INDIA DEFICIT........EXPLOITING RESOURCES

I find significant reason to justify the S&P downgrade of Indian economy. The Indian government needs to no introduction that it has been a master of delay in bringing new policies. The parliament of 2011 remained under the pressure of corruption of 2g scam followed with Anna Hazare movements. Well being a student of Journalism I find significant foreign support in these movements. Moreover the Indian corporate sector has also being an equal partner to exploit the resources of the Indian economy. Being a student of Journalism and dreaming to become a Financial Journalist in the next 2 years I have carried extensive research to present these facts at your end.

THE BIG HOLE IN INDIAN FISCAL.

The Indian corporate sector particularly the subsidy attracting sector has exploited maximum resources. According to the recent figures from the CAG it has been found that Tax exemptions cost to the Government is Rs 1,38,921 crore in revenues in 2010-11, on direct taxes. Of this, the lion's share went to the corporate sector. Corporate sector accounted for 63.5% (Rs 88,263 crore) of the revenue forgone of 2010-11. Just imagine the amount that the Indian corporate are having under the belt.

Further it has been found that Indian corporate sector is being promoted for doing tax evasion. Well this promotional activity has been carried out exclusively by the Chartered Accountants of India who has been doing it with full integrity for the past 60 years. The proof of the pudding is that according to CAG report s there were 7.2 lakh working companies in the country, according to the data with the Registrar of Companies, but there were only 3.8 lakh corporate assesses, according to the Income-Tax Department. Further drilling down the spinal cord of tax evasion it has been found in my research that Its being observed in the report that the assessee base grew over the last five years from 313 lakh taxpayers in 2006-07 to 335.8 lakh tax payers in 2010-11 where as the number of financial auditors were less. 

In another report on Union Government Finances and Accounts, the CAG said at the Central Board of Direct Taxes incurred a total expenditure of Rs 37,365 crore on interest payments over the last five years without obtaining approval of Parliament through necessary appropriations.

SQUEEZING AM ADMI.

Well the government in one hand will make the rich to become more rich where as the Am Admi will be squeezed through taxes and other levies which will increase the cost of living. In fact I have found that our salaries don’t grow as compared to the cost of living which doubles every year. In a recent note form the government it was found that India has made record food grain production for 2011-12 will touch an all-time high of 252.56 million tonnes, raising prospects for more exports. The above chart shows the food grain  production from 2004-05 to till date..Well that is very good news for Indian economy but my question is why the prices are not coming down of food grains. Why consumers have to pay hefty prices for food grain. Well the reply remains silent and raises more questions further. Even sugar output is expected to hit a record high of 26 million tonnes. This is bound to increase the profitability of sugar companies but did the price come down at the grocer shop. We are still paying Rs.32/kg for sugar where as the price in 2000 was Rs18/kg. Are we becoming too much focused for earning export revenue and more busy in squeezing the common man of india.

BECOMING RIC BY EXPLOITING RESOURCES.

We find coal prices are going up and increasing every quarter. Coal India plans to hike coal prices by up to Rs 175 a tonne to close the gap between domestic and international rates. Well we can feel the pinch of the rising prices from electricity bills and other energy related products. Indian industry will again go for a price hike of its products to pass on the rising coal prices. Coal India is having an cash reserves of Rs 45,862.28 crore. Well now just imagine despite of having such high level of cash reserves coal prices will rise and we will find various justification for further price hikes. Now tell me who is being squeezed in the battle of corporate earning and stupendous growth numbers.

One will be shocked to find that two dozen of India's largest public sector companies, including Coal India, power utility NTPC, miner NMDC, Steel Authority of India and oil producer ONGC, hold cash reserves of 1.8 trillion rupees. What an economic growth at the cost of Am Admi. I would like to ask my readers that do you think that after these huge amounts of cash reserves Indian industry is really struggling or busy in window dressing.

Now imagine the joke of the Indian economic growth. UPA government will find tough challenges to win the election of 2014.Media and free availability of information has increased the awareness among common man (Am Admi) that government is finding tough challenges to meet the objectives of its growth. Government will simply raises taxes and implement it on common man to reduce the gap of fiscal deficit. Whereas Indian industry will keep on exploiting the resources in form of subsidies and restructuring of debts and will keep on passing the higher prices as well the government debt burden. It seems like a double sword by which the common man is being cut into two half.

In the beginning I have mentioned that Indian corporate sector has been exploiting resources and those resources. I hope that I have been able to draw the attention of the society as being a student of Journalism.