Employment:
All talk by governments, key policy makers, economists inevitably touches one issue i.e. job creation, apart from several issues like fiscal deficits, interest rates, incentives, subsidies. The basic principal to make an incentive work is to link it the direct outcome as perfectly as possible. Most of the incentives aimed at job creation are linked to it indirectly at best. For example big manufacturing companies, gets several facilities from the government, but the employment generation from them is meagre when compared to services and unorganised sector in India. To encourage job creation the government may replace many of those incentives, with an allowance based on the sum of salaries paid (per head salary not exceeding 15 times of nominal per capital income of India), for example 10 percent of that sum.
VAT to PAT:
The whole world is fearing the climate change, which largely hinges on energy consumption and the resultant pollution. large parts of world is expected face the shortages of potable water due to the twin hazards of climate change and pollution. Then, why tax value creation leaving pollution? The tax burden should ideally shift from value creation to energy consumption (exempting the clean energy) and pollution creation.
Incentives/Subsidies:
In a country called Giclo two friends a Rabbit and a Jumbo lost their natural habitat, and therefore decided to get into transportation business separately. Within a few minutes the Jumbo got many orders and the Rabbit has nothing to do. It then approached the Government for support to get level playing field with the Jumbo. The government babus found good case in its problem and granted a truck and subsidised fuel to the Rabbit. In no time the Jumbo had to watch helplessly at the speeding truck of the Rabbit. With no business the Jumbo joined a circus company for livelyhood. A sage who observed these events thought the subsidies and incentives should be temporary, like the supplements to patients to become normal and compete. Will our Pranab listen.
Dr.M.Srinivasa Reddy
Professor & Head Dept.
Management Studies,
S.V.University, Tirupati (A.P.)
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