India can raise an Exclusive Corpus Fund of Rs.10 Lakhs Crores +, from our financially able persons
on annual basis for coming 5 years, to finance its Infrastructure projects, in a legally enforceable
,Technically feasible and Economically viable way.
Why Do We need This Scheme Despite huge revenues expected from Demonetisation?
According to a revised estimates ( based on Dec 2016 Data), Govt’s expected earnings from Demonetization
Drive 2016,is,approx.Rs.0.5 Lakhs Crores income from the undeposited high valued notes and Rs.4 lakhs Crores
from Taxes levied under The Taxation Laws(2nd Amendment) bill 2016 besides an additional Rs.2 lakh Crores as
interest free Deposit for 4 Years. However these Demonetization earnings, will have to be spent/invested only
recently announced, ‘ Prime Minister’s Garib Kalyan Kosh” (PMGKK), as promised by our respected PM..However
this earnings will not resolve India’s funds requirement for its Infrastructure projects in all crucial sectors, which
is gigantic. Hence, I, as an Ex banker and law Graduate, have proposed to present this specially devised, which is
legally enforceable, Technically Feasible and economically viable scheme.
With this proposed scheme,India can raise an Exclusive Corpus Fund of Rs.10 Lakhs Crores+, on annual basis for
coming 5 years +. This can be made available @ 4% or at reduced rate as decided by Govt. Of India (GOI ) for
meeting our Infrastructure Projects' funds requirements in Railways, Defence, National & State Highways,
Rural/Urban Roads, Power, Ports, Airports, Transport Planes, Agriculture, Oil exploration,Health & Sanitation +
other national importance projects.
The following pages consists of the executive summary of my captioned scheme.
How To Raise the funds? Basic features Of the Scheme.
1 – Income Tax Paying Financially Able Persons
on annual basis for coming 5 years, to finance its Infrastructure projects, in a legally enforceable
,Technically feasible and Economically viable way.
Why Do We need This Scheme Despite huge revenues expected from Demonetisation?
According to a revised estimates ( based on Dec 2016 Data), Govt’s expected earnings from Demonetization
Drive 2016,is,approx.Rs.0.5 Lakhs Crores income from the undeposited high valued notes and Rs.4 lakhs Crores
from Taxes levied under The Taxation Laws(2nd Amendment) bill 2016 besides an additional Rs.2 lakh Crores as
interest free Deposit for 4 Years. However these Demonetization earnings, will have to be spent/invested only
recently announced, ‘ Prime Minister’s Garib Kalyan Kosh” (PMGKK), as promised by our respected PM..However
this earnings will not resolve India’s funds requirement for its Infrastructure projects in all crucial sectors, which
is gigantic. Hence, I, as an Ex banker and law Graduate, have proposed to present this specially devised, which is
legally enforceable, Technically Feasible and economically viable scheme.
With this proposed scheme,India can raise an Exclusive Corpus Fund of Rs.10 Lakhs Crores+, on annual basis for
coming 5 years +. This can be made available @ 4% or at reduced rate as decided by Govt. Of India (GOI ) for
meeting our Infrastructure Projects' funds requirements in Railways, Defence, National & State Highways,
Rural/Urban Roads, Power, Ports, Airports, Transport Planes, Agriculture, Oil exploration,Health & Sanitation +
other national importance projects.
The following pages consists of the executive summary of my captioned scheme.
How To Raise the funds? Basic features Of the Scheme.
1 – Income Tax Paying Financially Able Persons
Every individual/Corporate entities who are liable to contribute under thsi scheme, will be clearly defined with his/her share of contribution's requirements.The said compulsory Deposits will carry, only a simple 4% or such reduced rate of interest as decided by GOI. Care will also be taken to ensure that, the contributors are suitably compensated for the financial loss arising out of such compulsions, with admissible deductions from their income pertaining to that FY, in which such deposits are made.
2: The funds raised internally from our financially able citizens /Corporate entities on Compulsion basis. This includes income tax paying and exempted categories under Income Tax Act too. Both will contribute compulsorily for the “Nation Building Fund on yearly basis for coming five Years. The said amount will be returned to depositors after five years @ annual simple interest of 4% or at such reduced rate of Interest GOI may opt. India’s Net Direct Taxes Income in FY 2015-16 was at Rs.7.52 lakhs Crores, & FY 16-17 @ Rs.8.47 Lakhs Crores.( Ref TOI 10.12.16) Direct Taxes income mainly from Personal income tax and Corporate taxes in FY 2015-16 was @ Rs.7.40 Lakh croresas per the income Tax site This will be the very first, “already identified and verifiable source” of our contributors.
