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Indian Economy News & Discussion - Aug 26 2015

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A_Gupta
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Re: Indian Economy News & Discussion - Aug 26 2015

Postby A_Gupta » 01 Feb 2017 17:56

Swarajyamag has this:
Tenth, no shocks, no bad ideas. Perhaps the biggest plus of this budget is that it brought no negative shocks. And no bad ideas like farm loan waivers. Hence the massive relief rally on Dalal Street. The bulls are happy they didn't get whipped.‎ And the economists are relieved that foolish ideas have been given the go-by.


https://swarajyamag.com/economy/the-10- ... rth-budget

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Re: prasannasimha

Postby Karan M » 01 Feb 2017 18:09

prasannasimha wrote:I have seen one thing. All politicians give sops on the year of elections.like road tarring on election year! So I really did not expect a major change. Having said that the IT limit is increased to 3 Lakshmi and a 12500 decrease in tax till 5 Lakhs. I think ge demonitization gain will be rewarded in 2018-19. Having said that the salaried classare not significant voters bit largest contributors to income tax


Jetli is firmly of the let rhem eat cake mindset. On TV show just now, he said he is not too bothered about those who earn 10L, 20L etc because they can figure out how to best pay tax and know the game etc. Our PM is a sadhu. Our FM is worth tens of crores. Neither really understands what it is to live with middle class expenses and needs. In a country with zero public safety net, and almost everything out of pocket.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nirav » 01 Feb 2017 18:15

It's only those "middle class" fellows who have upper class "needs" have trouble coping.

For the majority, there always exists a fine balance between income,expenses and needs.

I'm not really sure what exactly do the guys who champion sops for "middle class" actually want from the govt.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby rahulm » 01 Feb 2017 19:14

I think the 3L limit is meaningless. It would have been useful if it was 3L in a time period. (3L per month would make it 36l/year).

With cash withdrawal limits on current and overdraft accounts abolished, one can withdraw unlimited cash amounts. Unless, I am missing something.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Schmidt » 01 Feb 2017 19:17

I think all major ministries must present a status update similar to the budget after the budget presentation

For eg Suresh Prabhu can make a 1-2 hour presentation + press conference , taking off from the Budget allocations on issues specific to the Railways

And similarly , other ministries - Infra , Education , Foreign Trade and Investments , Telecom etc

This would also highlight the achievements of various departments and keep them on their toes

I think some of the lesser departments like Tourism , Food Processing are crucial in job creation and there should be relentless focus on these also

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Kashi » 01 Feb 2017 19:19

^^ Your idea has merit Schmidt saar, have you posted this to mygov.in?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vina » 01 Feb 2017 19:33

A_Gupta wrote:Swarajyamag has this:
Tenth, no shocks, no bad ideas. Perhaps the biggest plus of this budget is that it brought no negative shocks. And no bad ideas like farm loan waivers. Hence the massive relief rally on Dalal Street. The bulls are happy they didn't get whipped.‎ And the economists are relieved that foolish ideas have been given the go-by.


https://swarajyamag.com/economy/the-10- ... rth-budget


Yes. Absolutely. Sums it up perfectly. It was a ho-hum pedestrian budget, the positives are 1) No hare brained tax ideas and 2) Fiscal discipline was maintained. The market had such trepidation going into this that the implied volatility of the options were pretty steep (it still is , but will fall going forward due to time decay and also with the information out, the information asymmetry risk is gone).

That was basically enough for the bulls to heave a sigh of relief and the shorts covered leading to the after result bounce (the market rose from exactly the minute Jaitley said Thank You). Personally, we made approx 0.5% today and another approx 0.4% will come in as the options decay . We would have made a similar amount even more if the market had dropped 2% instead , so all in all a pretty decent day.

With that said, the rest of the budget was plainly a wash and was of no consequence. In fact I cant believe the kind of things the budget covered (like Bio Kakkkose in all trains by 20XX blahh) and some random minutiae that are best left to the respective govt dept's documents and plans, sounded like a "state of union address", best left fleshed out in Modi's "Mann ki Bath" address (I personally prefer Bisibele Bath).

Most disappointing, there were absolutely NO structural reforms, NO driving efficiency of capital, but some mangled version of the command and control and "statism" of old doubled down. I wonder which Govt would actually have the cojones to take the chainsaw to Air Perpetual Parasite and BSNL and put them out of their misery that would drastically cut waste and liberate vast amounts of capital. Vajpayee didnt ( Shourie was all set and would have done it , thus saving Rs 46000 crore Air Parasite has run up , KingFisher would still be alive and kicking, SBI and others woudnt be in the hock for Rs 6000cr, BSNL wouldnt be showing losses of Rs 15000 cr) etc..

