Slew of In­cen­tives to En­sure Head­start for In­dia’s Star­tups

The Economic Times - - Front Page -

The gov­ern­ment wants to clean up po­lit­i­cal fund­ing and has framed a pro­posal to is­sue elec­toral bonds, which will en­able po­lit­i­cal par­ties to get funds through cash­less trans­ac­tions and keep the iden­tity of donors un­der wraps. The Cen­tre has armed tax­men with sweep­ing pow­ers to con­duct searches and sur­veys, a move that’s made in­dus­try jit­tery, which fears ar­bi­trari­ness and ha­rass­ment.

im­prove hon­esty and trans­parency in po­lit­i­cal fund­ing, but these are tooth­less. He has slashe d the limit for anony­mous cash dona­tions from ₹ 20,000 to ₹ 2,000 per donor. As laun­der­ing of high-value notes showed ear­lier, such curbs are eas­ily evaded. Po­lit­i­cal man­agers can sim­ply raise num­ber of bo­gus donors ten­fold.

Any­way, only a tiny frac­tion of po­lit­i­cal money ever en­ters party reg­is­ters, so the new mea­sure can­not cleanse pol­i­tics. Jait­ley has pro­posed elec­toral bonds to at­tract le­git­i­mate po­lit­i­cal dona­tions, but the truth is that donors don’t want the le­git­i­mate route any more than po­lit­i­cal par­ties.

Cash trans­ac­tions of more than ₹ 3 lakh have been banned. But how will this­beim­ple­mented?Theru­rale­con­omy is still mostly cash based. So is jew­ellery. The po­lice-ju­di­cial sys­tem is over­loaded and hardly ca­pa­ble of en­forc­ing the new mea­sure.

By low­er­ing the in­come-tax rate on the bot­tom slab from 10% to 5% and im­pos­ing a 10% sur­charge on higher slabs, Jait­ley has trans­ferred the tax bur­den­fromth­elow­er­mid­dle­classto the up­per mid­dle class. By it­self, the new 5% rate is hardly likely to im­prove In­dia’s pa­thetic tax com­pli­ance. Far more promis­ing is Jait­ley’s aim to use data min­ing of de­mon­eti­sa­tion and GST to re­veal in­con­sis­ten­cies and eva­sion. Tough fol­low-up ac­tion can greatly im­prove com­pli­ance in the medium term.

Over 90% of FDI pro­pos­als al­ready go by the au­to­matic route. This makes pos­si­ble the abo­li­tion of the FIPB. FDI in strate­gic ar­eas (de­fence, tele­com) will still need clear­ance.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.