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Overhauling Indian Budget Exercise

Every year the union budget raises expectations around tax “relief” to individuals and companies. Once presented, it leaves a sense of dejection. Television debates add to the frustration of the “honest tax payers” and next day’s newspapers spoil the taste of the morning tea/coffee, because the tax payers agitatedly exchange angry notes at home, buses, metro and offices. They make a very valid point: why should the TDS tax payers alone carry all the burden of rising prices, stagnant incomes, low returns on investment and erosion of guaranteed returns on instruments like the Public Provident Fund, which has slid from 12% to 8% in the last 10 years? They feel unfairly dealt with in comparison to the tax evaders leading a luxurious life upturning all financial logic. A person plans for “the future’, an average span of 35 years of his employment career, and chooses the instruments of investment accordingly. If his savings start losing returns like this within 5 or 10 years of his career, his frustration needs to be appreciated. Otherwise it would motivate him to turn dishonest and corrupt.

This calls for a change of outlook, philosophy and policy. We have indulged for far too long in wasting our scarce resources, first by producing graduates who can’t find a job, then by compelling migration of the talented people educated and trained at the public exchequer cost, who contribute nothing towards development of the country or alleviation of poverty or developing human resources.

Worst is the horrible waste of domestic talent by making the most productive personnel of the country live in utter poverty from budget to budget for average 35 years, sapping them of all their energy and zest to do something really concrete & productive for the country, by “retiring” them. Are civil, police, military personnel and doctors, engineers, professors, judges not a rich pool of talent and valuable experience, which should be deployed for nation building? Government invests so much in training the public servants across all streams and simply allows them to fade away. Why can’t their energy & potential be used for development, manufacturing, services, education, raising productivity and efficiency in public services?

If one were to take a comprehensive look at the impediments to such a plan of action, it transpires that service rules do not encourage   entrepreneurship development in public servants at all. The enterprising public servant may end up getting charge-sheeted for “ misconduct”. If s/he is allowed to take VRS (voluntary retirement) after 10 or 15 years of service to set up a “Start Up”, it needs only to be encouraged. It would improve the success rate of the start ups, create in due course opportunities for employment to others and above all, make way for additional recruitment to fill the vacancy.

To boost it up, the budget should announce support to such employee Start Ups. In fact, there should be a provision to allow public servants to take a break for 5 years for setting up a Start Up enterprise. If s/he fails s/he can return back to the job. Is it not like the provisions governing appointment on deputation from one job to another?

In fact, a number of qualified public servants have set up successful enterprises without taking permission or resigning and the courts have ordered paying them full salary and other service benefits like promotion etc. for the 17 years of absence from job. Many public servants have gone to foreign countries without taking permission from the government and taken up jobs there.

Because of lack of incentive, opportunity or entrepreneurship training post retirement, this pool of talent goes into retirement psyche and lives on pension for the remaining years of their life, whereas they can set up  small businesses. The exchequer picks up no extra costs, it rather collects additional revenue.

Let the future budgets take into consideration these ideas and avoid waste of national resources and opportunities, accelerate economic & social development, overcome the problem of unemployment, eradicate corruption and alleviate poverty. Better to focus on creating opportunities for generating clean money rather than corruption & black money. The budget should raise tax slabs considerably high so that the public servants have good income and savings so as to finance their business ventures. It will be less than the current wasteful and unproductive expenditure on low quality education, health services and livelihood ventures.

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