the opportunity for reform is now
More resources are needed for healthcare and healthcare facilities, pharmaceuticals and medical equipment.
A crisis provides the need and the opportunity to reform. We now have not one but three crises of an economy hit by viruses, expensive crude oil and threats of war in multiple places around the world. As a patriotic citizen, honest taxpayer and conscientious voter, I have the following humble suggestions to reduce the budget deficit and inflation so that more resources are available for health and other essential services mentioned at the end:
1. To improve tax compliance, simplify the tax structure and allow direct and indirect taxpayers and entities of all categories to easily file their tax returns. A simple process should automate assessment and provide online refunds immediately without manual intervention, thus also reducing staffing requirements. Tax authorities can then focus on big data, analytics and artificial intelligence to ferret out tax evaders and thus improve the extremely low percentage of the population in the tax net. Resolving tax disputes quickly without legal recourse is essential to the ease of doing business. An incentive such as cash back or a priority pass for government services or a one-time reward should be offered to honest taxpayers for paying taxes correctly and filing returns.
2. The gray economy must be integrated into the formal economy. While the GST was a major reform, demonetization hit terrorists and naxalites, but was less effective against black money as most unaccounted wealth is hidden in the form of gold and land assets, often benami. Regulation of gold trading and money lending; digitization of land records and proof of origin of funds would gradually reduce this problem.
3. Corruption is a cancer that destroys the economy. Transparent crowd-funded or state-funded election spending and the disqualification of unethical candidates and their proxies through an effective quasi-judicial mechanism under the electoral commission is necessary. Otherwise, corruption is institutionalized from above.
4. Oil import is the main contributor to inflation, trade deficit and pollution. In addition to the current shift towards green energy, policy reform and financial incentives are needed to find green alternatives to petroleum-based products like plastics, petrochemicals, and fertilizers.
5. The waste of food grains, fruits and vegetables can be combated by creating farmers’ cooperatives similar to dairy cooperatives. These will help farmers with better inputs, training, cold storage, logistics, better yields, while controlling food price inflation and helping consumers. India can be a major food and seafood exporter.
Spending has been reduced by plugging leakages through direct payment to individuals and by reducing subsidies and privatization of PSUs. More resources are needed for healthcare and healthcare facilities, pharmaceuticals and medical equipment. Job creation must be increased by allocating resources to education and skills, infrastructure and logistics, agricultural technology and food processing, textiles and clothing, strategic industries and defense production.
Dr. PS Venkatesh Rao, is a Consultant Endocrine, Breast and Laparoscopic Surgeon in Bengaluru.