But she had failed in the aptitude test.

Something bothers me: why are girls failing a lot in the aptitude test? What stops the tribal students from achieving more when equal opportunities are given? What has to be enhanced to give them further support. Do we need to build differentiated training into the curriculum? Do the tribal students need more hours of training or slower pace of training? Do the girls need additional hours spent in aptitude and mathematical sessions?

Or, do we need to engage different training skills for different communities and gender? Only more experiments over the coming months can say. For now, the first fruits will join TCS shortly. I am proud of them. Welcome to the corporate world, associates!

Tuesday, May 31, 2016

Joblessness to Earning: Job Seeker to Job Creator

India has taken the challenges of joblessness among the youth with greater sense of urgency. The efforts though are slow and progressive, there is a need to expand initiatives with huge participation of corporate agencies, local government bodies and civil society. There is a need to target different age groups with different educational background. The challenge would also be to build skills in limited time so that multiplier effects are seen and served. One estimate shows that there are over 8  million youth coming out of our colleges each year! Now that is a challenge.

The former President, Abdul Kalam, used to say: Our youth must become job creators, and not job seekers. Availability of easy loans and various subsidies given by government to promote job opportunities are only the starters. The main menu should have: (a) facilitating registration of all employees even in smallest business in the country; (b) a strong churn management framework to route the skills of employees churned out from various industries and utilize the same for other useful purposes; (c) roll out mega plans for building micro, small and medium enterprises that actually employ a lot more persons per revenue; (d) review education system across the country to infuse employability at various levels of education and broad base opportunities considering linguistic and ethnic diversities. For example, whether a doctor learns biology and surgery in English, Hindi or Bengali or Malayalam or any other language should little matter. These are matters that do not change because science behind it is the same. So, classification of jobs based on skills and knowledge need to be appropriately managed to ensure that literacy deprived are not socially and economically secluded.

One final point: stop all taxes and cut down the size of government. This would reduce unnecessary hassles. Simple system of "transaction tax" should be brought in except for companies and institutions which  deal in profit and loss. Transaction tax would be like: for every spending and income up to 200,000 rupees, say 1 % tax is automatically deducted at the time of receiving and at withdrawal or payment; for higher slabs increase the interest rates. So, every time one withdraws or spends, the person pays tax. This would keep the social principles of the rich pay more, while ensuring parity and transparency. But for that, we have to move faster towards plastic currency at every step. Once money is open, people won't mind spending. And spending is the essential for any growth and growth is a lot about jobs and earning.

Saturday, March 19, 2016

Global Gridlock - National Pain

In a recent speech, Bill Ford (great grandson of Henry Ford) questions what happens to the world if our cars and trucks double, triple and quadruple? With cars becoming more and more affordable, with focus on elimination of CO2 emission almost looking straight into our eyes with electric cars and improvements in technology working together, we can see a day when environment and vehicles coming closer to one another, and probably coexist in harmony.

But we are left with a greater challenge that is not getting adequate attention: the freedom of mobility! Bill Ford estimates that by 2044, when the world is expected to reach its peak population of about 9 billion, we would be having about 2 - 4 billion cars and other vehicles on earth, from today's 800 million. And most of this growth is expected to take place in the developing world!

We are heading towards a national gridlock, whereby we might be spending time in our vehicles more than at home or work. This is already visible in several major cities of the world - where adults have begun to carry mobile toilets in their cars or wear adult diapers, and carry food as one expects to remain stuck on road due to traffic jams. Remember the 100 mile long traffic jam of Beijing that took 11 days to clear? Aren't Indians spending about a week per year, just stuck in traffic jams alone, already? What a waste of our life and resources. Rapid urbanization with more and more people choosing to live in urban environment will add up to this huge maze. Will we end up with a global gridlock? 

