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A blessing or a curse?
Written By psaram42 - 4 June, 2010
Bangalore Development Land use Analysis Economy Industry Others GIM
The Global Investors Meet (GIM) which concluded on Friday the 4th June 2010, has thrown up a new monitory scale of lakh crore. With the all too common inflation this is no surprise. It can expand to infinity. The Tata nano has started its production line, when there is no parking space in metros like New Delhi, Bangalore etc. Unfortunately the space on the planet earth is limited however much we wish it is not true. There may be enough petrol to run the nanos but no safe potable water to drink. It is an open secret that future wars will be fought for drinking water. There is enough petrol for our cars and excessive global warming too!!
The government armed with powers to acquire land with the magical development mantra can probably arrange for the lacks of acres of land. Is there a comparison of the same with decreasing value of money with inherent inflation? Landed property does appreciate with time.
When the GIM was in progress, with Mr. Yediyurappa wearing a brand new suit, an agitation was on at Mahatma Gandhi park circle at Cubbon Park by the people threatened of their precious land.
The GIM has left us wondering whether our city / state blessed or cursed.
COMMENTS
A ToI report today claimed that GoK requested Kingfisher to operate flights to Mysore and it had promised to share the loses it would incur. First they waste money to enhance the capacity of an under-utilized airport and they offer subsidies to airlines to use it.
Tax them! 450%!! Yes we have a great track record - The govt makes Rs.80 per tone of iron ore that is exported and the miners - depending on the market condition anywhere between Rs.5000 to Rs.10000. Havent they ever heard of "windfall tax".
The only way the govt will ever make money is from direct taxes - over which the state govt has no direct claim.
Tax irrelevant in the short term
Naveen - 4 June, 2010 - 21:10
I don't think tax is relevant to this issue ('blessing or curse') in the short-term. The situation with so many poor & a growing population makes it far more urgent for state govt/s to find ways to generate employment - even wealthy western govts yearn for more jobs within their states or provinces, despite the luxury of controlled populations & land availability in abundance.
The state govt will probably be losing when deals are inked since they have the difficult task of "balancing" to ensure that land taken up for industries & development & terms set out are acceptable & affordable to these industrialists who bring in more jobs whilst at the same time, the original land owners are compensated well by payment & with job guarantees, etc for effected families.
The real benefits will begin to accrue later when many will be employed in these industries. They will be paying all sorts of indirect taxes besides income tax - sales tax, vehicle tax, etc - thus, state govts also have much to gain in the long term. This aside, the demand for power, water, better commitment for protecting the environment, etc will keep growing as we develop, & though we feel that we live in terrible cities now, life is anyday better than what it was in the past when people lived in caves, hunted animals & travelled on horsebacks.
And one day, perhaps generations later, people will wonder how we managed to move about in metalic contraptions that used up so much space & polluted the fresh air so much !!
Govt not ready to disclose MoU
Rithesh - 6 June, 2010 - 03:11
"I don't think tax is relevant to this issue ('blessing or curse') in the short-term."
-What's short term? tax waivers might be for as long as 15-20 years. Same would be the case of subsidized power/water/etc etc. Going by the same logic - shouldnt we stop collecting all sort of taxes from all industries - over a "long" time they might invest their profits back and more ppl might get jobs and buy cars, etc etc - and in the mean time all the other welfare sectors that depend on govt funds can go to hell and people dependent on them can go get jobs with the naxals.
Equal education opportunity / level playing field
psaram42 - 6 June, 2010 - 12:37
It is true that with growing population there are more mouths to feed. Forcibly acquiring land seemingly on public interest is fraught with danger. Allowing mining in forest area, started by SM Krishna, is one such parallel example. SM Krishna’s political ascent from his Karnataka chief minister days is all but well known. He may be blissfully unaware of the havoc that this particular policy has caused later on by his rival parties.
The Industrial revolution followed by IT revolution the rich have grown richer and poor more likely remained poor. To be born with a silver spoon is all that you need to keep the ball rolling. The solution is free and equal education opportunity to all rich / poor children alike.
A wishful thinking indeed!
idontspam - 4 June, 2010 - 17:36
Would be good if we can take up some questions asked by AK Agarwal on some other thread on tax rates for these industries. If somebody is getting 500% margin you tax him 450 of it. But if you close him down you lose 450 and he will make his 50 elsewhere.
Now one could be a dog in the manger and say I dont want 450 but I wont let him get his 50 for the next 5 billion years till sun burns the earth down. Good. Lets see you barter this goodwill for some potatoes internationally. We can then use those potatoes to pay for our metro.
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