(no subject)

Managing the growing deficit and the need for additional investments in Infrastructure and social development like education and healthcare, results in no other option but to increase taxes. But from where? There are untapped areas and it requires political will and administrative mechanism to manage the same. One is to tax agricultural income above a particular level, say Rs 5 lakhs per annum. The administrative difficulty is in identifying income if the sales are not through recognized Mandis. A solution could be a notional Income tax based on land holding of over a particular size to start with. The income tracking mechanism can be created in a coupe of years. The other areas are to tax beedis on par with the cigarettes for excise duty, increase duty on cigarettes and amend the concurrent list and include liquor in concurrent list and tax the same at a Central level as well. The other area more from a protectionist point of view is to impose high import duty on Chinese made consumer products which are readily available and produced in India. Corporatization of the Indian Railways and the Indian Posts will relieve the Government of direct fiscal burden. An additional 2% tax on courier and logistics companies can be used to subsidize the Indian Posts Corporation.

Krishna Ramachandran
Chartered Accountant