Regionalism is about being conscious, responsible and taking ownership.

If I exclaim, "I love Assam", it may sound jingoistic, but it is actually about being conscious, responsible and taking ownership of Assam in my personal and social capacity.

In one of my FB post which said, "Oil India Limited is a Navratna PSU with its operational headquarters in Duliajan, Assam. It pumps out crude oil of Assam. In 2013-14, it paid Rs. 1786 crs to Assam state exchequer whereas it paid more than double, Rs 4154 crs to the Central Govt. Is that acceptable?", I had received two comments which prompted me to write this blog piece.

One comment read, "Yes it is. Did the state govt. provide any logistical or administrative support to the organization when required? apart from staging protests and halting the functionality of the organization for week thereby contributing to the loss of the company and nation at large, what is the role of the state? the company is only sought when the state requires money for any event or institution. what about all other CSR activities? Resources are always a property of the nation, not state. This regional approach is never justified. I have a single question, what is the state contribution for upliftment of the company till date?"

The other comment read, "Lets put it in a different region. Mumbai pays more income tax than any other region in India. Does it make sense that it has dirtiest streets, narrowest roads?"

Let me take this discussion in points to create a context for the debate and for easy understanding of what I would like to convey. 

1st Point

History is written; and policies are made or influenced by the powerful and the rich. To be powerful and rich, there are external and internal factors. Let me define external factors as location, resources, climate etc and luck. Let internal factors be the people, its culture, its traditions and traits. 

It is pure luck that Gujarat, West Bengal, Maharashtra etc had external factors like ports (sea face) which led to intense social and business interactions that normally leads to development. It is pure luck for Bengal that British decided to make Calcutta the Capital of India for 150 years and developed a small fishing village into a bustling city. In a letter to the Earl of Crewe, Secretary of State for India, Hardinge pointed out that it has "long been recognized to be a serious anomaly that the British governed India from Calcutta, located on the eastern extremity of its Indian possessions." Similarly, it was fate that they shifted the capital to Delhi and which made North India the political power centre after the Independence of India. 

In contrast, it was bad luck that Burmese army plundered, looted, killed and raped Assamese women at a time when the 600 year old Ahom Kingdom was at its weakest point. According to Hindu mythology, 12 years is a 'Yug'. Assam had the most tragic and destructive yug between 1814-1826. It was a period of complete mayhem and destruction of not only properties but the confidence of the Assamese people. Assam had become a land of corpse - a massive funeral ground. The population in 1826 was less than one-third of the population in 1766. The confidence was further shattered by the Britishers bringing in large population of Bengali officers. The official language of Assam became Bengali for around 4 to 5 decades. To make matters worse, Assam and the NE became part of Indian Union after independence, and it effectively made Assam a remote part of India in one far corner next to China. Geographically it became challenged in terms of the power centre being in Delhi. The confidence that broke during the dark 'yug' was further trampled during the British rule. It never got the chance to rebuild in the Independent India.

Lot of us blame the internal factors like lack of leaders, lazy character, 'kekura mentality' etc. for the current state of Assam, and we don't bother to look at the external factors and history. 

To cut it short, Assam has gone through tremendous tough times, and it will take at least a few more decades to come back to track. Effectively and obviously therefore, history and policies are not written in favour of the people of Assam. There are umpteen instances of exploitative decisions and non-decisions that have continuously pushed Assam backwards. Be it the tea industry which had the auction centre in Calcutta, the Oil industry which supplied sweet crude to Barauni refinery, the non-existing petrochemical industry inspite of being the first region to discover crude oil, the education sector which could establish only 25 institutes when Andhra Pradesh could establish over 800 institutes, the fisheries industry which imports fish when we are ourselves rich in water bodies and the agriculture sector which has failed to leverage the tropical climate of Assam that produces joha rice, different citrus fruits and many other export friendly crops.

2nd Point

Depression is a vicious cycle, as we have seen in the Great Depression of 1930s. Lack of growth leads to lack of opportunities which leads to lack of growth. Lack of opportunities lead to a lot of socio-political and economic evils. Extremism and 'chanda' culture are two of those evils. If Assam had a petro-chemical economy, or an industry in every small town, we wont have had those two evils. 