3: Each of such assesse will have to compulsorily deposit the amount equivalent to his /her tax liability of previous FY, on yarly basis, for coming 5 years. The last date for such deposits, will be 30th Sept of the then prevailing current FY. The period of each of such deposit will be five years, with normal features of Bank deposits like operational instructions, nominees etc. To illustrate, If income Tax paid in FY 2015-16 is Rs. 1.55 lacs, then that assesse will have to deposit Rs.1.55 Lakhs before 30th sept 2017. All the Banks who collect Central Govt Taxes, will be the collecting centres for such Deposits and will be empowered to issue the related Deposit receipt.
4: The amount so collected, may cause constraints on most of the assesses’ working funds requirement. Hence wherever needed, the Banks, who collects the deposits, will be allowed to give an unsecured loan facility to the assesses against the eventual deposits.The assessee will have to agree to pledge with that Bank’s Branch for converting it into a FD loan. Once the Deposit is pledged, banks can give normal advance as per its loan policy and thus should first close the earlier unsecured loan and continue to show the dues as a new FD Laon account, if the Assessee wishes so. Assesse can close it, as per his/her convinience.
Now Assesses who are not a Income Tax payers :-
5: All those exempted to pay Income taxes, like Exporters/Trusts/ Agriculturalists/ any other permissible industrial Units etc.,they too will be required to comply with above referred scheme. Their respective quantum of deposit criteria too will be well defined., e.g.
i) Exporter/trusts= say 1% of its gross income of previous FY.
ii) Agriculturists= All land owners holding irrigated land in the previous FY, will be required to deposit Rs.1000/per hector of such land, above 2 hectors. Part of hectors will be rounded off to nearest figure as per standard practice. The dues if not paid will be recorded as Govt dues in the Land extract.
iii) All Industrial Units = Amount equivalent to its notional Tax Liability of current FY, up to which Tax Holidays are given.
Above list is only illustrative and not exhaustive. No one, except very sr citizens (80 Yr +), will be allowed to take advantages of undeserving exemptions even though legally permissible under Income Tax Act.
Process after Collecting the Said Funds:-
7: All the Banks will forward the Deposits so collected, to Reserve Bank Of India. Where its Exclusive Corpus Fund a/c will be monitored and controlled. RBI will release the funds @ such reduced rate through The Lead Bank of the consortium for those Infra projects , which have been approved by the Govt. for implementation. The Lead Bank/consortium Banks will be allowed to charge interest @ 1% extra for funding these infrastructure projects.
Being Ex banker, my schme has given special attention to ensure that loan recovery is effectively made with tie up arrangement, e.g.
8: For National and State Highways, instead of going for PPP model with Toll rights, Govt should explore possibility of levying ‘a periodically reviewed Fuel Surcharge’.Here an example will prove this point. On 01st Jan 2015, Govt raised excise duty on all petroleum products by Rs.2/- per litre. According to published report, Govt was to earn a revenue of Rs.6000 crores in one quarter, In other words annual earnings of Rs.24000 Crores.
Hence if Govt levy Rs.10/- per litre over the current market price on all petroleum products, it can earn a revenue of Rs.1.20 Lakh Crores. This earnings has to be exclusively used for payment to Road Contractors as per the progress of the project, These payments so released will, be tied up with Banks’ lein under their recovery arrangements. TOI report of 29.12.16 states NHAI to pay Rs.922 Crores for revenue loss of 23 days to Pvt Toll colletctors. This makes the annual Toll earnings by these contractors are of Rs.14671 Crores only.
9: So will be the cases of Infra projects for Railways, Power, Ports, Airports, where every respective industry will have to form a repayment corpus by raising its revenues throughannual increase, of say 1% in its usage charges.Plus a prefixed automatic transfer from its incremental revenues, so as to ensure that they are in a position to ensure repayment as scheduled.