India's motor vehicle sale per 1,000 persons is growing at a rapid rate of 18 persons adding up a car or a three or four wheeler each year. India is the sixth largest motor vehicles manufacturer in the world today. Increase in road space can never catch up with this demand and supply chain. After all, as Bill Ford says, "four billion clean cars are still four billion cars! A traffic jam with no emissions is still a traffic jam!" So, finding alternate technological and people friendly solutions are a must.

a) Integration of ticketing system, as done in several cities of the world must be implemented right from now with use of smart cards that can be punched at buses, train stations, metro rails and even rental cars.
b) Smart solutions by way of car pooling has to improve with focus on shared services.
c) Smarter cars that can talk to one another, predict a grid lock and allow one to take alternate routes for improving mobility
d) Smarter roads and parking lots that can speak to cars whereby one can book a parking lot even before you arrive to ensure that one doesn't keep travelling around to find a place.
e) Stronger laws to ensure that every housing complex comes with adequate amount of space to park as many cars as there are apartments. (A walk across places like the South Extension in New Delhi would make sense of what I am saying where vehicles are parked for days and weeks at times on the road, as most houses do not have adequate parking spaces in their own house.)
f) Mandatory following of lanes, with segregated and safe lanes for different types of vehicles
g) Work stations to come up with expected number of employees, and housing complexes within the work station area. For example, if a company comes up with a plan to engage 2,000 employees, the complex also should have place for at least 1,000 employees to live close by, within walking distance. This would greatly reduce commuting time and vehicles on the road. Companies can easily reap the benefits of it as they need not organize transport and can also charge nominal amount as rent while the staff will be available to the company even during emergencies, or say, even if there is a national gridlock of traffic jam!

Sunday, March 13, 2016

Managing Cities : Developing Outwards is better than Developing inward

Every Indian city seem to have some common woes : transportation, water supply and solid and liquid waste management are the most common, directly affecting people and their health. Services come next with affordable access to health and education being the biggest dragging points with ever increasing population. Let us take the case of transportation for our discussion.

There are three approaches to solve or reduce the problems of commuting in a city context : (a) increase road space - by widening the roads, laying new roads and flyovers; (b) reduce the number of vehicles that hit the road - essentially through levying of special taxes or by rationing of roads. This is again, an attempt to increase the space per vehicle ratio, so that vehicles can move faster than 20 km per hour speed, below which has been the bane of city transport. The third solution is through (c) improving intelligence. This is done through intelligence based signalling, technology providers linked with transport monitoring and updating suggested route and possible time of arrival in real time etc. Basically this is technology driven. The fourth generation solutions are looking at the star wars style of working to create "flying cars" and these seem to be still far away. With fear of terror strikes even at the thought of baloons and drones flying above, the chances of creating controlled corridors for such flying cars, even if technically feasible, to use of them for regular commutation seems far fetched. This leaves us with searching for transformational solutions.

The cities need to be seen differently. The cities come with an implosive nature of attraction - which means, people, services, transport et al keep increasing through high immigration and inputs, and then implode from within as the services and infrastructure can not cope with the people and demands for mobility. So, cities need to be built differently. They should be explode externally (leap frog to) to far off smaller towns. This means, cities should not be adding up, or eating up suburbs into themselves. Instead, specific growth factors should be taken out of the city to enable them to grow faster, better and with lesser strain on the cities and its populace. For example, take the case of Mumbai. The pressure on Mumbai was reduced when the focus on Pune was increased. The Expressway added to the spread and growth of Pune and the towns along the with, with lesser pressure on Mumbai - at least it gave the benefit of moving from rapid urbanization to a slower urbanization. Such satellite cities and districts need to be built with additional incentives. For example, if West Bengal need to reduce the burden on Kolkata, quality of Universities and Colleges need to be improved in other parts of the state. Say for example, Murshidabad district can have a Special Economic Zone for crap and hardware processing, Malda can have SEZ for food processing, Puruliya or Bankura can have SEZ for Researches, Burdwan and North Dinajpur can have SEZ for health etc. These kind of spreading and special incentives can have long term impact on the overall economy of the state, short term benefits of reducing migration influxes, and overall benefit of sustainable development and economic growth. Simply, it means, build satellite townships and districts across the states, and not in major cities and metropolis alone. It comes without saying that connecting each of them would cost less than managing mammoth cities.