Oh, SHQ was hit with a 10% surcharge (she was just under the 15% surcharge by a whisker).. "Huh Schmuck Adhya" the Revenue Secretary was on TV and was justifying it as saying they are rich and that a 3% on 50L was.... and he couldn't do the math mentally (it is Rs 1.5L) and covered it by saying it was a "small sum" which they can pay.. (SHQ is looking at an additional tax of close to Rs 6L if I go by the Huh Schmuch math of an extra 3% tax) .. Anyways..such is life.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby hanumadu » 01 Feb 2017 19:43

rahulm wrote:I think the 3L limit is meaningless. It would have been useful if it was 3L in a time period. (3L per month would make it 36l/year).

With cash withdrawal limits on current and overdraft accounts abolished, one can withdraw unlimited cash amounts. Unless, I am missing something.


Its 3 lakhs per transaction. If somebody buys land for 15 lakhs, he cannot split the payment into 5 payments of 3 lakh each.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nirav » 01 Feb 2017 19:59

Options IVs are always on the high side pre any budget.
Heck, they are high even pre RBI policy days.

To say that market had such trepidation that the IVs rose "steeply" is plain ridiculous.
But it's consistent with half knowledge yet I know it all attitude.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Karan M » 01 Feb 2017 21:35

nirav, please take your pomposity elsewhere.

all this fine balance stuff is horseshit.

there is no Social security or medicaid in india to take care of the average taxpayers essential needs. thats the basic truth which this and most other Govts hasnt addressed. section 80 dd, ddb et al remain insufficient.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nirav » 01 Feb 2017 21:38

Haha.

You sir aren't the spokesperson for the fabled middle class of India.

I'm middle class, and I reject your assertions forcefully.
Block me if you have trouble with what I write but please do not tell me to not express what I think.
If I'm over the line, the mods will tell me and I'll adjust. ;)

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Karan M » 01 Feb 2017 22:14

you are the one pretending to speak for the middle class. and acting all snooty when other folks critique flawed policies.

clearly, you have no idea what the term middle class even means.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nirav » 01 Feb 2017 22:40

I've crapped in common toilets, balti and all.
I very well know what's what @ middle class and lower class.

But anyway since you spoke numbers let's talk about that ?

What are the "middle class" expenses that a guy in 10-20L bracket can't meet ?
What's that balderdash about the PM being a sadhu and stuff ?

In my view a person making 20L and still crying about a "safety net" by the goberment deserves the tears.
I can understand your angst if you or your family member are personally going through an illness that necessitates 80dd but that's no reason to blast the govt.

I didn't even utilise the exemption for my aunt's cancer treatment.

We both know treatments can go from almost free into lakhs of rupees.in certain cases expenses could very well be higher than annual income.but I'm sure you can appreciate that exemptions cannot be given out to the full extent of medical expenses.

If I'm missing out on any crucial "middle class" needs and expenses for a guy making 10-20L per annum, do tell.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Karan M » 01 Feb 2017 22:42

theres no point since you dont even understand the depth of the issue. for your sake, i hope you dont either though only somebody crass would wish others ill and state they deserve anything irrespective of what they earn.

the lack of maturity in your post speaks volumes. the govt needs to do more for peoples medical expenses and thats a fact. peoples lives matter, and not everybody is some well heeled politician.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Prasad » 01 Feb 2017 22:53

It is also about fairness. A salaried person with a 10l income and 1 kid in a metro is going to find it tough. No pension and all like previous generation.

Did anyone catch what the allocation, amount of focus on education, health and push for R&D was in this budget? I saw minority affairs getting a big jump (Talk about idiotic priorities). I have to reiterate. Without freeing up and massively overhaulling our edu, we're phucked. Javdekar and Smiti Irani have both been utterly terrible at HRD.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nirav » 01 Feb 2017 23:04

Karan M wrote:theres no point since you dont even understand the depth of the issue. for your sake, i hope you dont either though only somebody crass would wish others ill and state they deserve anything irrespective of what they earn.

the lack of maturity in your post speaks volumes. the govt needs to do more for peoples medical expenses and thats a fact. peoples lives matter, and not everybody is some well heeled politician.


I'd like to clarify, what I meant is the person cribbing after making 20L per annum deserves the tears caused by the cribbing.
It was in no way directed at you or the medical expenses you face.

