Given @nsitharaman has asked for suggestions on the budget 2020, sharing my thoughts. (also posting on mygov.in website)
These are my own views, and happy to engage but please dont troll ... following views reflect my right of center economic bias 🧵
These are my own views, and happy to engage but please dont troll ... following views reflect my right of center economic bias 🧵
@nsitharaman 1. Reduce subsidies in a glide manner
Rail fares, LPG connections, Electricity, Water, Fertilizers … are all heavily subsidized. A 5% hike in prices (with a plan to keep hiking 5% each year) can reduce subsidy burden & eliminate cross subsidy from manufacturing industry
Rail fares, LPG connections, Electricity, Water, Fertilizers … are all heavily subsidized. A 5% hike in prices (with a plan to keep hiking 5% each year) can reduce subsidy burden & eliminate cross subsidy from manufacturing industry
@nsitharaman 2. Rationalize taxation - Direct Tax code
Reduce exemptions on personal income tax, and raise the slabs.
Investment generates income on savings (which is post tax) - whether FD, Stocks, Bonds or Futures & Options, should be taxed at the same capital gains tax and not income tax
Reduce exemptions on personal income tax, and raise the slabs.
Investment generates income on savings (which is post tax) - whether FD, Stocks, Bonds or Futures & Options, should be taxed at the same capital gains tax and not income tax
@nsitharaman 3. GST - too many slabs
Keep all Services at 12% and Goods at 18%.
Too much effort from bureaucrats is done in classification.
Is it a luxury good? Is Kitkat a biscuit or a chocolate?
Make it easier for all.
Keep all Services at 12% and Goods at 18%.
Too much effort from bureaucrats is done in classification.
Is it a luxury good? Is Kitkat a biscuit or a chocolate?
Make it easier for all.
@nsitharaman 4. Open Up Bond Markets to Retail and Foreigners
SEBI has done a great job of opening up equity markets. Similarly could open up Bonds (Govt & Corporate) - to both foreign and local investors - who should be able to buy off an exchange. Local Brokers will step in as market makers
SEBI has done a great job of opening up equity markets. Similarly could open up Bonds (Govt & Corporate) - to both foreign and local investors - who should be able to buy off an exchange. Local Brokers will step in as market makers
@nsitharaman 5. Allocate more to Infrastructure Spending
That has the biggest multiplier for every rupee spent - Roads, Rail, Water Transport, Dedicated Freight Corridors
6. Divest PSU in phased manner
Have secondary sales in each PSU say 1% a year for 10years (block sales are different)
That has the biggest multiplier for every rupee spent - Roads, Rail, Water Transport, Dedicated Freight Corridors
6. Divest PSU in phased manner
Have secondary sales in each PSU say 1% a year for 10years (block sales are different)
@nsitharaman 7. Give Cities financial autonomy on spending and collecting taxes (e.g. property tax, stamp duty, vehicle registration) as well as issuing Municipal Bonds - leads to better urban governance.
Local bodies can govern better due to quick feedback
Local bodies can govern better due to quick feedback
@nsitharaman 8. Allow Private Pensions
USA has 401(k) program where people can invest for long term in tax free manner. Let people invest in stocks, long tenor bonds etc to fund their own retirement.
Then reduce interest on PPF and EPF
USA has 401(k) program where people can invest for long term in tax free manner. Let people invest in stocks, long tenor bonds etc to fund their own retirement.
Then reduce interest on PPF and EPF
@nsitharaman 9. Real Estate Distortions
GST should be 0 - for ready or under construction properties.
Also capital gains tax exemption if you buy another property etc should be removed - Keep a decent indexation.
GST should be 0 - for ready or under construction properties.
Also capital gains tax exemption if you buy another property etc should be removed - Keep a decent indexation.