Even popular media acts as a stimulant to depression. It thrives on negative news. Instead of analyzing the reason behind the closure of the BigBazaar store in Tinsukia, it will declare that the reason is excessive ransom and 'chanda'. I wonder if Assam knows that Big Bazaar stores were shut at Bangalore, Kharghar, Sangli, Ujjain, Pune, Kolkata, Gwalior, Jabalpur, Indore and Ludhiana, along with the Tinsukia store in the same year. Kolkata is a small high volume trading hub and everything under the sun is already available in near whole-sale prices in walkable distances. It is like one mega Big Bazaar. Big Bazaar therefore couldn't offer any solid reason - USP for its existence.

Corruption is another bi-product of depression. Any region with signs of depression has debilitating corruption. There are lot of factors in a depressed economy which leads to corrupt ways to benefit for livelihood. 

So, it is crucial that we understand that Assam is going through depressionary forces and we all have lot of responsibility while loving Assam.

3rd Point

The development and livelihood of a village or a set of villages with common traits (or Assam) depends on the natural resources in the region, the skills required to utilize the same natural resources. Trading of those goods and services with other regions and villages comes later. Secondly, the environmental and social impact of utilizing natural resources directly falls on the community around the natural resource. Therefore, it has been debated and agreed in various forums that the ownership of natural resources is with the community and the people living in the region where the natural resource is present, and not with the state. 

Although there is no comprehensive legislation in the Indian constitution defining natural resources and its protection, the Supreme Court on its 2G spectrum case said, "Natural resources belong to the people but the state legally owns them on behalf of its people".

Legality is nothing but some rules made by the people with decision making powers and hence can be changed. Across the globe, a similar stand is maintained that natural resources belong to the community, and decision making should be decentralized. So the first right of use and of benefit of natural resources should lie with the community. The taxes and revenues should primarily go to the state government. We may in fact think about community level administrative units and budgeting conditions where the primary benefit goes back to the bank accounts of the communities which have natural resources.

Let me give an exploitative instance to prove how important it is to have ownership and knowledge about our own natural resources. In 1948, the centre sold a metric tonne of Assam's crude oil at Rs. 1382/-, of which Assam received Rs. 61/- only as royalty. As taxes, the central government received Rs. 532 and gave Assam Rs. 131 out of it !!

4th Point

Oil India Ltd. is a Navratna PSU and the Government of India owns 68% of the shared capital. Owning it constitutionally is the only contribution of the central Government. It is a Navratna because of its employees and the location of its operations. Nano plant could not survive in West Bengal, but Oil India has flourished in Duliajan, Assam. The state Government has no role to play, or to contribute apart from giving land and have a favored policy environment. Both these functions are being done by the state without hassle. OIL is not a charity organization for whom Assam state government should have a budget allocation. Also, there is no logic in saying that the state stages protests! The protests, if any are staged by various labour unions and other socio-political organizations which the state machinery helps control and mitigate. It is not a unique phenomenon in Assam, as is evident from the Nano example.

In terms of community work, every company has a budget for community work. Even private companies like TATA and Mahindra have a budget for CSR work. So OIL providing for its community is a mandated budgetary provision applicable to all companies. It is irrespective of where the company is located. So the standard of living in and around Duliajan, Bongaigaon, Numaligarh etc. are better than the other parts in Assam. Imagine if Assam had more such industries... if Assam had at least, enough refineries to refine its own crude oil production?

5th Point

I am too tiny to really worry about Mumbai whether it has development spends commensurate with its tax contributions to the central government. The small fact is that the Bombay Municipality budget is around 28000 crores and perhaps the highest in the country for any municipality.

My major worry is the polarized development centered around Mumbai and the metros creating a devastating brain drain from the other states of the country. The present day brain drain from Assam to these metros is perhaps more devastating the Burmese plunder and British rule. The Brits created industries, jobs and an economy in Assam that brought in migrant labours to Assam, primarily the Bengali and the Maruwari population. For sure, the qualified local Assamese also got benefitted then. Today, the trend is reversed. There is no job creation that is happening in Assam anymore. Many public sector undertakings have closed down, and private enterprises are too few and far between.