My friend was interning in Bhagwati hospital during his MBBS.
The amount of people he's seen dying for the want of money for medicines as low as a 1000 rupees is a gut wrenching thing.
In light of that situation for the poor, I'm conditioned for "middle class" people,10-20L range wanting more from the govt,to view them unfavourably.

We majla class are so cocooned, we fail to see the plight of people who can't even afford municipal hospitals.

I agree govt spending can use a hike, but it's for the poor people first.
Decent financial planning can go a long way for guys in the 10-20L bracket.Dont need govt handouts.

I apologize for any miscommunication from my end.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby AdityaM » 01 Feb 2017 23:12

amit wrote:
AdityaM wrote:No transaction over Rs. 3 lakh will be allowed in cash, says Arun Jaitley

How can this be enforced?


Unless you have Rs 3 lakh in black money, you'll have to withdraw it from the bank and once you complete the transaction, say you pay me Rs3 lakh for whatever reason, I'd have to deposit the amount in the bank. In effect if the transaction is in white, it can be tracked very well. Consider this to be a follow up step to demonetisation. Wouldn't have been possible otherwise.


No more seizures of hoarded new currency are happening. By now many people would have amassed 3 lakhs in cash with no intention of declaring.

Nothing stops a Halwai/Dhaba owner with cash paying a jeweller in cash and under invoicing. Who will enforce?

This may stop white declared money based transactions. But doesn't stop the black parallel economy.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby A_Gupta » 01 Feb 2017 23:28

More on the PMI:
http://in.reuters.com/article/india-man ... NKCN0VA1FE
The Nikkei Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, jumped to a four-month high of 51.1 in January after slumping to a 28-month low of 49.1 in December. The 50-mark demarcates contraction from expansion.
...
The new export orders sub-index rose to 52.5 from 51.5, the highest reading in five months, which coupled with a similar increase in domestic orders suggest renewed demand for Indian goods both home and abroad.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby achoudhury » 02 Feb 2017 00:22

This was a solid budget. No fireworks, but solid, all encompassing budget with focus on Jobs and maintaining growth trajectory. Here are my first takes:

1. Policy element is slowly but surely being taken out from budget and budget is being made out to be what it ought to be i.e. Projected Financial allocation for GoI's policy implementation. This takes sexiness and talking point ideas out of budget but rather correctly focuses on resource allocation.
2. Budget will generate low skilled/semi skilled/neo middles class type jobs. Record outlay on Infra, Agri and Rural Eco, Quantum increase in Mudra outlay and coupled with Tax rate cut for MSME with already announced package for Textile covers the five most employment intensive area.
3. GoI knows that with current factor market laws and current structural edifice, India can not be propelled in 10+ growth rate club. So it is doing what it can i.e maintain the growth trajectory of 7-8% by increasing capital spending, consumer demand stimulation ( tax cuts, OROP, Last Pay Commission), squeezing efficiency thru Digitisation, etc. and hoping for an export uptick as well.
4. Intention of Inflation targeting by remaining on Fiscal Consolidation path is much more believable now. This year, GoI had all the alibi to junk it but it did not. Commendable. Augurs well for both Interest rate regime as well as political dividend from price stability.

What it lacks :
1. There is no clear forward path on the Twin Deficit problem of stressed corporate balance sheet and Bank NPAs, which is the biggest impediment to kickstart Private Investment. Something needs to be done as higher spend on Infra ( Ports, Highways, Waterways) and core industries like Power and Steel can not be just supported by GoI. 60 B outlay is not enough for Infra. Eco Survey does give policy formulation on this. Hopefully NaMo will do it.

2. No major Social Sector spending increase. But I think, NaMo is keeping some powder dry for next two budgets keeping 2019 in mind.
3. Bringing down Corporate tax and removing exemptions

There are lot of other signalling as well but I guess that is more suitable for Politial thread.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Karan M » 02 Feb 2017 01:01

nirav wrote:I'd like to clarify, what I meant is the person cribbing after making 20L per annum deserves the tears caused by the cribbing.


wow. this is bizarre.

It was in no way directed at you or the medical expenses you face.

My friend was interning in Bhagwati hospital during his MBBS.
The amount of people he's seen dying for the want of money for medicines as low as a 1000 rupees is a gut wrenching thing.
In light of that situation for the poor, I'm conditioned for "middle class" people,10-20L range wanting more from the govt,to view them unfavourably.


again missing the point entirely. who asked for a govt handout? i merely mentioned the Govt double dips into people's expenses even when they cannot afford essential needs, in a country which has zero social safety net.

this is as relevant to one who is notionally rich or one who is poor. both should be excluded.

the current deductions are pathetic & don't account for a fraction of what the actual expenses are. a parasitical Govt is no Govt of the people at all.

