Sunday, February 15, 2009
Path breaking Pointers to overcome Recessionary trends
What should our Government do to overcome the current trend in this recession - "A LOUD THOUGHT"
Why this recession? Could it be a myth, or is it a reality??Recessionary trend is felt even more so because of the reluctance to spending by the people who have the money but are playing safe.If this perspective is right, then the immediate solution will be to make them spend their monies at the same rate as before.Furthermore, the refusal of the current mindset to part with cash for investments is only a case of stagnation arising out of uncertainty and not owing to its disappearance.
Path breaking Pointers to overcome Recessionary trends
What should our Government do to overcome the current trend in this recession - "A LOUD THOUGHT"
Why this recession? Could it be a myth, or is it a reality??Recessionary trend is felt even more so because of the reluctance to spending by the people who have the money but are playing safe.If this perspective is right, then the immediate solution will be to make them spend their monies at the same rate as before.Furthermore, the refusal of the current mindset to part with cash for investments is only a case of stagnation arising out of uncertainty and not owing to its disappearance.
Here are some path breaking pointers to help move this “under wraps” money onto the mainstream system to infuse more spending and liquidity, not necessarily tending towards the stock or the commodity markets. This could well be the foundation for implementing some of these bold initiatives by our Government. A supporting evidence of statistical data if any, will further justify and value add to this premise.
1. Reduction in the stamp duty on property transactions to as low as 2-3% from the current levels of 8-10%, which can for a limited time window (say 6 months to 1 year) to boost the investments on realty segment
2. Lower the tax slab on taxable incomes to a ceiling of 15% maximum. Additionally announce a special protection scheme to bring out the unaccounted money with just a flat tax rate of 20% and by not enquiring or investigating the source of funds / Income for such disclosures.While the first initiative stimulates the realty sector, which is a much needed boost to the economy, the next initiative should benefit in infusing the unaccounted money into the system, thereby augmenting the spending across other segments, as it perks up the necessary demand and money inflow.
The second initiative will further help in not only in bringing out the money which got holed up in the share market, but will also pull out the money much needed for liquidity from the HNI (High Net worth Individuals) and help in compensating the revenue loss .
More money into the system means more scope for the government to make use of the inflow of the money with the execution of the infrastructure projects as planned and already scheduled.
All the above will definitely provide immediate boost to the internal market spending and will throw a positive influence across the other sectors thus insulating us from the global recession which is the need of the hour.Once the system gets re-established with the necessary confidence, India will be more geared up to move forward as the world economy starts bouncing back. At that juncture of an economic bounce back, the government can revisit to roll back these “time-limited stimulants” after it serves the purpose in the limited time window they have been set.
Please send in your comments, thoughts, opinion and views without any hesitation and that should help me to understand how we can make this happen by moving these ideas through the right channels.
That could be one of the ways we contribute from our side not only on the increasing the spending to boost the economy, but also to help our lesser fortunate ones to come back to their jobs as quickly as possible.
Regards
Regards
S.Baskaran
