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Posts Tagged ‘roulette’

Why I Don’t Keep My Money With My Government

Posted by Raunak Mahajan on September 4, 2012

Image courtesy: Conor Ogle

A few years back, I started investing in a Government Savings Plan. The deal was that for 15 years, I would have to put a minimum amount into the fund annually, and after the completion of the maturity period I would get the principal amount back along with the accumulated interest. The real incentive was that my investment every year would be tax exempt.

Yesterday, I withdrew the money I had invested so far. I was penalized a small amount, but it didn’t change my decision. I had decided that I was not going to keep my money locked in with my government for a long period. The Government is not only injudicious in its spending, it is also taking me for a ride with its unfair tax policies. Let me elaborate,

1) Our President until 2 months back spent more than US$ 50 Million of taxpayer’s money and sovereign debt on foreign travels. Why is that a problem? Because in India, the president is only a nominal head with no powers at all in decision making. It is a post which is a legacy of the British Raj and contributes mere pittance to the running of our affairs.

2) In 2009, our government allocated Coal mines to randomly selected business entities at prices only fraction of the market price. The Auditing Agency in a recent study reported that by not auctioning the national resources, the government has cost the exchequer of our country close to US$ 33 Billion. The Coal blocks were allotted as per the whims and fancies of those in power.

3) Similarly, in another recent finding of the Auditing Agency, it has been alleged that another national resource, the 2G Mobile telecom spectrum was allotted to the private telecom operators on a first come first served basis instead of an auction. The loss to the country from this unpardonable act was close to US $ 32 Billion.

4) Recently, a group of District level politicians traveled to China on a state sponsored trip. The objective of the trip was to study the best Dairy practices and replicate the same back home. The group returned saying that they learned nothing that was better than what we were already practicing in India. Duh! Who said that China has the best Dairy practices in the world! That trip should have been to New Zealand, Denmark, US or the EU.

5) In India, only close to 3% of the population pays income tax. No, its not a typo. 3% it is and I am one of them. This figure is unpardonable after 65 years of self rule. This figure is low NOT because our laws are slack. It is low because our government mechanism is not efficient and honest enough to get more people to pay income taxes. Since India taxes both income and consumption, it is only these 3% people that get taxed from all directions. In no court of law can that be called fair treatment.

6) I fall in the income tax slab that ends up paying close to 30% as tax. I was taught in school that we must pay taxes for the development of the country, our infrastructure, education, health services, military etc. etc. But I don’t see any of that happening.

a) Most of the National Road Highways are developed as Public Private Partnership (PPP). So I end up paying a heavy toll fee whenever I use a highway. This means I am paying for that infrastructure out of the income I have left after paying income tax!

b) India did not win a single Gold Medal in the recently concluded London Olympics. A country of 1.2 Billion and not a single Gold. Clearly the government in not using my tax money to facilitate sports either.

c) Government hospitals are either non-existent or lie in ruins with the most unhygienic services. Not to mention the grave shortage of competent doctors in them. Not surprisingly, most of us have to visit private hospitals for treatments and spend more money from the money I had left after paying my taxes! So evidently, my tax money is not being utilized in providing me good healthcare either.

7) Apparently a lot of my tax money is going to pay salaries of government employees who’s efficiency and work ethics are a crying shame. The rest of my tax money is spent in giving subsidized food and other incentives to poor people to win their votes and come back to power. And all the while, sovereign debt keeps increasing while my currency keeps declining.

And this is why I do not want a big government. I do not question its intent. Socialism is a benevolent concept, but impractical. It works in small communities but not at a Federal level. Big governments cannot put a mechanism in place which will deliver services effectively. With time they will only accumulate so much debt that you can kiss your country goodbye. Do you think the Greeks own Greece, or that the Italians are the true masters of their country? NO! Leftist policies and attitudes have pawned these countries to others….and there is no getting them back!

Sadly, above stated facts have raised doubts in my mind about long term fiscal health of my country. I do not want to keep my money locked in with a government that doesn’t know how to manage its finances.

I have better odds at a roulette table.

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