A Revolutionary Economic Theory

This is very interesting.

I do not know how effective this proposal will be in controlling corruption, black money generation, inflation etc., and whether there will be any takers for this proposal.

What is Arthakranti Proposal” & who has given the proposal ?

“Arthakranti Proposal” has been given by a Pune (Maharashtra) based “Arthakranti Sansthan” which is an Economic Advisory body constituted by a group of Chartered Accountants and Engineers. This funda has been patented by the Sansthan.

Arthakranti Proposal is an effective and guaranteed solution of Black Money Generation, Price rise & Inflation, Corruption, Fiscal Deficit, Unemployment, Ransom, GDP & industrial growth, terrorism and good governance.

What is in the Proposal ?

“Arthakranti Proposal has 5 point of actions simultaneously.

(1) Scrap all 56 Taxes including income tax excluding import duty.

(2) Recall & 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, 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 56Taxes 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 & 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 56 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.

Effect of if implemented today :

(01)Prices of all things will come down

(02)Salaried people will get more cash in hand

(03)Purchasing power of Society will increase

(04)Demand will boost, so will production and industrialisation and ultimately more employment opportunity for youth (05) Surplus revenue to the govt for effective health/ education/ infrastructure/ security/ social works.

(06) Cheaper and easy loans from banks, interest rate will come down.

(07) Tendency of society will changes from scarcity to quantity.

(08) Spare money for political system for clean politics,

(09) Prices of land/ property will come down,

(10) No need to export beef to cover up trade deficit

(11) Sufficient fund for research and development.

(12) Society will be free from “Bad elements”.

Sent by Arun Shroff

This is what I call thinking out of the hat.

While I agree to the Rs 1000/- and Rs 500/- notes being withdrawn, withdrawing the Rs 100/- note is going too much.

With the present low value of money, even a Rs 100/- note hardly lasts 10 minutes when you go to the market. Even Swami Ramdeo had suggested the withdrawal of the two higher denomination notes.

However, my main worry is the unemployment this decision of removing 56 taxes would cause.

Chartered Accountants, Income-tax lawyers and experts, the whole army of different tax officials would be declared surplus.

Of course, kidnappers, extortionists, thugs, robbers, etc. etc would be rendered jobless and politicians would become paupers, a very pleasant thought.

I hope AAP tries this out when it comes to power in Delhi.