Wishlist for our FM

 

The New Finance Minister Pranab Mukherjee has taken Over, and The Rupee Blog is proud to submit its Wishlist to the New FM :-

 - Don’t impose any New Taxes, we already have enough of them. The Old FM – Mr.P.Chidambaram had already burdened us with the Fringe Benefit Tax(FBT), a Tax which was unliked across Indian Business and Industry. So please don’t do the same mistake.

 - Small Scale Industry: In India, being small is rewarded by the Government and Being Big is penalised. Small Scale Industries get a Central Excise Exemption upto Rs. 1.5 Crores and this forces them to remain small. This figure is too low in the 21^st Century Indian Business Context and I know many Small Scale Industries who wish to remain small within this Rs. 1.5 Crore Limit because they do not want to grow and come into the Central Excise ambit. The Previous FM Mr.Chidambaram revised this figure only once by increasing it from 1 Crore to 1.5 Crores. But 1.5 Crores is too low and there is fit case for SSI Exemption to be raised multifold. So Minister Saheb, Please increase the SSI Exemption Limit to 12 Crores p.a against the Current 1.5 Crores.

 - Please bring about a Policy Shift towards Lower Interest Rates. In the Previous UPA Government you had pressures to keep the Bank Deposit Rates for FDs high due to political compulsions. And because the Deposit Rates were High, The lending rates had to be kept high. Due to which Indian trade and commerce could not borrow at lower interest rates. Our bank lending rates are one of the highest in South East Asia. Please break this vicious cycle of High Deposit Rates and High Lending rates and usher in an era of Lower Interest Rates.

 - Currently while Paying TDS Online using CHALLAN NO.ITNS 281 we have to file a Separate Online Challan for every category of TDS Deducted and further a separate Challan for Company as well as Non-Company Deductees. So for each category of TDS Deducted we have to fill the form and enter the banking gateway all over again. Thus if you need to deposit TDS under 10 Categories you need to do this 10 times. I request the FM to make this Online Filing slightly simpler by having the option of various TDS Deduction Categories on a single page enabling the user to pay the TDS for all categories in one go by entering the banking gateway only once.

 - GST: The UPA Government is committed to getting GST from April 10th 2010. Hence if you are really serious about the deadline, now is the time to get the Draft Laws, Tax Rates, Procedures into the Public Domain to enable people to understand it. Rather than have closed door contemplations over the drafts, please immediately make available to the public the proposed form of legislation for GST in India.

The Grass is Always Greener…

 

 

 

 

As I was driving to work yesterday I noticed something in Jayanagar that amused me. On my way to office I used to come across a Chemist/Druggist Store. I wouldn’t like to name it. But let’s call “PNP” for short. It was about 4-5 years old and was fairly successful. I used to buy medicines from there sometimes and I recognised the owner well. Yesterday I noticed it had changed its name. The Abbreviation of the new name was “CDG”. I walked in to “CDG” to buy some medicines and I noticed a new man at the counter. He introduced himself as the new owner and said that the old owner decided to sell the business to him as he felt there was no money in retailing medicines. He told me that the old owner thought it was the Pharma Companies that made all the money and he as a retailer was left with the headache of keeping inventory and selling all the stuff. 

Just 10 minutes later, a few blocks away in a different corner of Jayanagar I witnessed a Brand New Chemist and Druggist Store being opened with a Big Board and a Big Retail Shop Frontage. The name was “Religare Wellness”.

 Religare is a company promoted by the same promoter group who once owned a majority stake in the Indian Pharma Company – Ranbaxy. A few months back the promoters sold their Majority Stake in Ranbaxy Pharmaceuticals to the Japanese Pharma Company – Daiichi. After exiting their Majority Stake in Ranbaxy, this former promoter group of Ranbaxy is known to be now concentrating on the investments made by its other firm Religare. Religare has promoted ventures in Mutual Fund Business, Asset Management, Insurance, etc. I was surprised they decided to enter into a Chain of Drug Retailing Stores. After all these were the same people who sold Ranbaxy to Daiichi . And today they are entering into the Drug Retailing Business !! Maybe they realised there wasn’t much value in manufacturing pharmaceuticals and thought there was more value in Retailing medicines!!