We majla class are so cocooned, we fail to see the plight of people who can't even afford municipal hospitals


what is this "we"? why assume what others see and fail to see?

a few minutes back you went nuts because i merely suggested this govt has not done enough about medical expenses. did anyone mention that people who are being treated in municipal hospitals or anyone there is to be excluded?

any policy made has to include everyone. be as thorough as possible about ensuring the reasons are valid and legitimate.

but FFS dont go on national TV, face softballed questions as the FM and preen about how great your budget was, how it meets all needs and then on top of it claim, merely because people earn "X" whatever that X is, they can fend for themselves.

it was rampant, narcissistic rubbish.

I agree govt spending can use a hike, but it's for the poor people first.


govt need not spend. it need not take. people of any social strata facing medical or significant expenses should get more leeway. its that straightforward.

Decent financial planning can go a long way for guys in the 10-20L bracket.Dont need govt handouts.


again with the assumptions. no amount of "financial planning" can accommodate the kind of expenses that india's current society expects as de-jure.

I apologize for any miscommunication from my end.


rather than apologize, kindly tone down on the gratuitous attitude towards strangers you barely know and who voted for this govt as well, and have supported it through thick and thin.

when they say something, think why they may have a point instead of judging them with gratuitous swipes about how they just want to live luxurious lives.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Karan M » 02 Feb 2017 01:13

Prasad wrote:It is also about fairness. A salaried person with a 10l income and 1 kid in a metro is going to find it tough. No pension and all like previous generation.


exactly. there are so many people i know who are facing such horrible situations which no amount of "planning" or fairy tale whizkid stuff from a well heeled advisor can help. there is literally no safety net for parents, for single parents, for private sector employees, for aged folks. medical situation in Govt run hospitals is the pits. have our beloved politicians visited NIMHANS or any other "premier" Govt place as ordinary citizens? no sir. for them, nothing but the best will do. when was the last time our CM (of any state) polished his own shoes? they have twenty odd policemen and hangers on at their beck & call. This is the "reality" of the lal-batti culture which then decides "budgets" and preens about "I looked at the data and the tax was only 25%". this in a country where the most basic of civic amenities are not available and everything has to be done by the individuals for themselves as the GOI (at almost all levels) is a hindrance not an aid. of course, if you belong to the right (numerical) community, burn a few trains, buses etc, GOI will do salaam and all iz well. in this milieu, its well within our rights to take a straight look at any PM, any admin & look beyond their rhetoric.

i voted for Modi, and i am well within my rights to also observe how his GOI needs to do more in specific areas and how out of touch some ministers are.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nirav » 02 Feb 2017 01:22

Karan,
Please state the "expenses" and "needs" of the middle class in the 10-20L bracket that you want the govt to do something about.
Expecting the govt to pay for 80ddb treatment by the way of 100% deductions is actually wanting a handout imo.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby SRoy » 02 Feb 2017 01:35

@Karan,

It's high time govt. does away with 80** sections for exemptions, in fact do away with all exemptions. It's better to rationalise tax slabs. I'm happy with that. I would know up front how much I gonna get taxed. It will also eliminate devious tax evasions schemes.

@Nirav,

There are people who have climbed their way up to middle class after generations of scarcity and hunger. Do you want them to slip down?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 02 Feb 2017 01:45

My perspective on the middle class safety net concerns: They are as real as any concerns a lower-middle or low income person or family might have. However, the budget is the wrong place to look for respite, new measures or any such things in the matter.

When you look at NM's actions, he's a fan of insurance pool based coverage. Several of his endeavors involve the creation of a backstop insurance cover. Here's a list:

Free basic coverage:
* PMJDY accounts come with free accident insurance cover of Rs.1 lakh. Launched 2015.
* Free life insurance coverage for the poor upto Rs.30K, dur to review in fiscal 2019-20 when this may become paid premium. Also launched 2015.

