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Baba Ramdev Needs Instant Government Attention ……… Solution is inbuilt………
By CA A. K. Jain



The most hyped and high profile hunger strike of Baba Ramdev has shaken the country's veteran politicians. In fact it forced the administration to initiate police action (in the middle of the night on 4th June, 2011) to tamper the entire movement and send Baba to his home in Haridwar.

For last two years, the government linked financial scandals have become a regular news feature. The media is making the best use of each of the story to increase their net worth. International agencies are rating India as the best and most corrupt business destination in the whole world. India is now better recognised as land of financial scandals, bribery, scams etc. Probably, this is one of the most defining reason for foreign companies to do business in India. The rampant corruption is supplementary incentive to every foreign company doing business in India.


Since independence, the country has seen unparallel inflation, growing unemployment, shortages of essentials, falling real income, deteriorating law and order situations, mismanagement at International frontiers etc. Unfortunately, these negativities generate wealth for handful persons at the cost of the masses.


People like Anna Hazare and Baba Ramdev think that the, situation can be improved in the interest of common person. They get emotionally attached to the cause and the country. They feel they can be the instrument of change. They dream to improve the plight of the common person. They take their mission to the people. Unfortunately, they don't know the system, they don't understand the politics, they don't have the organisation, they don't have the professional experience. They live in the world of dreams.


The problem of Indian money parked in foreign bank accounts is nothing new. As it appears, the government is already working on this issue. But bilateral relations, international treaties and customs are restraining the executives to increase the pace of their efforts. We hope, after Baba Ramdev's episode, the government will augment its efforts in this direction. The other issues raised by Baba Ramdev regarding corruption, education etc. are extremely relevant and we again hope the government will show sincerity and honesty to tackle these issues under time bound programme.


In any case, the police action of the government at Ramleela Ground, New Delhi can not be accepted in any civilized world. A strong number of about 5,000 police men entered the campus little after midnight, where more than 60,000 devotees including women and children were sleeping. Police used tear gas shells to create panic in the small place. The light were switched off. Who so ever tried to intervene or argue was physically thrashed. Confirmed injury figures are not available. Many are still untraceable. We can not find any other example of this event in the history of India. We deeply condemn the approach of the administration in handling this issue.


We wish good for Baba's mission and also wish him good health and long life. Since, the Supreme Court is now dealing with the subject, we hope appropriate relief will be granted to all who have suffered. We also hope the government will henceforth become more transparent and affective in handling various issues raised by Baba Ramdev and Anna Hazare.


We have a suggestion for both Government of India and Baba Ramdev about the problem of Indian Black Money, stored in Swiss Banks etc. If the Scheme suggested herein below can be applied through the Government Ordinance, the problem can be resolved in the best interest of India..


The scheme can be named, “INFRASTRUCTURE FUNDING THROUGH FOREIGN REMITTANCES SCHEME- 2011”.


This scheme may be based on the following guidelines. The scheme primarily offers foreign account holders to repatriate funds back to India with immunity from prosecution. All the incoming remittances under the scheme can be taxed reasonably (say 15%). Besides, the Government can also put certain conditions to route these remittances for the development of Indian infrastructure sector e.g. education, health, transport, energy, communication, road development etc. The scheme should be kept open for at least three years so that, effective results can be achieved. It takes time to understand the scheme and generate the required confidence in the law.


The adoption of this scheme can bring unprecedented success in bringing Indian precious foreign exchange back to country. This is the sole objective of Baba Ramdev. If we want practical solutions, the issue of handling corruption should be addressed separately. For this purpose the government is already in agreement with Baba Ramdev. Special Courts in adequate number can be setup both at central and state level to enforce discipline in the administration of the country. We hope the government will act in the right direction and Baba Ramdev will also accept practical solutions in the overall national interest.


INFRASTRUCTURE FUNDING THROUGH FOREIGN REMITTANCES SCHEME- 2011


Salient Features


1. All individuals and companies will be permitted to receive foreign remittances through recognized banking channels without declaring the source of funds. Cash deposits can also be accepted.


2. The remittance receiver will only be required to provide a declaration that, receipts do not relate to drug, terrorism and arms dealings.


3. All remittances under this scheme will be termed “Foreign Receipts” herein after referred as “FRs”.


4. The scheme should remain open for thirty six months after notification.


5. All FRs should be deposited first in a bank account opened for this specific purpose only ( like FCRA Scheme). Only one bank should be entrusted to provide banking facilities under this scheme. This will help the Government in monitoring the inflow and collecting taxes etc. State Bank of India is ideally suited for this purpose as they have country wide network.


