There might be three
tax rates for the three classes rich, salaried and poor... 28%, 12% and 0%,
respectively... The government has said that tax slabs of 12% and 18% could be
15% keeping revenue neutral in the mind...
Zero rate on things
bought with wages by poor is quite encouraging, 15% for the salaried is not
discouraging too... 28% for rich only on lux and sin goods would help revenue
and would improve health outcomes for all...
Flexibility to deal
with demand/supply shocks by adjusting prices to the economy would help the
policy makers to increase investment/employment and growth during slowdown...
A lower tax would
incentivize businesses and consumers and increase demand for investment and
employment...
A low and single tax
rate would neither incentivize nor disincentivize the subjects... and thus
neutral...
Over supply in the real
estate has resulted in low demand relatively, therefore there is a downward
pressure on the prices and price expectations also for investment which is
holding back the recovery...
Builders are rich
people who can hold in the expectation of higher prices ahead, but it may not
materialize soon due to limited income of the people in the short run and lower
price and expectations by investors and buyers due to higher supply...
Therefore, to increase
real income of the people the builders might lower prices that increase demand
in the short run...
INDIA has a huge demand
for its population which increase higher price and price expectation in the
medium to long run...
The builders might
invest the profits at other profitable locations to increase returns... At
lower prices more people could afford buying and investment...
If prices fall 4%
builders could earn that money from bank deposits...
Why the government
should bear the burden of recap when it was a fault of the Monetary Policy, due
to whatever reason, government pressure too, more populism, more public
spending at the cost of the private sector...
Resources are limited,
when we divert them, labour and capital, it should be more productive or lead
to lower prices, demand and growth...
But, this was not the
case... Nonetheless, it ultimately goes to the RBI to solve the problem again
leading to lower prices, higher demand and growth...
Again diverting
resources from their current use might increase interest rate and create
uncertainty which could be solved by printing more currency which could be used
effectively, more productivity uses and lower prices, demand and growth...
If it reduces cost and
prices there could not be much argument against it... Printing more money if it
leads to lower prices seems right...
A resolution to dilute
government debt every year would help improve the finances if the government
helps increase productivity and reduce the price-level or inflation and
expectations seems justified...
The public debt of the
sovereign is the result of profligacy in the past, fiscal deficit of 3%
(inflation adjusted) should be allowed... not over it in any case... It would
help all...
INDIA,s long term
growth is supported by fundamentals... Higher rate of the population growth,
employment and demand and higher investment and supply and higher growth...
Higher unemployment,
lower wages and lower interest rate and lower prices and cost are signals for
more investment due to higher prices or inflation and inflation expectations
due to higher demand and supply in the medium to long run...
Higher fiscal deficit
if it increases productivity, lowers prices and interest rate would
increase demand and growth…
Nonetheless, INDIA’s
growth has reached 6.3% in the current quarter (July-September) which could easily go up due to lower
interest rate and higher investment and employment and supply which could lead
to lower prices and higher demand and growth…
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