Major Policy Flaw In UPA Regime #UPA #Taxation #Subsidy

The failure of govt on almost every front is now apparent. We are looking for an answer as to what has gone wrong on policy front. In fact there are two things i e there is a major flaw in policy and second the leadership is not interested in correcting it.

 

The major flaw in policy is that the govt has kept subsidy burden high and without any direct benefit occurring to the so called target segment of society. They have had to keep taxing the people at high level to foot the bill of high subsidies. In the process what is happening is that there are dishonest people who evade taxes because there is greater incentive. The tax burden on honest people rises as a result of some tax payers evading taxes. The second part is that some dishonest people take undue advantage of subsidy regime and the target population does not have full benefit.

 

Now, the evasion of taxes and wrongful benefit drawn from subsidies by dishonest people happens with help of some people who have  authority . Both share the loot and want the system to go on as it is. The honest in govt and the honest in public , both suffer. The younger generation gets wrong ideas and social fabric is continuously getting maligned.

 

The solution of the problem is therefore very simple and straight. Do away with subsidies and reduce taxes. Then what would remain to be addressed is to help the poorest 20% of the population who even otherwise do not use the subsidized diesel or the cooking gas . The fertilizer is also not for their use as they are the people who do not own land. The procurement prices fixed by govt can take care of input costs , so subsidy on input and then high procurement prices make for leakages all around.

 

If an economist Prime Minister can not understand this simple equation , who would then understand. Taking bribes is only bad but letting wrong policies go on is worse.

 

Hariom,

krsnaKhandelwal

4 thoughts on “Major Policy Flaw In UPA Regime #UPA #Taxation #Subsidy

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