6th Point

If British rulers could see opportunities in Assam, why can't we? They created a cash crop (tea) and two mineral industries (coal and oil). It is been almost 7 decades that we have not created another cash crop, another industry, another trade opportunity. For instance, Assam is considered the home of citrus fruits and especially robab tenga (pomello) and can easily become an export hub. Assam can be a bamboo hub, a rice hub, a food processing hub, a tourism hub and many more such hubs. But we are a far away state in one remote corner invisible to the central government for development. So it is obvious that we are being exploited of whatever industries British had shown the potential for. Over two-thirds of the Assam's oil production was refined outside of the state, depriving the state of crores of rupees as revenues and taxes. Natural gas is one of the bi-product of oil exploration and Britishers had not developed any industry to use this natural gas. Quite obviously the central government has also not cared to develop any use of the same. As per 1992-93 data, 56% of the natural gas was flared off. We wasted over Rs. 30 lakhs worth of natural gas everyday.

Conclusion

Enough has been written about exploitation of inconsequential states like Assam by the Central Govt. and there is no guarantee that exploitation wont continue in the Modi regime. There is a huge task for every Assamese and for everyone who love Assam. The first responsibility is to read Assam's history and Assam's wealth to understand the current state of affairs without really referring to popular media. The second responsibility is to share the knowledge and help Assam know the real problems. The third responsibility is to try to find solutions in our individual capacities.

Regionalism is not about secessionist agenda. Regionalism is about being aware of our region, its people, its natural resources, its skills, its culture and is about a passion and dedication to help develop the region.

Let us all love Assam and bring back its glory days in the world map. One day, Assam will be a developed state known in the world politics and economy.

Abolising Taxes.. Arthakranti Proposal of an alternate Government revenue model

Today I received an whatsapp message about an organisation called Arthakranti Sansthan, which is proposing an alternate to the existing financial governance for the country. The message can be read at the end of this blog post.

Normally, I do not read long whatsapp forwarded message but this message had a line that attracted my attention. It said, "Scrap all 56 Taxes including income tax excluding import duty". 

From the day, I have become an entrepreneur, taxes have been a big hindrance to my business model in terms of maintaining accounts and paying taxes. The current tax structure is simply too complicated. I believe we should pay taxes and contribute to the overall growth and development of the country. However, it was an easy belief system till the day I worked in the corporate world of TDS, where tax is deducted by the company giving you absolutely no trouble in terms of paying your taxes rightfully.

After I have started my business, taxes have been my biggest hurdle. At one end, I simply can't forge and evade taxes. At the other end, paying tax rightfully is a complete pain in the ass. For instance, I have not met a single sales tax consultant who is willing to accept my proposal of paying sales tax rightfully every month. They all say, you should not worry about taxes till your business gets an annual revenue of over a crore. We will manage your taxes (by evading it and bribing the sales tax officials).

So a proposal of an alternative tax structure was a dream come true for me. I continued reading the Whatsapp message. It had a list of FIVE point of actions:

1. Scrap all 56 Taxes including income tax excluding import duty.
2. Recall and scrap high denomination currencies of 1000, 500 and 100 rupees.
3. All high value transaction to be made only through banking system like cheque, DD, online and electronic.
4. Fix limit of cash transaction and no taxing on cash transaction.
5. For Govt. revenue collection, introduce single point tax system through banking system – Banking Transaction Tax (2% to 0.7%) on only Credit Amount. 

As a banker (a decade of banking experience), I would say that it is a great long term idea that can change how a country is run. It will be perhaps the first idea of governance that India has not borrowed from the West. Even our constitution is a borrowed cut and paste job!

From a consumer perspective, the head-ache of paying taxes and the guilt of not paying taxes will completely go away. Whatever money would come to the bank, 2% (or less than that) would be automatically taken out. The accounting hassle will lie with the bank and they have the talent to do the same.

The decision to scrap the higher denomination currencies is also a great idea to discourage cash transactions. It will increase card based transactions at shops and other business establishments. I would be saved of the hassle of going to the bank to deposit cash standing in a queue. I would be saved of the hassle of giving change back to the customers.

For the Government, there will be those fews banks to reconcile the revenue collection.

No taxing on cash transaction is also a boon for the poor. Although it sounds like a double edged sword benefitting the cunning businessmen and the capitalist as well, yet I would support any policy that will primarily help the poor in their day to day life.

One of the most corrupt departments in Assam is the Sales Tax Department. This new model will completely stop departmental corruption at the tax collection level. It will also stop other kinds of corruption which mainly survives on cash transactions. Without high denomination currencies, under-the-table cash transactions will be severely affected.