 Amazing I thought, one business shuts shop because he sees No Value in Pharma Retailing because he thinks the Pharma Manufacturers make all the money. And a Big Pharma Giant Promoter sells his stake in the Pharma Manufacturing Company and decides to invest in a Pharma Retailing Venture !!

 I remember a Jeffrey Archer short story from the short story collection “To Cut a Long Story Short” which had the title “The Grass is Always Greener…” which epitomised the saying The Grass is always Greener on the Other side of the Fence

Joke on Business,Taxation etc. – 1

A young businessman had just started his own firm. He had just rented a beautiful office and had it furnished with antiques.
He saw a man come into the outer office. Wishing to appear the hot shot, the businessman picked up the phone and started to pretend he had a big deal working. He threw huge figures around and made giant commitments.

Finally he hung up and asked the visitor, “Can I help you?”

“Yeah, I”ve come to activate your phone lines.”

Bharat Ratna for Magician Dr.Manmohan Singh

Dr.Manmohan Singh is back and is back with a New Andaaz.

I seriously think PM Manmohan Singh is no ordinary mortal. I am sure he has some Magic Wand with him which he uses to up the Economic Sentiment in the Country. The 2000 Point Sensex Jump on 18th May 2009 is just one example of his Magic. But the Bigger Magic is the sheer upsurge in Economic Sentiment across sectors. Whether Small Business, Big Industry or any stakeholder in Indian Business, Everyone today is More Positive about the Economy than ever !!!

His Magic Wand worked in 1991 with Liberalisation that led to an Unprecedented Leap to the Indian Economy, His Magic Wand worked again From 2004-2007 when the Indian Economy witnessed its Greatest Economic Boom ever. And now the Magic Wand is all set to give even Harry Potter’s Magic Skills a complex. No Indian has escaped the Magic of his Wand in the last 15 Years!!

 I strongly advocate that Manmohan Singh be given ‘BHARAT RATNA’ for his Enormous, Grand, Big and Illustrious Impact on the life of every Indian!!!

What is GST in the Indian Context?

GST as the Abbreviation suggests is a “GOODS AND SERVICES TAX”. To Understand  GST we need to understand the current taxation of Goods and Services in India.

India has a Federal Setup. i.e the Union Government(Central Government) has some taxation powers and the States have some taxation powers. The Union Government(Central Government) imposes many Direct and Indirect Taxes. Direct Taxes are Taxes like Income Tax and Indirect Taxes are Taxes like Excise Duty(also known as CENVAT. It is a Tax on Goods Manufactured in the Country) , Service Tax(Tax Imposed on Services Rendered) , Customs Duty(Tax Imposed on Imported Goods). The State Governments impose Indirect Taxes like VAT (Value Added Tax, i.e a Tax on Sale of Goods), State Excise Duty on Liquor, Luxury Tax, Entertainment Tax.

In Theory(I repeat, In Theory) , GST would be a Tax that would bring All State and Central Indirect Taxes on Sale of Goods and Services into a Single Tax. But this is easier said than done. This is only in Theory. Because India being a Federal Setup wherein States impose VAT on Sale of Goods and the Centre imposes Excise Duty on Manufacture of Goods. So in theory GST would be a Tax that combines Excise Duty, Service Tax and State VAT into a Single Tax. But due to the Compulsions of India’s Federal Setup this is not possible.

Hence the Current Proposal is to introduce 2 Different GSTs. A CGST(Central GST) and a SGST(A State GST). The CGST would bring Excise Duty and Service Tax under its fold and the SGST would bring VAT under its scope. The SGST would also empower States to collect GST on Certain Services.