Sunday, March 6, 2016

The Spectre

A spectre is haunting India. The spectre of "patriotism". Ultra right wing nationals and neo-liberals are at war with one another, fighting over the essence and meaning of "patriotism". In the midst of their battles are the weapons thrown at one another: freedom of speech, Constitution, devotion to country and, of course, Pakistan! The melee has been tormented by clarion call to banish those who promote "sedition", doctored tapes, arrest of students in Universities, a numb police force that lets lawyers beat of the "accused" while they are still in police custody within the court premises, and the media that is divided vertical and center.

To start with, the call to prove one's patriotism constantly seems to be challenging. Isn't it something to be taken for granted? I have been traveling a lot around in the country. Yes, once I felt I wasn't welcome in the country....and my patriotism was almost tested. An officer in Rajasthan had questioned me on the "need for Madrasis (people from South India are clubbed together!) to come and work in Rajasthan to teach them how to do risk assessment". I was angered, but I kept my cool. Had I blasted and shown my patriotic nature, probably I would not have succeeded in getting the program I was promoting. The program took off shortly thereafter, and the sail was smooth. Is Indian patriotism often chauvinistic and regional, I wonder.

The political class enjoys the troubled waters as always there is room for many to come up, shout, and hide under the filthy waters. This has been the case thereafter. Once the patriotism of students was questioned, everyone jumped into the fray. Isn't it the fact that things like these, like rumour, get thicker as they spread? So, every political party joined one side or the other. Now, one needs to measure their level of patriotism against the standards of our patriotic netas (leaders). That is a tall call. Naturally, either you are seditious or you are a right wing conservative. Now, conservatism took one step further: someone puts a price on the tongue of a student leader, and another puts up a price on the head of the young man. Well, don't laugh at the stupidity of the police: they file a case on defacing public wall (for pasting the posters), and not for the threat! No wonder, why every one fears the people with opposite ideologies. Imagine someone wants to cut off your head, and the police files a case of noise pollution!

Did I say something wrong? Err.... Lest I be charged with sedition! So, let me attach an apology with case someone in any color of dress is hurt.

Monday, July 27, 2015

Three Events, One Story: All is not well in the country

Three events in the three days of my visit to home this weekend, away from my routine works at UNICEF, make me repeat that all is not well in the country. Let me start with 23 July.

Event 1: After landing at Kolkata, I took a ticket for an Express train, and got into Kanchankanya Express that usually has few empty seats that gets filled up from Bolpur. So, if one wishes to have a reservation till Bolpur one can ask for upgrading the ticket to a reserved one. I met the Ticket Examiner and asked for such upgradation, and he checked his chart and told me to sit at Coat S7, Seat 28. I took the seat. After we had completed more than two hours of the 3 hr journey, the Ticket Examiner, asked me for 100 rupees, ticked off my ticket, and started walking. I asked him what about the confirmation note he is to give. He said, "That would cost more. But why do you need it? You are nearly at your destination." He just didn't stop. He had gone past. I never saw him again. Lesson 1: Corruption that was much less just couple of years ago in my experience at least in Indian railways is once again looking up.

Event 2: 26 July, Sunday. I went to the local market to buy some green vegetables. I purchased for 250 rupees. The bad I had carried wasn't even half full ! Unbelievable. I returned feeling, this has never happened. Cost of vegetables have never been so bad. Lesson 2: All is not good, neither for consumers nor for small vendors.

Event 3: 26 July, Sunday. At 8.00 pm I caught the Jaynagar-Howrah passenger train that was running nearly 4 hours late to travel to Kolkata from Bolpur. There were two families who were discussing among themselves about their poverty. These families were from a place called Murarai, on the Bengal - Bihar border in central part of State of West Bengal. They were terribly anguished. The first man was sharing that he had to pay 20,000 rupees as commission to get 70,000 rupees for his legally allotted house under the Indira Awaz Yojana (housing scheme of the government for poor). The second one said, his daughter lost a job as Anganwadi worker (as assistant to cook food) under the ICDS scheme, because they were asked to pay 75,000 rupees in advance as cash to guarantee the job. Which they could not. And the job went to someone who could afford to pay up. I joined in to ask, "Why, wasn't the corruption has always been there?". They said, "When the communists were ruling at least the poor wouldn't be asked to cough up, or would be let off with a request for a small donation to the party. But now, it is very straight: either you pay up or make way for one who can afford.". Lesson 3: There is a need to fight corruption at every level by every ministry and person.

