Category Archives: Economy

They don’t pay back loan and live life Kingsize !

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According to a report published in the Times of India on July 17,2014, the top 50 Non Performing assets (NPAs) in India owe over Rs. 53,000 Crores mainly to Public Sector Banks (PSBs). Some of these defaulters have been declared “willful defaulters”. If loan amounts are recovered from them, it can help PSBs in meeting their capital requirement and avoid selling their stake in joint ventures. Mr. Vijay Mallya’s Kingfisher Airlines tops the chart of such defaulters. For years our government has been claiming that efforts are being made to recover the bad debts . It is time that Modi-led Federal Govt. takes some hard measures to get this money back into the system for nation’s development. Let us remember that due to soft-peddling of the government, the defaulters continue to dump their own failures on taxpayers’ shoulders. No business should be considered too big to fail, but if the government considers to bail out a failing company, then it must do so with a clear cut contractual obligation on the part of the company to return the money.

The readers might be thinking as to how much Kingfisher Airlines still owe to the banks? Well, it is a loan amount of 4,000 Crores that Kingfisher still has to repay to the banks. Is it okay to live life like Kingfisher even if you have defaulted on your monetary promise?

For the details of the news, please click here. 

3 ways to improve Economy of USA

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In this short video from Learn Liberty website, Harvard Economist Jeff Miron explains 3 simple ways to revive the economic recession of USA (whose impact will naturally be global).
1. Cut entitlements: That is, Government should decrease spending on Medicaid, Medicare and Social Security. In other words, cut down on welfare to an extent.
2. Freeze new Governmental regulations on businesses so that businesses can focus more on creating products.
3. Simplify Taxes and go for purchase-tax: The current income-tax based system has grown into a complex system resulting in a huge bureaucracy, proliferation of tax-professionals and needless to say, people have to devote a substantial amount of time to track their taxes and compliance.  Miron urges that the current cumbersome system be abolished and replaced by a simple flat tax that everyone pays on consumtion (ie, when I buy an item from market).
By the way, Faitax organization has also been pushing for similar reform.
Here is the video:

 

Fair Tax Movement in USA

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The Tax system of USA- like many other countries- is not an easy one. It is pretty complex. This leads to proliferation of CPAs and Government departments.
I recently came across a movement that is catching up, albeit slowly: FairTax.
Needless to say, Fair Tax advocates simplification  of taxes, based upon retail sale. So rather than paying the taxes on your income, you pay tax only when you buy something (some items will have no taxation). FairTax is advocates a 23 % flat tax for every one  and it says that will result in revenue-neutral state, but gradually it will result in revenue plus if Govt takes adequate measures.
Yesterday I happened to hear Libertarian candidate for the Presidential elections 2012, Mr Gary Johnson– who is being described as fiscally conservative and socially cool! He clearly advocated Fair Tax as a solution for the US economic woes!
The Fair Tax looks interesting.