Before every election all the parties vie for the attention of the voters by putting up manifestos – documents detailing the work that the party will do if voted to power. Voters should take note of the manifestos as they affect our lives. Now a days the party in power wants to cling to power at all cost and the challenging parties are often desperate to come to power as the opportunity cost of staying out of power is too high. This has resulted in the election promises going from weird to absurd – free food, free medicines, free laptops and mobile phones, regularisation of slums, free power and what not.
Today I will attempt to put forward the items that parties can promise the electorate to implement if they are voted to power. The criterion for choosing the items was simple – things which can be easily implemented but will have a profound impact on the country and will also result in winning votes for the parties -
Abolish income tax -
How much do we collect in income tax every year – 1,93,402 cr in 2011 - 12
How many people pay taxes in India – 3.5 cr (3% of population)
What is the size of the income tax department – 43,000 employees
Size of the Indian Economy – 120 lakh cr (2 trillion dollars)
Share of services in the economy – 84 lakh cr (70%)
Tax of 10% on half of service sector will yield in collection of – 4,02,000 cr (double of current income tax collection)
The government should just abolish Income tax and introduce a tax on consumption instead.
Although this math is simplistic (we already tax some services, last years taxation was 70,000 cr) the idea of the same is to highlight the potential of taxing consumption and not income. Not only is this easier to collect and monitor (at source) but it also encourages savings which are vital for a developing country like India. It is also logical as services contribute about 70% of the Indian GDP and are growing at the fastest pace in the last 2 decades (agriculture and manufacturing contribute almost equally to the other 30%)
What happens to the staff of the IT department then? They can be merged with the service tax department to handle the increased work load of the department.
Law reforms -
Court cases in India are nightmarish. Because of the huge backlog of cases (more than 3 cr court cases are pending in various courts of the country) the judicial system is unable to deliver timely justice resulting in a cavalier approach of the people breaking the laws. It took our system 17 years to sentence Lalu Prasad to a jail term for 5 years during which he was a key supporter of the UPA government. We just cannot have so much delay in delivery of justice. This one reform itself will led to the resolution of a lot of the problems facing the country today – I have covered the topic in detail in my earlier blog – “Many problems? One solution”
Police reforms -
We all know that the law enforcement agencies are in the need of a major overhaul. We as citizens can (rightly) complain that the police is corrupt and lethargic. But lets examine the issue from their point of view – they work under lots of pressure (both political and otherwise), have long working hours, don’t get too many public holidays as they are busy protecting us, have terrible working and living conditions, their stressful lives are at potential risk every day (so is everone else’s even in a simple activity like crossing a road) but for these people it is a part of their “job description” all this and they don’t get any respect from the society (fear yes, respect no). And what are they paid for all this trouble? Sample this – for Maharashtra Police the per month pay range for a sub inspector is Rs 5500 – 7000 and for a constable is 5200 – 20200 (source mahapolice.gov.in) These days many drivers in the private sector are paid more than this.
“Bhookhe bhajan na hoye Gopala” is apt here. We would be fooling ourselves if we expect them to do a great job given what they are paid and what they go through every day. Let’s treble their salaries and then demand delivery – for people who don’t fall in line the courts (after reforms) can quickly decide if someone is guilty and take appropriate action.
Bureaucracy reforms -
What is true for the police above is also true for the bureaucracy. Starting from the babus to their seniors, the entire hierarchy is grossly underpaid. So let’s treble the packages again and expect to see tremendous improvements – for people who fail to deliver there would be enough people to take their places.
Social spending heads in budget
We spend over 1,30,000 crore every year for 147 schemes (plan is to bring it down to 70 schemes this year). To name a few of these schemes – Sarva Siksha Abhiyaan (budgeted spend Rs 61,734 cr for 2011 - 12), NREGS (budgeted spend Rs 40,000 cr for 2011 - 12), Rajiv Gandhi Gramin Vidyutikiran Yojna (budgeted spend Rs 6,000 cr for 2011 - 12), Mid Day Meal (budgeted spend Rs 10,000 cr for 2011 - 12). This is a utter waste of taxpayer money and a breeding ground of corruption. How can anyone keep a track of so many schemes and their proper implementation? Let the new government run only 10 scheme and tightly monitor them – once the intended benefits are realised the other priority areas can be taken up.
River interlinking –
The earliest plan for river interlinking in India was proposed in 1972. The gist of the plan is to link the water surplus rivers of the East and North to the water deficit rivers of the West and South India. It is indeed a grand plan both in vision and the positive spin offs it can create – government spending on infrastructure will create a multiplier effect on sectors like cement, steel, capital goods, construction companies and generate productive employment for many, more land will come under cultivation, water scarcity will get solved in many areas, the waterways can be developed as an alternate way of transport, we will conserve a precious resource such as fresh water, flooding will get reduced, fishing and other activities can be created along the new rivers, power can be generated, water tables will get recharged and water levels improve in the areas where the rivers will flow from. There are too many direct and indirect benefits to ignore this project.
New ways of service delivery -
Almost everyone today has a camera phone. Thanks to cheap mobile plans videos can be uploaded and downloaded quickly. It is possible to deliver a lot of services to the people using this facility – can I upload my grievance on a website, can the citizens become the eyes and ears of the government to notify law breaking, potholes, garbage, land grab, stagnant water, bribery, waiting lists at hospitals/courts/government offices to a portal where it can be tracked and solved? Yes. Can I get the status of my requests on my mobile? Yes. Should the government start thinking of its citizens as its customers? Definitely yes.
Government landbanks –
The government holds large land banks in practically every city. Although only a few of them are vacant, most of them are occupied by crumbling structures created decades ago. There a case for redeveloping these (except heritage structures) so as to create a better infrastructure and enabling webcams, sprinkler systems and other modern office tools. Let the government make better use of its properties and the life of the people working in those structures get better.
Government hospitals -
Same applies to the government run hospitals, most of them are in a very bad shape. Let there be a massive effort to redevelop these in record time so as to provide better services to the needy. Not only the buildings but the equipments, layouts, capacity and the staff quarters. The costs of a medical problem have become so high in the past few years because of the excessive commercialisation of this industry (more of this in the next blog) that the weaker sections of the society have to depend on the government created infrastructure for the delivery of this basic necessity. Let there be more people who can avail of this service and the quality of the delivery improve.
Agricultural produce movement -
In India the agricultural and farm produce cannot freely move across the country due to a law passed in the 1954 (called the APMC act) which gives the states the power to create mandis and decide who can participate in them. It also forces the farmer to sell their produce in these mandis to middlemen. The 5 – 6 layers of middlemen that the goods pass through ensure that the good sell at least 3X the price of what they are bought from the farmers. While the states have been protecting the middlemen and the traders for decades now, never before have they been so brazen in hoarding goods and creating artificial scarcity and benefiting from the price rise (like the current case of onion prices). In the name of protecting the farmer the government is hurting both the farmer and the consumers. Today when goods can move freely across the worlds, why restrict their movement within the country, especially when the inflation rates are so high and hurting everyone?
Although the list can be much longer, I chose to focus on the high impact items here that are also vote catching. I am hoping that most of these items are a part of the agenda of the party that aims to form the next government.
Next week – medical industry – what went wrong and what can be done.