Paid premium coverage:
* Crop insurance (PMFBY) launched 2016. No cap on coverage. Covers landslide, hail, flood (flood was never covered before).
* Atal Pension Yojana: Basic pension of Rs.1K-5K per month. Individuals 18-40 contribute, drawdown from 60 onwards.
* Pradhan Mantri Suraksha Bima Yojana : Accident insurance upto Rs.2 lakh for just Rs.12/annum
* PMJJBY: Life insurance worth Rs.2 lakh for Rs.330/annum.
* Sukanya Samriddhi : girl child education and care investment program. Can contribute from Rs.1K-1.5L per year, upto age of 18. Fixed rate of return.
* National Health Assurance Mission: The big deal Univeral Healthcare Plan. Currently in draft development stage. This is really what people want. As with any major UHP, this involves significant planning and preparation. The original draft plan was estimated to cost $25 billion over 5 years, subsequently modified to $19 billion over 5 years. My guess is that this will be rolled out before 2019. However, it will not be announced in a trite Budget speech by the FM. The PM will announce it himself at a better setting.

If you look at the above, there's an emphasis on providing basic coverage - both free and cheap premium paid plans - for typical low income and lower-middle income needs. However, there's also a much larger UHP in the works, that's been developed behind scenes. Feel free to search for National Health Assurance Mission to see what I mean. There are references dating back to 2014. UHPs are very complex beasts to establish and run, and the time taken to set the groundwork is not unusual. Until then, there's no reason every middle class person should not sign up for the basic Jansuraksha plans - APY, PMSBY and PMJJBY, while the Sukanya Samriddhi plan is a pretty useful investment scheme for the girl chid.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby nirav » 02 Feb 2017 01:50

Of course not, SRoy ji.

Having seen the scarcity and hunger up and close, I wouldn't want that for anyone in an ideal case scenario.

The way up wasn't due to goberment action but by sheer dedication and hardwork.
What tax cut/deduction will help the middle class move higher up the chain though?

What specific action has the current govt done or I have said would lead to the middle class sliding back down ?

One gets to hear a lot about lack of a "social security net"
The middle class has reached where they are while such a net was absent all along.so it isn't as bleak a situation as is being made out.

For the moment the govt is battling getting ALL of 1.25 billion people to crap indoors.
For guys thundering about a "social security net" where's the money going to come from to cover the same 1.25 billion !? They want tax cuts and more deductions in what is a fair taxation system wrt global standards..

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby James » 02 Feb 2017 05:31

achoudhury wrote: But I think, NaMo is keeping some powder dry for next two budgets keeping 2019 in mind..


There's only 1 more budget to go - 2018. There won't be a full budget presented by the current government in 2019, it will only be a vote on account to cover the first 3 or 4 months of FY 2019-20. The govt. that comes in after the 2019 elections will present the full budget for 2019-20.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby amit » 02 Feb 2017 06:24

    37. India's tax-to GDP ratio is very low. We are largely a tax non compliance society, when too many people evade taxes burden falls on those who are honest.
    38. Out of 3.7 crore who filed tax returns in 2015-16, only 24 lakh persons showed income above Rs 10 lakh.
    39. Of 76 lakh individuals who reported income of over Rs 5 lakh, 56 lakh are salaried.


Source

These are numbers that need to be kept in mind when cribbing about lack of tax concessions. Either the government can pile up sops to keep perceived "votebanks" happy - remember a government called UPA? - or it could try to implement policies that promotes growth, whereby everybody prospers and eventually increases the tax base which then allows for a more rational tax structure. I was hoping that at least on this forum folks would see the big picture for what it is and not succumb to "what's in it for me?" mentality.

IMO opinion the success or not of a budget should be judged on the kind of investment that is being made/money allocated to projects which can create employment, boost demand and set up a virtuous cycle of prosperity whereby more people leave agriculture and enter the formal manufacturing economy. In this criteria I think this budget is quite positive - no big bang, no sops but emphasis on creating infrastructure and spending.

    16. Allocation under MNREGA increased to 48,000 crore from Rs 38,500 crore. This is highest ever allocation
    17. Total allocation for rural, agricultural and allied sectors for 2017-18 is Rs 187223 crore, which is 24% higher than last year .
    18. One crore houses for poor by 2019.
    19. Safe drinking water to cover 28,000 arsenic and Fluoride-affected habitations in the next four years.
    20. 133-km road per day constructed under Pradhan Mantri Gram Sadak Yojana as against 73-km in 2011-14 .


The list above doesn't take in account the massive investment in Railways, and other infra projects.

Oh by the way, we should also remember the sops that are there in the budget that we all enjoy one way or the other:

48. Food subsidy estimated at Rs 1.45 trillion in 2017/18 versus Rs 1.35 trillion revised estimate for 2016/17
49. Fuel subsidy seen at Rs 250 billion in 2017/18 versus Rs 275 billion revised estimate for 2016/17
50. Fertiliser subsidy seen unchanged in 2017/18 at Rs 700 billion[/list]


Disclaimer: This post is based on just a cursory reading of one news article. A more comprehensive reading of the budget papers should make this even more interesting.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Gus » 02 Feb 2017 06:48

Suraj - can you add all the missing links and add anything else you want to add please, would like to spread that post ..

