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.

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