This is the Proposed Form of GST Legislation as discussed in the media. It requires lot of Legislations at State and Central Levels including Constitutional Amendments to put this into Action. Moreover it requires Political Will on part of our New Vibrant UPA Government in its Second Avatar. It is interesting to see whether this would be possible in 2010 or not ?

The Red Flag Falls !!!, The Flag of Economic Growth shall Flutter Again !!

With a Businessman’s eye view on the 2009 Lok Sabha Election Results, I rejoice about the fact that the Red Flag has fallen. The Communists with their Anti-Economic Agenda were against the Economic Path of Progress of the Country. In the name of their so called egalitarian policies they hampered economic growth at all levels. They Opposed the Nuclear Deal on their Narrow Ideological Grounds which would bring Electricity to a Power-Starved Nation. For decades they put Kerala and West Bengal on the economic backfoot due to their Trade Unionist Agendas. And today in their Bastions: Kerala and West Bengal they have been shown the Thumbs Down. With A Stable Political Government now in sight ,  The Flag of Economic Growth in India shall Flutter Again.

Just 1 Man and 1 Cupboard !!

On a visit to China 2 years ago, I visited a factory in the Guangdong Province that made Computer Tables. It was a Factory Spread over 1 Acre of land and employed over 350 + Employees. It was a typical Family run Chinese Small & Medium Enterprise Factory setup in the last decade amidst China’s great economic boom. After our Business Talk we walked around the factory and saw a Huge Production Line with its sweating workers and gurgling machines, a Planned Loading and Unloading Area, a Small Conference Room to Interact with Customers/Business Associates and a Mess Type Eating Area for the Staff. But there was something which appeared to be missing. The Missing thing was a dedicated department for keeping accounts, filing files, maintaining statutory records. Such a thing was non-existent. When we enquired with the Owner about where is the department to maintain accounting records and paper work , he just pointed to 1 Man sitting on a Table with a Cupboard behind him. In India if a Factory were to Employ 350 People and be a Manufacturing Unit dedicated to Export, a Factory would need at least 5 full time employees in a Dedicated Department for Accounting, Documentation, Paperwork etc. Employing 350 People would require maintaining a multitude of Records, Paper work and Files related to Accounts, ESI, PF, Banking, Export Incentives, Labour, Corporation, Power etc which would need at least a Small Store Room. But the Chinese can do this with 1 Man and 1 Cupboard. It’s a Strange Reality but True !!!

GST: India Needs It !!!

GST: Goods and Services Tax is proposed to be introduced in India from 2010-11. There are a lot of myths, fears, misconceptions about what is GST and what will be the proposed form of GST in India. Columnists in Pink Papers are writing about it, Businessmen are discussing about it in Boardrooms, Some Business Families are even discussing it on their Coffee Tables and Dinner Tables, Chartered Accountants and Tax Consultants are searching the Net to find Info about it, Backdoor Drafters of the Law have begun drafting drafts of the legislations.

I strongly beleive that GST is a Tax that India really needs to get . On this Blog, we will keenly follow the GST Story in India and in days to come I will get info about understanding GST and its proposed form in India

Why this Blog ?

For sometime now , I had wanted to start a Blog on things I strongly feel about in areas of Business, Economy, Taxation etc.  As a Businessman doing Business in India throws up interesting challenges, problems, adventures, misadventures. And this Blog will be my forum to write about it.

Also as I surf the net, I find serious and not so serious stuff(Humorous Stuff) on Business, Economy, Taxation etc which I find really interesting and I feel that it would become even more interesting If I were to compile all this into a Blog. Hence I decided to start this Blog titled “Rupee Blog”. Why “Rupee Blog” ??? Well, It sounds Nice and it Means Business So please feel free to comment(regularly comment), read(regularly read) and subscribe to this Blog. – Gauresh Mehra