Friday, July 3, 2015

Life in Delhi

My life in Delhi has got into a clear routine now. I wake up at 5.00 am on most of the days, and at times if I am too tired wake up at 6.00. After a wash I work till 7.00 am by checking the mails and updates on social media. I have bath at 7.00, get ready for office and by 7.45 I am on road. I reach UNICEF Country Office by 8.00 am. I have my breakfast at the canteen and I'm on my desk at 8.30. Till noon it is work....meetings....discussions....At about 1.00 pm we walk down for lunch, usually a few minutes early to avoid the rush. Back to desk in about 40 minutes. Work continues. At about 2.30 often I feel so sleepy that I doze off on chair at times. In case I doze off it is for about 15 minutes. And then work continues till 6.45 pm. I wind up, and am out on street to return to the guest house where I stay. On reaching I have a bath and begin to relax by watching some comedy channel and news channels alternately. Sharp 8.30 pm I rush around the corner to a restaurant for dinner. My favorite at this restaurant is "baigan bhartha". Usually it is a full meal, which means 2 chappatis, a little rice, dal, and two vegetables. I tried non-veg at this restaurant, but was not too happy with the quality, and so I have settled down for occasional omlette or scrambled eggs. Back to room before 9.00 pm to catch up on talk shows on television. At times the laptop is once again switched on for some more work. Usually the day ends with a long telecon with Shubhra at about 11.00 pm. 

Though there may be some minor variations on different days, the regularity has given me confidence to work. At the atmosphere at the office is great as I am slowly getting to know more and more colleagues. Just one regret: being an operations person who was always found among people on field, the centrally air conditioned office that has a whole lot of facilities still looks like a cage at times. The satisfaction comes from the fact that my interventions go a long way to influence policies, programs and millions of lives positively.

Friday, June 5, 2015

An Issue that troubles NGOs in Nepal

International Non Profit Organizations, specially those well meaning ones from India are facing troubles because Indian government is restricting carrying of materials or money to India for relief and rehabilitation purposes. Technically taking money or materials to another country are supposed to pay customs duty to the government. Considering that the operations in Nepal need high amount of money, taking hard cash, which in any case is restricted, is a bad way to follow. Further it can call for legal action. Transferring money to an account in Nepal without the permission of Reserve Bank of India can be construed as money laundering! As the initial special permissions for taking more cash and materials with easy permissions without paying Customs Duty is coming to a close, NGOs are beginning to feel the pinch. 

As for Nepal, all NGOs from India or any other country, shall be treated as International NGOs. The International NGOs are required to be registered with the Social Welfare Council. Read Rules here.  Section 20 under the rules are very important for INGOs. 

There are four important steps:
a) Register with the Social Welfare Council (SWC) which is under the Ministry of Women, Children and Social Welfare. (There is a need to coordinate with this Council on the part of INGOs, and support them where necessary so that all INGOs are registered properly.)
b) INGOs must open an account at any authorized Commercial Bank one single central account into which it can receive all its foreign funds, and it can open sub-accounts to use the money if required. Once in every four months, the INGO must submit a report of receipts to the SWC. 
c) If an INGO is supporting an NGO, such NGO also must be registered with the SWC. That NGO must have different accounts for different projects. The selected NGO is preferred to be a Nepali NGO.
d) Every year, at the end of financial year, the agency must inform the Auditor General in approved format of the closing of accounts, and the Auditor General shall appoint auditors to audit the accounts.

At this moment, the most important thing is for INGOs to register with the SWC, start a central bank account, and if needed sub-accounts linked to the central bank account for spending purposes. Donor money from any country should be directly sent to the account in Nepal. Do not route the money through India, as the money is not meant to be used in India. Any money sent from India needs the approval of the Government of India. (Latest heard is that Indian Government is asking NGOs to put the money in the Prime Minister's Relief Fund to showcase works in Nepal as activities of the Indian Government, and contribution of the people of India.)