6. All FRs should be invested with in nine months in the Central Government approved infrastructure projects. i.e. projects in the field of education, health services, transport, communication, energy etc. All infrastructure projects should be located in a town / village having population of less than 10 lakhs. Highway projects may be exempted from this requirement.


7. Receipts can also be invested in infrastructure development through the subscription of Infrastructure Bonds issue by Government. The bonds to be issued should have a lock in period of 5 years. The bonds may carry interest of 3.5% p.a. payable half yearly.


8. All FRs under this scheme should be taxed at the flat rate of 12.5%. This tax should be collected by the receiving bank same as TDS.


9. Recipients of FRs should be provided total immunity from prosecution and penalties for the amount received by them under this scheme.


10. All FRs under this scheme should be received in convertible / acceptable foreign currency.


Effects of this Scheme on Indian Economy


1. Under this simple scheme, we can expect an inflow of massive amount of foreign remittances.


2. Since, the inflow of foreign exchange will be on non repatriation basis, Government can use it to repay its expensive foreign loans and make the country debt free for the first time since independence. We will save crores of rupees which are presently paid as interest on foreign loans.


3. Indian currency will instantly get stronger and may even beat the lead currencies of developed nations.


4. Foreign exchange reserves will increase substantially.


5. RBI can become a net lender instead of habitual borrower.


6. All kinds of unemployment will vanish as physical development will take place in small towns and villages across the country.


7. Consumption of steel, cement, labour and other inputs in developmental projects will multiply national income. Both direct and indirect revenue will increase many many folds.


8. The scheme will completely transform the country with in thirty six months unless blocked by vested interests in and outside the country.


9. Average literacy rate in the country may go as high as 95% to 98% due to additional educational institution promoted under this scheme.


10. Health services will become much more economical and accessible by common person.


Precautions and Measures Required for the Success of the Scheme


1. The scheme will need wide publicity around the world.


2. Indian embassies should be involved to project the scheme.


3. Help centers and guidance centers should be set up to explain the scheme.


4. Immunity from prosecution to all recipients and their associates should be given in unambiguous terms.


5. Question regarding sources of funds should not be requested. This will defeat the basic objective of the scheme.


6. The use of terms like black money etc. should be avoided as that will be counter productive. The amount parked outside India for various reasons can be referred as “Foreign Investments”. This will generate tremendous goodwill.


7. The scheme should be managed / administered by independent committee reporting directly to Planning Commission. All ministerial interferences should be curtailed.


8. Infrastructure projects should be identified by planning commission, keeping in mind five year plans. These projects should be auctioned in open house on regular intervals to the individuals and companies participating in this scheme.


9. All surplus funds should be invested through Reserve Bank of India on commercial terms so as earn at least 8% to 10% returns p.a.


10. Religious donations should be kept out of this scheme. Scheme should not encourage flow of religion base funds.


11. Government should have the law to reward handsomely and quickly the informers about storage of illegal money.


12. The foreign account holders who fail to close their unauthorised accounts with in thirty six months (during the period of scheme) should be severely penalized and punished. Scheme can provide for minimum imprisonment of ten years for holding unauthorized accounts along with fine equal to amount deposited. No exceptions and no exemptions from the penalties should be provided. Informers of unauthorized accounts should be generously rewarded by cash incentives.


Conclusion

This scheme, if implemented with supporting awareness programme may change the face of the country in short span of three years. Issues relating to corruption etc. can be resolved discreetly. Government Treasury will start over flowing. Indian Economy can achieve 0% unemployment and net lender certificate from the World Bank and IMF. What else we can expect in a short span of time ……………………As a author of this scheme, I can say with confidence that, this will bring both economic and social revolution in the country.

Request to all the Readers of this Mail


In case you approve and appreciate the ideas placed herein above please help the nation by circulating this mail to all your friends, associates and all others, so that the issues raised by Baba Ramdev can be resolved in positive atmosphere.





Tapuriah Jain & Associates
Chartered Accountants
21,. Skipper House, 9, Pusa Road, New Delhi - 110 005
Tele : 91-11-28754012 &13, Mobile : 91-98-100-46108, E-Mail : caindia@hotmail.com



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