Nothing about this sounds practical! 🧵
1. No statutory liability for companies to declare any dividends even if there are profits. This will leave govt. on the mercy of companies if they wish to give any share of profit whereas Corporate tax is statutory payment and is certain.
1. No statutory liability for companies to declare any dividends even if there are profits. This will leave govt. on the mercy of companies if they wish to give any share of profit whereas Corporate tax is statutory payment and is certain.
https://twitter.com/keshavbedi/status/1959308486463865221
2. Currently Govt. acts as Regulator role via MCA, SEBI etc. If it starts holding stakes in the companies acting as owner, there will always be a case for 'Conflict of Interests' as govt will be both owner and regulator. Seems like a better option. Right?
3. Your case for a system that would not require CAs, CS and firms like BIG 4s not adding value ignore the whole point. Even the profits you want to declare dividends from require audited financial statements which BOD refer to make decisions.
4. How will you classify which companies govt. should have stakes in? Based on listing, valuation, sectors or worst all of them. It would be a financial blunder if they want to buy their stake in these companies, taking it free of cost will be worse.
Businesses would be forced to shift overseas. Foreign investors, Private Equity and banks would also avoid investing in such companies. Worst of all, it will enable influence of 'Babus', their inefficiencies and corruption in private entities too. More bureaucracy and less work!
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