10: Agriculture- All Farmers with unirrigated agri land, will be assured of a Bank finance @ --% for building modern farm pond to tap store and preserve rain water in his/her un irrigated agricultural land. This will ensure a limited but an assured water supply. Now Govt must revisit its policy decision cleared by CCEA to give farmers a ‘Sustainable MSP’, and announce a new policy decision, asking all traders through out India, to mandatorily pay Govt's latest MSP which will be based on @ cost +50% , OR 50% of wholesale Market price for the related foodgrain crop, whichever is higher. To begin with, this policy should be extended to all types of foodgrain produces. For this purpose an electronic Market on the lines of NSE/BSE should be introduced under the supervision of SEBI
10A:Since all transactions will be routed through electronic markets, Banks who lends the money, can earmark its lien on farmers’ a/c with the Traders. The farmers will surely opt to go to traders, since an MSP as stated above, is assured for his/her foodgrain produce. Thus Banks can recover its annual installments. In case of officially declared Dry / Wet Draoughts, existing guidelines issued by RBI should be adopted for its restructured phase of repayment.These measures will make our farmers farming affordable to them.
10B: Concept of modern farm ponds, has been already proved successfull in many parts of India. The Govt’s guidelines for building Modern Farm Ponds are already notified through ‘Rashtriya Falotpadak Abhiyan 2006.
10C: Mandatory MSP will cause Food Inflation in urban areas, which can be partially eased, by paying additonal amount as and when the Gas Subsidy is paid out.Though this burden on Govt.,will be on higher side, we must take into consideration that,60% of our population who survives on farming,will start living above BPL, within 4 years period from the start of the scheme. A strong rural economy will boost Govt’s Tax revenues too, thus increased subsidy burden can be further reduced.
11: Swatcha Bharat :- Cleaning of Rivers will take a long period, but building toilets will not.
“ Sulabh Shouchalaya Intl”, already a proven champion on building and maintaining of Public Toilets. Govt should allow the said co to come out with an IPO of Rs.5000 crores. Govt. should also contribute further Rs.5000 crores in CO’s capital, as a Joint Venture. The Co should be asked to built new type of Toilets with an assured cleanliness through out India at almost all public places preferably on Local bodies land. Its location identification will be easy to locate. Wherever it stinches with that strong odur, a public toilet will have to be built. Its access will be through electronic swipe cards. Like mobile company recovers cell charges @ two paise per second or so, the said company be allowed to charge for its usage even for urination. Charges for each usage in paise, will ensure reasonable earnings. The said charges are to be duly approved by Govt.
12:River Cleansings: Importantly Central Govt. should take over all the existing Sewage Treatment plant which are run by local bodies including State Governments. This will reduce its existing malfunctioning despite making huge spending provisions provided in their budgets, and will be in line with Govt’s motto “Create Wealth from Waste”. The Central govt., will provide these plants, the required funds, modern technology.Plants at every Block level (8000 Blocks through out India) will convert human bodied waste/etcetra into a quality fertilizers and will also ensure that only well treated water,is released in the river links. With centrally monitored, and fully funded, its output/ accountability too can be closely monitored with. Increased fertilizer's production, will be a Foreign Exchange saver too. FY 2015-16 year’s budget’s additional Swachha Tax Surcharge @ 2% is earning GOI a tax earning of Rs.6000 Crores PA.
13:For Social securities Infra Projects undertaken with the above referred Exclusive Corpus Fund, like Swachha Bharat, Claesnsing Of Rivers, Health, Education etc. Govt will have to make additional budgetary provisions in its annual Budgets, so as to ensurre repayment of such funds used for social securities Infra projects are not put into danger. This principle will be also applicable, to Defence sector's funds requirements.
14:Thus Banks after ensuring recovery, will be in a position to repay its funds back to RBI. (Otherwise too, Banks have to repay its liabilities to RBI, irrespective of its recovery process.) In turn, RBI will return the funds to Banks who had originally accepted the said deposits, and finally Banks will return it to the depositors on its maturity.
Almost, a similar collection route and repayment route was successfully adopted and implemented under GOI’s CDS 1974 scheme.
15: A detailed Project Report (DPR ) will have to be surely made, if the captioned scheme is accepted in principle, by the competent Authority. This author is, all the more, willing to contribute to it.
Thank you.
Brief Resume
Name : Mr. Sanjeev Gopal Bhokarikar
Telephone : (91) 9421081129 (mobile)
Email : bhokarikar.s@gmail.com
Pesent activity : Bsides undertaking Bank audit assignments, I have been giving my suggestions on increasing Govt.’s Tax revenues. Many of my
suggestions have been accepted like Education Cess /Dividend Tax, STT tax. TDS @ 1% on property transactions etc. Though I understand that,similar views must have been given by others too, However I am happy to note that, my thoughts are also in line with Govt.’s views.
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