Having said all that, I have one point of discussion. I believe that all policies should aim for an egalitarian society for peace and prosperity. It should try to create greater or equal opportunities for the poor as well. As we know that India is corrupt, not because our rules and structures are weak, but because our conscience and dharma allows us to become selfish and corrupt, so it is pertinent that this new taxation model should not have loophole for the rich to become richer by evading taxes.

For instance, I am not doubting that banking penetration can be increased and every citizen will be part of the banking structure in the future. I am doubting our mentality to evade taxes and therefore will always carry on cash transactions avoiding taxes completely. Even if the Government put a limit on cash transaction (say Rs. 2000), will that stop the citizens to carry out cash transactions?

One thing is certain that it will help the small businesses who earn less than Rs. 2000 a day. We surely have a huge percentage of people living in that kind of earning per day across the country. The moot question however is whether it will stop economic polarity, the difference between the rich and the poor, the difference between the haves and the have nots.

Whatever said and done, a large scale national debate should start on this idea and quick actions should be taken by the Government.


WhatsApp Message:

Mr.Arun Bokil , one of the key member of Arthakranti Sansthan was given time to share to PM Modi before recent election. He was given 9min for sharing but Mr Modi heard him for 2 hrs.

“Arthakranti Sansthan” is an Economic Advisory body constituted by a group of Chartered Accountants and Engineers. Arthakranti Proposal is an effective and guaranteed solution of Black Money Generation, Price rise and Inflation, Corruption, Fiscal Deficit, Unemployment, Ransom, GDP and industrial growth, terrorism etc.

“Arthakranti Proposal has FIVE point of actions simultaneously.

1. Scrap all 56 Taxes including income tax excluding import duty. 
2. Recall and scrap high denomination currencies of 1000, 500 and 100 rupees. 
3. All high value transaction to be made only through banking system like cheque, DD, online and electronic. 
4. Fix limit of cash transaction and no taxing on cash transaction. 
5. For Govt. revenue collection introduce single point tax system through banking system – Banking Transaction Tax (2% to 0.7%) on only Credit Amount 

Important Points to note:

1. As on today total banking transaction is more than 2.7 lakh crores per day say more than 800 lakh crores annually.
2. Less than 20% transaction is made through banking system as on today and more than 80% transaction made in cash only, which is not traceable.
3. 78% of Indian population spend less than 20/- rupees daily why they need 1000/- rupee note. 

What will happen if All FIFTY SIX Taxes including income tax scrapped :

1. Salaried people will bring home more money which will increase purchasing power of the family. 
2. All commodities including Petrol, Diesel, FMCG will become cheaper by 35% to 52% .
3. No question of Tax evasion so no black money generation.
4. Business sector will get boosted. So self employment. 

What will happen if 1000/ 500/ 100 Rupees currency notes recalled and scrapped :

1. Corruption through cash will stopped 100%.
2. Black money will be either converted to white or will vanish as billions of 1000/500/100 currency notes hidden in bags without use will become simple pieces of papers.
3. Unaccounted hidden huge cash is skyrocketing the prices of properties, land, houses, jewellery etc and hard earned money is loosing its value; this trend will stop immediately.
4. Kidnapping and ransom, “Supari killing” will stop.
5. Terrorism supported by cash transaction will stop.
6. Cannot buy high value property in cash showing very less registry prices.
7. Circulation of “Fake Currency” will stop because fake currency printing for less value notes will not be viable. 

What will happen when Banking Transaction Tax (2% to 0.7%) is implemented:

1. As on today if BTT is implemented govt can fetch 800 x 2% = 16 lakh crore where as current taxing system is generating less than 14 lakh crore revenue.
2. When 50% of total transaction will be covered by BTT sizing 2000 to 2500 lakh crores, Govt will need to fix BTT as low as 1% to 0.7% and this will boost again banking transaction many fold.
3. No separate machinery like income tax department will be needed and tax amount will directly deposited in State/Central/District administration account immediately.
4. As transaction tax amount will be very less, public will prefer it instead paying huge amount against directly/indirectly FIFTY SIX taxes.
5. There will be no tax evasion and govt will get huge revenue for development and employment generation.
6. For any special revenue for special projects, govt can slightly raise BTT say from 1% to 1.2% and this 0.2% increase will generate 4,00,000 crores additional fund!