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 02 Feb 2017 07:07

Sure, I'll do that soon. Here's more on the NHAM, from an oldish article but with details:
India to spend Rs.1.7 lakh crore on universal healthcare
India will be spending around Rs 1.7 lakh crore (USD 28 billion) on its ambitious universal healthcare scheme.

Under this scheme, free drugs, diagnostic tests and insurance cover will be provided to all its citizens.

The scheme under the National Health Assurance Mission would be rolled out in a phased manner from April next year. It will cover the entire population while taking care of their healthcare needs by March, 2019.

Sources revealed that the Health Ministry is in the process of finalising a note for the Union Cabinet with an aim to get its approval in the next two months. The approval of the Finance Ministry is also being sought separately.

At a meeting of top Health Ministry officials held Thursday to review progress on the proposal, it was decided that three to four districts will be selected in each state for rolling out the scheme.

Sources said later the scheme will be launched in a phased manner in all the districts across the country and will be applicable to all state governments as well as private medical establishments.

Once fully operational, all citizens will get free medicines, drugs and diagnostic tests in all government as well as private medical establishments across the country, he said.

Officials said an Expert Committee set up in this regard has estimated that a total expenditure of Rs 1.7 lakh crores (around USD 28 Billion) will be made under the scheme.

They added that around Rs 80,000 crore (around USD 13 billion) will be spent annually under the scheme but final details are being worked out to reduce the expenditure to some extent.

Based on everything I've read so far, this thing is coming soon. It's been in the works for two+ years now. They want it in place by March 2019, as the article says. It's also quite costly, and involves long term financial planning and preparatory work to ensure adequate delivery of services and medicines with minimal leakage, through the national healthcare system, public and private, including facilitation of insurance. As the US example shows, this is an extremely complex endeavor. Heck, they just threw out most of their system just out of political spite.

As with many large-scale projects (e.g. PMJDY) by Modi, I expect this to be rolled out as a pilot program and subsequently expanded nationwide. There also won't be major publicity about this until they have their ducks in a row. I do not think anything will be announced that he's not confident can be run without significant corruption and inefficiency.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 02 Feb 2017 07:46

Another piece of information, regarding the anger about few tax sops above 10L (or other brackets). Here's a breakdown of assessee count and returned income:
Image
The 2-5L bracket constitutes 35% of taxpayers, but only 8.5% of revenue. GoI expect to make it up from the highest tax slabs. The other major middle class brackets: 5-10L constitutes <10% of assesses, and 10L-1CR are <5% of assessees, but the latter i particular accounts for almost half of taxes.

Now type of IT paid:
Image
Among individuals, salary constitutes over half of declared income. Most of the rest comes from business income. LTCG/STCG are practically negligible, as are house/property income. This is unlike the US or other major developed economies where the income of the wealthy, who pay most of the income taxes, comes mostly from business income + capital gains. Here's US IT breakdown.

As the data above shows, it's not even the case that 'only 30 million people in India pay income tax'. In fact, that's the number of people filing returns. Out of that, half pay taxes. 50% of income tax is paid by the 13 lakh people with declared incomes of Rs.10L to 1CR . Another 16% is paid by the 33K people with incomes of 1-5CR, and only 2700 people clain incomes above 5CR. Do any of these numbers sound realistic ? Until more undeclared income is unearthed by DeMo and the >1CR brackets gain many more members - remember IT just sent notices to 18 lakh people for undeclared deposits of 4.17 lakh crore - GoI doesn't have a lot of hands to play. I hope DeMo changes the tax brackets to such an extent that they can easily provide a significant tax benefit to the upto 10L brackets.

Source: Making tax data public will facilitate policymaking and administration

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vina » 02 Feb 2017 08:45

Suraj wrote:Another piece of information, regarding the anger about few tax sops above 10L (or other brackets). Here's a breakdown of assessee count and returned income:
................. and 10L-1CR are <5% of assessees, but the latter i particular accounts for almost half of taxes.

.........50% of income tax is paid by the 13 lakh people with declared incomes of Rs.10L to 1CR . Another 16% is paid by the 33K people with incomes of 1-5CR, and only 2700 people clain incomes above 5CR.


Ah , so what all this means in Inglees is the following.

