Monday, July 4, 2011

Improving Transparency

One way to improve transparency and reducing black money is to start with smaller things in life--like moderating vegetable and fish markets and regulating rickshaws. Each smaller thing also requires customized solutions.

Let us look at the case of the vegetable and fish markets in our towns and villages. Now, these shops do not give any bills, and the deals made are in smaller amounts. So, what we need to do is to promote billing. But a small vendor may be uneducated and in the rush of things may not have time to write a bill. So, the simpler thing is to have pre-paid bills of rupees 2, 5, 10 & 20. Each of these bills may be commonly printed and purchased by these vendors at a cheaper price, and each of these tickets / bills might cost just 10 paise (a miniscule fraction: i.e. 1/10 of a rupee; and as of today, 1 USD = 45 rupees). So, this would be a small but steady tax flowing into the government's coffers, while the government is able to track which vendor is actually selling how much of products. Customers must be encouraged to ask for these tickets along with their purchase, and in any case the vendor adds the small cost in his/her product. An alternative would be, like in the sale of matchboxes & cinema tickets in which a small logo tag from the Excise Department is added, the bills also may contain such a tag. In the case of rickshaws too we can do similar exercise.

Every taxi driver has a turn over of not less than 600 rupees a day, because that is their break-even point. Imagine that big cities have not less than 1000 taxis. The minimum turnover without any accountability is: 600,000 each day. The taxi meters all must be fixed with a prepaid gadget. Accordingly, the driver and the passenger must be able to see in the digital meter: the distance covered in the trip and the minimum fare only. At the end of the journey the actual bill may be only through the print out with a printer fixed on the meter. Now comes the most important point. The prepaid gadget for which the driver has purchased credits will automatically lose some credits for each trip. It is more like a prepaid voucher in a cell phone. Let me explain: Driver X purchases 100 rupee credit and recharges his system. Then, at the end of the trip, the bill comes out with the details: The vehicle number; Distance traveled : 3 km; and Cost : Rupees 30. A tax of 1 percent, i.e. 0.30 paise is deducted from the prepaid credit, and the driver has a balance of Rs. 99.70 in his account. When the balance goes below 5 rupees, at the beginning of each trip the system gives a warning, and if the balance goes negative, the system refuses to switch on itself with a warning message for recharging.

We will soon notice that most road taxes can be reduced if such innovative and compulsory taxing systems are followed with minimum burden on any service provider or customer.

Saturday, July 2, 2011

Transparent Communities, Transparent Government

There is so much of discussion continuing, and people planning go on fast if the anti corruption bill, known as the Lokpal Bill is not stringent enough, and if it is not passed by the parliament. I have some primary questions to be raised before we plan to stop millions being swindled. The patrons of anti-black money and anti-corruption bill need to pay attention to this.

Let us take simple two examples of two small towns in India: Raiganj, the place I worked for over 6 years; it has a population of about 150,000, and Bolpur - Santiniketan, the place of the national poet Rabindranath Tagore, and the eminent economist Amartya Sen--both Nobel laureates. The town has a population of over 250,000. Let us look at the vegetable market and the rickshaw pullers of these two towns as an example. The vegetable market in Bolpur must be having a minimum turn over of not less than 50,000 rupees a day, and Raiganj would have about 50,000 as well, because it has a bigger wholesale marketing system as well, being closer to lots of villages cultivating vegetables. So, on any given day these two towns alone have a turn over of not less than 100,000 rupees. And, believe me, never has any one asked for a bill from any of the vendor, whether it was a purchase for 10 rupees or for 1000 rupees. The maximum you would get from a bigger shop would be a small piece of paper with a scribble of the amount on it. Let us say, in a year only for 300 days these markets are open. These two towns alone make a turn over of 30 million rupees (3 crores) in royal black. Now, count the number of towns and cities in India-- you would never end up counting the the amount that goes unaccounted.

Let us look at the rickshaw pullers in these two towns. Raiganj has about 150 rickshaws on an average on road, and Bolpur has about 250 on road on any given day. Any rickshaw puller would agree that on an average they make not less than 100 rupees a day. So, 400 rickshaws x 100 rupees is equal to 40,000 a day, and 330 days of rickshaws running in a year would result in 13.3 million rupees changing hands in black. Well, no one asks a rickshaw puller to issue tickets or bills.

I have taken two raw examples, leaving aside the bigger ones to show how we promote black money at every level. This money has to be spent. Black begets more black. And that is the father of larger corruption. (Mother is the human crave for more!)

So, we must have simpler solutions. I shall explain some of them in my next blog.