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Category Archives: Finance

Illicit liquor/hooch tragedy, fundamental cause

Finance Minister blood is on your lapel!

Spurious Liquor and death therefrom is seasonal ritual in India. Every year or next, a tragedy or the other happens at one place or another. Causes for such recurrent tragedy are apparent policy failure and it is unlikely to be corrected under present Hindu myopia. Earlier the reason was apathy towards poor. Mere change of reason without change of policy. Bihar is the recent State which has prohibited liquor altogether. Therefore Bihar would be the next State from where next tragedy will occur.

The real reasons for such tragedies:

Confiscatory taxation:

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Corruption unleashed by Bureaucracy.

Corruption and Bureaucracy:

Bureaucracy defines the march of any Nation. Govt can make policies and Bureaucracy can defeat it with impunity. To get the result the Government has to be extra cautious to rein in Bureaucracy often with carrot and stick policy.

Govt of India has already offered carrot to Bureaucracy by way of pay hike as recommended by pay commission. Time has come to crack the whip. Interestingly the most corrupt department of Govt is Income Tax department but unfortunately, Prime Minister Modi has a blind side which is Income Tax. As regard Finance Minister, his quality as a lawyer can not be disputed but he is not an administrator and certainly not an economist. As regards his administration, post demonetization chaos, is a proof of absence of administrative capabilities. His poor health certainly does not help.

Martial law by Bureaucracy:

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Corruption in Public Sector Units (PSU)

Example of corruption by PSU while doing ‘legal’ thing:

Socialism brought into existence industries owned by Govt. Some of these are monopolies of sort and are also in profit. The companies which are in profit are given a lot of autonomy by Government and in India such Companies are called and given a status called ‘Navratnas’ or one of the nine jewels. One such jewel under Ministry of Railway called up our office to seek legal opinion in respect of a matter which was patently wrong.

This is the reply given by us to them:

Dear Sir,

We have strict policy of not to be part of any corrupt practice. Opinion shopping is one such corrupt practice. Though we do not imply any corruption on your part at all.

Some PSU officials resort to seeking opinions from a number of lawyers but use one opinion which favours their cause. Since they can’t keep other contrary opinions on record, others are destroyed. And the lawyer who gave favourable opinion gets paid.

Accordingly to discourage this corrupt practice we have as a policy insist on upfront payment so that the opinion given be us remains on record.

In the year 2012 your predecessor took an opinion and was not happy with it. Hence our bill is still unpaid. We were not given any reason for non payment. Emails ignored and phone call refused as busy.

If you desire details of that transactions can be made available.

Under these circumstances we insist advance payment and can not render opinion without an advance payment.

We regret if it caused you any inconvenience.

Regards

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Main Stream Media hates demonetisation.

Fake News Mafia

Main Stream Media is now a propaganda machine for hire. Independence of journalism is a concept which is out of practice. It seems this is true not only for India but also in USA. One newspaper twisting same news headlines in two different ways! See the picture of Wall Street Journal below:

Editors & Journalists:

Editors who used to be humble beings now live in sprawling Mansions, travel in executive class and stay and dine in five star hotels. TV anchor driving Porsche is a new norm. Do news papers sell more now? How these journalists are making money?

Yesterday I read an article about economy which does not have a single numeric character. It suggested as if India has curfew like situation. But actually it is not. It is a business as usual for small transactions. Indian business is run on credit though settled in cash. Now people are making habit of carrying plastic or mobile wallet. See the market yesterday:

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Demonetisation of High Denomination Indian Currency in 2016

Demonetization revisited India after 38 years. The large denominations of old currency has been disowned with a window period to exchange it with new currency within 50 days from any bank and thereafter from Reserve Bank in another 3 months. The secrecy of the plan and sudden announcement may make it success. Though doubts are raised that Indian Jugaad may hurt the objective. But there are other questions as well e.g. Would it eliminate black money?

What is the objective?

In short it is a soft reboot of economy by replacing entire cash in circulation with new one. But the implication is that person holding the cash would have to come forward to deposit it with disclosure of his identity. Thus a person having huge amount in cash would in turn have to explain, how s/he earned it.

For ordinary people who are regularly paying taxes and filing income tax returns, this is a mere formality but those who live off the radar, this is a serious trap.

There are groups of smugglers, Mafia thugs, politicians who have rooms full of currency notes for their operations. They are the real target of this operation. Of course neighbour Pakistan churning counterfeit currency is also the target.

But this exercise was undertaken in 1978 and it was a failure. What makes it work this time?

Why demonetization failed in 1978?

In 1978 Morarji Desai was prime minister as the leader of all opposition alliance called Janta Party. Morarji Desai was an upright man who had remained in Congress until Indira Gandhi made it impossible. Congress party has an illogical bias in favour of legislations. So did the Morarji Desai. They thought that legislation’s have Divine force and executive order is evil. There is no other reason to explain it. Hence Morarji Desai used an Ordinance to declare withdrawal of high denomination notes and in the process too many people had advance knowledge of the move. Continue reading