Yes, that is the kind of headline I would like to read on social media and websites on July 10, minutes after Finance Minister Arun Jaitley presents his maiden budget speech to the Lok Sabha.
There is a difference between an "Indian economic boom" and a "true Indian economic boom".
Let me explain.
Ram Rajya and beyond...
The "Indian economic boom" is what we had from 2004 to 2009 - the years that were driven by government policies of the UPA Version 1.0 and Version 420.
This boom was a boom of numbers, the one that kept the Planning Commission and various economists in great demand at conferences like Davos and seminars organized by global media houses where bubbles are assumed to be a reality.
This "bubble boom" basically:
In the true Ram Rajya, where every Hindu - remember, Hinduism is a philosophy and not a religion - is invited to make India their home, the leaders work for the good of their subjects: the elected remember that they have been chosen to represent the broader interests of society.
- Transferred wealth from the national exchequer to a few industrial families by funneling scarce national and natural resources to them. Coal, iron ore, oil and gas, real estate, spectrum were gifted to a favoured few.
- Contributed to the surge in the property prices in Singapore, Dubai, London, and New York spurt as some of that favoured wealth found its way to buy homes in these global cities; the price of owning a cricket player or a private jet also surged in this era;
- Left the middle class caught in a trap of high consumption expectations paid for by higher personal debt to fund an inflated cost of living; basically stuck in a traffic jam with potholes as the "lal batti" cars went roaring by;
- Boosted incomes for the poor due to NREGA and other schemes but left them to deal with increased corruption, inadequate infrastructure, and little training for a better future
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In such a Ram Rajya, GDP has little meaning. The overall wealth and happiness of a society is sacred. Bhutan, our neighbouring sovereign state, is always ranked high on GHP - Gross Happiness Product.
Note that the first trip made by Prime Minister Narendra Modi was to Bhutan.
A believer in studying successful models, Prime Minister Modi, wants to emulate Japan on their railway networks, China on how it grants quick approvals for projects, and Bhutan on the final cocktail of GHP.
Finance Minister Jaitley is the trusted economic lieutenant of the Prime Minister. Given his astute legal mind with its penchant for facts, his first-hand knowledge of the unreal from the liberal use of aircraft supplied by miscellaneous supporters during the recent election campaigns, and his exposure to the game of cricket with all its shenanigans and power mongering, Finance Minister Jaitley has taken the cue from Prime Minister Modi and decided to give India a clean break from its recent past.
Supporting his brilliant analysis is the statement from Ashok Chawla, the Chairman of the Competition Commission who recently said, "The fundamental objective of Competition Law is to promote and sustain market competition as its rationale lies in the proposition that competition yields social benefits and therefore needs to be nurtured. The process of competition is, however, not automatic, as vested interest groups, incumbent monopolistic firms, collusive businesses and other stakeholders may distort the process of competition or capture the benefits of market-oriented economic reforms,".
Nine steps to Nirvana
And so, with this background, Finance Minister Jaitley's budget speech will:
The ingredients for a "true Indian economic boom" are actually very simple and can be described as the 3 C's that you may hear at any chai pe charcha:
- Restrict the growth of India's 100 largest business groups. They will no longer be given any more approval or capital to expand their businesses;
- Reversing the ridiculous mantra that "Big Is Beautiful" adopted by regulators like SEBI and IRDA, Finance Minister Jaitley will encourage the creation of regional or city-centric insurance and banking companies and put in place limits on market share - the danger of having large financial firms has been seen globally; this will nurture local competition since many more people have the capital to compete at a local level versus a national level;
- In a desire to spur true entrepreneurship, all loans given to any of the Top 100 business groups by any bank will be wound down by 50% every year - the logic being that these business groups are mature and can access capital wherever they wish; the sizeable money freed up from this will be given to smaller businesses and entrepreneurs;
- All approvals for any new projects, within the above parameters, will be made by the state governments in conjunction with the district officers or municipalities where the new projects will be set up;
- There will be no divestment of PSU shares but there will be a total independence of management; all government nominees on the boards of any listed PSU will quit within one year and they will be replaced by Independent members of the Board (any individual who has been on the Board of any of the Top 100 business houses anytime over the previous 5 years will not be classified as an Independent Board; the former SEBI Chairman, Mr Bhave, will be given the role of cleaning up this historic mess and transitioning to a new system.
- Tax rates on incomes for individuals will range from zero tax (for those with incomes below Rs 5 lakh per annum) to 25% for those with incomes from Rs 5 lakh to 1 crore, to 40% rate of tax for those individuals earning between Rs 1 and 2 crore and 50% for any income above Rs 2 crore per annum; Taxes will apply to all individuals with no exemption for agriculturalists; Short term capital gains (selling an asset within 3 years) will be taxed at 10% irrespective of whether that entity is based in India or in any tax haven and long term capital gains tax will be zero;
- Companies will pay a 30% rate of income tax on reported profits - no fiddling around with exemptions that currently reduces the effective rate of tax of corporate India to a shameful 19%; being a successful lawyer, Finance Minister Jaitley is well versed with the legal loopholes that allow this "abuse of intention" to occur and he will rewrite the law;
- Lawyer's fees to fight any government case will not be treated as a deductible expense - this will limit the practice of hiring an army of lawyers to clog the system and/or delay the process of justice;
- As a corollary to the above, if any employee from any government entity or department is caught taking a bribe or even asking for a bribe or harassing an individual, they will be sent on permanent hardship duty to one of the border posts; since India is reportedly contemplating sending troops to Iraq to fight the menace of the ISIS, a one-way ticket to Iraq may also be considered for corrupt officials;
The question is: Now that a humble chai-wallah has made it to being the Prime Minister and proved the powerful beauty of democracy, will Parliament endorse what they already know in the tea stalls of India?
- Chhodo bhaiya, aur kitna paisa banaoge - doosron ko badhne do (Come on, brother, how much money do you want to make - let others grow now);
- Chhoti Sarkar, sundar Sarkar (a small government is a beautiful government);
- Chori hai barbadi (theft and corruption results in ruin).
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