‘government should abolish all taxes’
ArthaKranti wants the Centre to work towards simplifying taxation.
ArthaKranti”, an organisation which has been pushing for abolition of higher denomination currency notes, says it wants the government to ban all taxes, including the income tax.
The organisation, which had made a detailed representation on alternate model of economy before Prime Minister Narendra Modi in 2012, when he was the Chief Minister of Gujarat, wants the complete suspension of Rs 500 and Rs 1,000 notes gradually. This alternate model of economy, according to the organisation, will lead to “principle, prosperous and peaceful living” in the country.
“The government’s decision to demonetise higher denomination currency notes is a welcome step. We understand ‘complete with- drawal’ of Rs 500, Rs 1000 and now the new Rs 2000 notes is not possible at the moment. But we hope that these currency notes will be out of circulation in the next few years,” said Mukesh Sharma, a senior Delhibased official of ArthaKranti, while speaking to The Sunday Guardian. Sharma is an MBA (Finance) and runs a construction business.
“The banking system is not fully developed yet. Internet banking system and Aadhar enrollment are not complete. We also lag behind in terms of literacy rate. In this situation, we understand that ‘complete withdrawal’ of higher denomination notes is not possible. It will take some time. But we are glad the government has taken the first step in this direction,” he added.
After the demonetisation, the organisation would like the government to work towards simplified taxation by scrapping all 56 taxes, except import and customs duties, and introduction of a flat Banking Transaction Tax (BTT).
“We have done enough research in the last 14 years and concluded that a straight transaction tax of 2% would be sufficient to run the country. This will bring down inflation and make the life easier. The proposal will not lead to loss of revenue for the government, but will plug tax evasion and avoidance,” said Sharma.
The new notes should be a stop-gap arrangement and should be demonetised or withdrawn after a smooth transition from the current cash-based, non-transparent system to a well-banked, transparent economy, according to the organisation. It says the new Rs 500 and Rs 2,000 notes should be introduced in a calculated way and Rs 2,000 notes should be introduced only to con- trol the number of pieces and provide adequate value for transaction balancing.
Sharma said: “As per Reserve Bank of India (RBI) data, our economy is cashdriven. About 70- 80 % transactions are cash. The cash transaction is seven times higher than the banking transactions whereas in developed countries, it’s just the opposite, where banking transactions are 4-5 times higher than the cash transactions.”
According to him, “We should also take into account that 77% of population spends less than Rs 30 per day. An average middle class person spends Rs 100– Rs 500 per day. So where is the need of higher denominations?”
There is a great disparity between the per capital income and highest denomination. In US, per capita income is $53,000, the highest denomination is $100; in UK, the per capita income is 25,000 pound and highest denomination is pound 50; in Japan, the per capita income is Yen 5,000,000 and highest denomination is Yen 10,000.
If per capita is divided by highest denomination, it comes 530 for US, 500 for UK, 500 for Japan. But in case of India, PCI is Rs 90,000 but highest denomination (till now) was Rs 1,000. So the value comes to a poor 90.
Just before the Lok Sabha elections in 2014, the organisation members had several rounds of meeting with senior BJP leaders like Nitin Gadkari, Arun Jaitely, L.K. Advani, Rajnath Singh, Sushma Swaraj.
They had appealed to them to incorporate ArthKranti proposals in the party’s vision document or the election manifesto. However, at that time, a final view could not be taken. In the Indian economic scenario, agriculture plays a major role, contributing around 20% of the Gross Domestic product (GDP). However, compared to other nations, the per acre productivity is, on an average scale, below par. This is majorly because the sector is yet to catch up in terms of technology usage and basic facilities available to farmers in other parts of the globe.
Prof. David Halliwell, Director of Centre for Regional and Rural Futures (CeRRF) at Deakin University, Australia, spoke to The Sunday Guardian about the benefits of adoption of “Smart Agriculture” techniques into the Indian agricultural system. Excerpts: Q: The Indian economy is still mostly a rural and agrarian economy, yet India is dealing with farmer distress and low productivity. What smart agricultural ways can India adopt for better farming? A: There are a number of technologies we are using back in Australia and I am sure even here the government is working towards improvement of the farming community. As far as technology is concerned, we ( Australia) use technologies like the remote sensing technology for better understanding of the farms, predict irrigation patterns and resources required. That’s probably one of the simplest and easiest technologies. In Australia, we are also using drone technologies with sensors for a number of things like understanding soil texture and its nutrient value, crop yield, giving indication about the deficiency in soils and then managing the efficiency of the soil and inputs to increase productivity. Q: Can you explain how drone technology helps in farming? A: Drones are like the same small flying gadgets with cameras, which we see in televisions, etc. In drones, we use visible spectrum cameras and infrared cameras with sensing technology. They can also be used and controlled from one’s smart phones. As a drone flies over farms, it gives pictures and mapping of the farms indicating the water stress in the crop. Dark and red patches in the map also indicate where there are less or more moisture in the field. Different colours are used to indicate different aspects in the field. And then these maps can be used to analyse and provide the field with their necessary requirements and nutrients into the affected area for better productivity. Q: How much does this drone technology cost? A: In Australia, this technology costs about 3,000 Australian Dollars, which would amount up to Rs 1,50,000 in India. Q: But the Indian farming community largely constitutes rural farmers who are mostly un- educated, less tech savyy