Wednesday, January 15, 2020

Find the resources from within the Country through improved administration.

The $5trillion economy aimed at and to be achieved by the year 2025 is a huge task and the wherewithal to find the financial resources from within and outside the country to take the economy from its  unusually slow pace and put it on fast track poses a major challenge by any standards based on the unimpressive fiscal resources of the Government, dwindling national gross savings and the lendable resources of our entire financial system which is unfortunately saddled with bad loans and lack of avenues to plug the loopholes of loot in innovative ways. No right thinking person can deny that the country has no potential in terms of talent and all sorts of resources in terms of Land, power, labour, natural resources and capital both in monetary and non monetary form needed to support the growth but unfortunately the readiness to exploit the resources through reforms and meaningful and result oriented Governance standards has been found to be elusive. Rhetoric pronouncements are very encouraging but they have to be pursued vigorously and implemented in letter and spirit to bear the fruits and bring the intended benefits for all to enjoy the fruits.         
The Fiscal deficit which is kept with great difficulty under control at around 3.3 % of GDP can definitely be stretched a little more to justify productive investments with tight control on extravaganza by any chance and enhance the physical infrastructure. The recent announcement to develop the infrastructure by $ 102 trillion is a welcome step and definitely very bold and commendable provided the plans get implemented fast with the Cooperation of the State governments and active involvement and participation by the private investors. This is the ideal time to fix the problems in raising the resources through incentivised savings, monetising the resources like gold, waste lands, and plugging of all possible loopholes now available to evade all sorts of taxes including GST , Income Tax, stamp duties, through creative accounting practices of all kinds practised in all types of transactions in and around the country, widening and deepening the capital market particularly the debt market through retail marketing of bonds including the masala bonds issued abroad and strengthening the take out Financing which has not taken off for  valid reasons. The informal economy continues to grow strong in innovative ways with and without the support of the authorities paving ways for tax evasion and without accounting for the computation of GDP, employment and being amenable for any Governance.
Huge number of farm lands and clubs, shops and establishments with and without licences, religious trusts, temples, churches, mosques and all forms of charities and NGOs in and around the country are engaged in different economic activities and services but to what extent they contribute to the economy and account for their activities in terms of production of goods and services, tax payments, generation of employment etc, cannot be satisfactorily  assessed is a fact leaving a huge hole in the economy’s over all data compilation and leakage of income. Such a list is very long and unending but huge money is involved cannot be disputed. This needs a very serious attention and follow up action to raise resources of the Government at this crucial juncture.
Banking system is the life blood of commerce and also the nerve centre to provide the life support system to the entire economy and the need to have an efficient system free of corruption, loot and to act as a harbinger of ups and downs in the economy through capturing vital information on the movement of funds, end use of funds, and generation of wealth in the economy among institutions and individuals in monetary terms is paramount at this crucial juncture when the Government is placed in a catch 22 Situation to put the economy in fast track and augment the resources from within the economy but scattered all around without any trace. As bankers’ bank and Regulator of the entire financial system along with SEBI, PFRDA and IRDA, the Reserve Bank of India as an Internationally Recognised Central Bank of the country for its professionalism has a major role to play with adequate autonomy but with full accountability to the parliament ensuring that the Financial system delivers with conviction and full transparency on the sound performance of the Industrial, agricultural and services Sector. Monetisation of non-monetary resources like Gold, Silver, idle assets scattered in different forms is the need of the hour and identifying nonperforming Assets in whatever form they may be and converting them into performing assets through conduct of surveys, guidance, support with a missionary zeal need focused attention and meaningful result oriented action from the Reserve Bank.
Real Estate and all related deals like purchase, sale, lease, rentals etc continue to generate black money in different parts of the Country and the only way to eliminate black deals is to tie them through bank accounts. Without the involvement of banks, no real estate transaction of any kind irrespective of the amount involved can take place should become a law and the necessary administrative mechanism should be in place to ensure that no transaction gets escaped from banks. There should be proper tie up of Registrars, banks and parties involved in transactions. Initially the tie up can be made obligatory in Metropolitan and Urban Centres insisting on Aadhar and Pan Numbers. Information Technology can be put into optimum use. Stamp Duties and other related expenditures, tax etc should reflect separately in the deals so that evasion of taxes and generation of black money can be to a great extent minimised though not totally eliminated at least to start with.
Lots of unauthorised shops and business establishments operate throughout the country with and without the aid of formal and informal financial system and they are the main sources of black money, corruption, evasion of GST, exploitation of labourers and practitioners of all imaginable and unimaginable unethical ways of doing business. Likewise, lots of commercial activities do take place in large metropolitan and urban Centres even without any name boards or formal appeals but taking advantage of social networks and laxity of any regulatory or supervisory mechanism or even the feel of presence of authorities. They largely deal in cash and do not seem to be figuring in any sort of data on employment, income or services etc.
It is time now to involve people from all walks of life in the development of the Society and the Economy through enhanced and effective administration and transparent accountability for all types of economic and commercial activities for creation of wealth and its equitable distribution ensuring welfare for all. The Resources are available but needed to be tapped and accounted for.


Dr T V Gopalakrishnan                                      

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