1. The honest taxpayer , the "salaried" one, is the sucker. You pay a full 2/3 rds of all direct taxes, but you pay for all the "social" stuff for the neta, babu, judge, pandu and the "unwashed" classes. You get NO social benefits that is actually usable (education, health, social security etc) that is commensurate with your expectations and income levels.

2. Oh, but since you ARE honest and pay taxes, it is correct onreee for you to pay up 10% and 15% surcharge on the taxes you pay..It is the right of the dukandaar, the unwashed, the unaccounted guy who cheats by declaring less than 2.5L income , but still gets all benefits (including subsidised LPG of course)

3. Now the cheaters will continue to cheat AND will laugh at you. The land , RE and politico mafia WILL cheat by rigging up real estate prices. Cars have 40% + taxes in them, fuel has 50% + taxes in them.. VAT is @ 18% .. You will pay all taxes, while the cheaters will cheat and not pay ANY of those taxes and infact, make more wealth by creating and nurturing a parallel black economy

4. Until kingdom comes and the "DEMO" works (as of today, we have absolutely NO idea to the simple question, KITNA AAYA? KITNA AAYEGA?), YOU the honest guys will keep the gravy train going.

5. Socialism is GOOD (oh, in Europe, you pay taxes, but actually HAVE useable services, here it is none), so you must pay for others, even if you get nothing out of it yourself.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby apoorv » 02 Feb 2017 09:37

Continuing where Vina left.. there are too many toll booths on highway, surcharge for things that are not improving e.g swachh Bharat. Middle class is paying a lot of money for very little in return.

Although I will continue to bote for Modi but only because of TINA factor. His ideas are good but implementation often seems half baked.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby rahulm » 02 Feb 2017 10:03

At this point in time. my sentiments echo Vina's and a few others


The black cash economy is returning with a vengeance and once again, the salaried and honest tax payers are the suckers. Ever tried getting a pucca receipt from any beach shack in Goa or from a Kirana store in Pune?

The GST can't come soon enough. This input tax credit is going to be a wonderful thing.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby A Deshmukh » 02 Feb 2017 10:13

Suraj wrote:Another piece of information, regarding the anger about few tax sops above 10L (or other brackets). Here's a breakdown of assessee count and returned income:
Image

0-2L bracket = 50% assessees
2-5L bracket = 35% assessees
So 35% assessees will see taxes halved from 10% to 5%. enough reason to be happy.
Others will see a benefit of Rs. 12K pa - more disposable income with salaried class. Not bad at all.
for >10lakhs brackets (< 5% of assessees) have already got a major break on interest/EMIs.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vina » 02 Feb 2017 10:35

I am actually pretty perplexed why some wholesale changes in taxation laws weren't done, especially in very low hanging fruits.

1. Dividends- This dividend distribution tax was introduced by Chidambaram because they couldn't "police" the dividend recipient's returns. Now with Demat fully in, and physical shares out and with all the KYC norms, identifying dividend recipients is easy. What the govt should have done is this.

a. Remove DDT and make dividends fully taxable in the hands of the recipient as ordinary income . There is no reason in HELL that 85% Percenti, Bada Bhai and Chota Bhais and others should pay an effective rate of 15.3% on multiple HUNDREDS of crores of income . They should pay at the max marginal rate. This is one massive scam that is going on.
b. By law, it should be mandatory for anyone receiving even a SINGLE rupee of dividend income from any source to mandatorily file a tax return and explain the source of income for acquiring that asset.

2. Capital Markets - .

a. Mutual funds and others get a free ride . The pay NO taxes and with the STT based regime, mutual fund investor 1) Pays no STCG though the MF does trading and stuff for him 2) Interest income is shielded from tax 3) Dividend income is at DDT rates. They are grandfathered from the UTI regulations of 1969 or whatever . What they should do is give pass thru to MF investors with a split shown in terms of LTCG, STCG, Interest and Dividends and each sub element taxed at the applicable rates . Any tax shelter should be only available to specific accounts (such as retirement accounts) from which those investments are made. Put a 3% withholding tax on these distributions and relieve the fund manager of any residual liability and make sure the recipients file a tax return.

b. Remove that idiotic STT and the massive tax loophole associated with it and move to a more rational system.

c. Making tax shelters on investments (0% LTCG etc ) available ONLY to specified retirement and other accounts (which have exit barriers in holding period etc) would have closed huge loop holes that give rise to abuses such as dividend stripping and converting biz income to capital gains etc.

3. Rental Income -
a. Create a national Rental Payment system (landlord and lessor has to register) (sort of like ESCROW) and rental payment expensable for business (if paying rent) and HRA tax shelter if for households , applicable only if the rents are paid via this system.

b. Make the landlord mandatorily file returns, to explain the source of funds for his capital asset and make him account for the rental income in his past returns.

Just doing these would have have removed massive distortions, got the whole lot of ill-gotten assets parked in tax sheltered instruments into the open and made for a lot fairer system. But NO . None of that. Same old same old protection of the incumbents from the "Command and Control" days and the measures to keep those guys where they are (even at massive tax costs and abuse) and of course , special "Damaad" treatment for foreign capital that get away literally with murder in terms of tax treatment and privileges.

But no, NONE of the jackasses I speak with who recommend stuff on this have any idea of what they are talking about (they are all Baboons/ Former Baboons/ Aca Dummics / Think Tanks. .none with actual real world knowledge of what they are talking about want to fiddle around with STT, look at derivatives markets notional size and think in terms of what if I put a 10% tax on it, well, I will get hajaaar billions of dollars worth kind of idiocy, with scant idea of what any of it is .

Again, in India, real reform CANNOT come from the same old Baboons and incestous circle of service providers who have not operated in any fair / civilised jurisdiction without distortions and who don't know ANY better being kicked out and a whole new clean slate brought in. These guys are beyond reform. Best to cashier and send them home (Fire 'em and Smoke 'em) .

DEMO is ACTUALLY a good start. It will bring a massive amount of unaccounted wealth and untapped tax base that cheats into the system. But how one proceeds beyond that is the massive question.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 02 Feb 2017 10:48

I don't see why 'honest taxpayers' are 'suckers'. Was anyone under the impression that the tax system is not progressive ? In my opinion, the biggest problem is that the over 1Cr income folks are too few in number and therefore only account for 25% of the total tax collection. However, even in the US, the top 1% account for 25% of IT. There's not a huge difference in rough quintiles vs contribution to overall taxes, for US and India. However in our case, it is possible to skew the contribution chart far more towards the >10L and especially >1CR income group because there are many in that group who do not declare their incomes fully, by resorting to concealed capital gains, real estate income and other non-salary sources.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vina » 02 Feb 2017 11:11

A Deshmukh wrote:for >10lakhs brackets (< 5% of assessees) have already got a major break on interest/EMIs.

:shock: . Have you heard of the term MCLR ? What does it mean ? Are the "interest" breaks for earlier loans or for loans going forward ? How does it work in civilised countries . Are there barriers to refinance old loans with cheaper loans (hence ensuring interest rate cuts get passed through immediately), or the banks have refinance barriers even in their "floating rates" , so that when rates fall, there is little pass through , but when rates go up there is immediate pass thru . Why is that ? Is it legal at all (or is it a wink and nod , do it anyway, we wont prosecute you )? Does it happen in civilised jurisdictions ?

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby vina » 02 Feb 2017 11:41

Suraj wrote:I don't see why 'honest taxpayers' are 'suckers'. Was anyone under the impression that the tax system is not progressive ?


Perfect definition is of "progressive taxation" .
So question time. Multiple choice (or rather two choices, pick the right one)

a. Progressive taxation means, people with higher income pay more taxes according to their ability. Cheating is a crime and if you cheat on taxes, you will be prosecuted and in no case should the burden of your cheating fall on the shoulders of those who are honest.

b. Progressive taxation means, that if you cheat, you are actually SMART and the guy who actually pays his taxes is DUMB. So it is only perfectly natural that the SMART guys cheat and pay no taxes , while the DUMB donkeys shoulder the burden because they are well donkeys and dumb.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Suraj » 02 Feb 2017 12:02

Discussing the merits or otherwise of progressive taxation is way out of the scope of this thread. It's true that the middle class pays for the crookedness and tax evasion of the wealthy. There's Rs.4.2 lakh crore / $65 billion of unaccounted for money deposited by 1.8 million people being queried as part of the first phase of post-DeMo review.

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Re: Indian Economy News & Discussion - Aug 26 2015

Postby Hari Seldon » 02 Feb 2017 12:24

^ Perception matters. DeMo got the support it did because people believed that the allegedly smart-asses who were evading taxes and hoarding black cash were the hardest hit.

But this progressive taxation thing doesn't look anything like it. Until GST comes in and most txns are digitized, evading taxes in a country like India will always be easier than paying them, IMHO.

Well, we'll see what happens w.r.t. the benami properties act in action and all that now, won't we?

And with enough cash suddenly available, hoarding has restarted in the usual-suspect quarters, BTW.

One good thing however is that political donations have been cleaned up in principle. What will it bring in implementation terms remains to be seen.


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