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Asim Boral

SONGSOPTOK THE WRITERS BLOG | 6/10/2014 |
BLACK MONEY AND INDIAN ECONOMY AND CURRENCY STABILITY.




New Govt should start functioning on business environment immediately instead of doing all irrelevant topics of article 370,VEDIC EDUCATION AND SPREADING RSS IDEOLOGY  .  Regular Rupee depreciation is really a cause for concern in Indian economy though not  bad  as it helps all exporters to gain in profits including 100 billion dollar IT industries and also Gold and silver prices remain on  inflationary trend .Though Gold at Rs 29000  per 10 gram  caused huge uncertainty to millions of workers who work in this sectors and already thousands of Jewelry shops closed due to no buyers .So dont go overboard on politics of blame game against congress on Rupee depreciation as Rupee is now traded globally and depends on Global economy .Nothing to worry and there is no politics of BJP or Congress in it as it is purely economics and can be easily control by RBI by remaining in low interest regime .Today you see there are 80% residential and mall space are vacant due to no takers and it has created huge more than 10 Lakh crore dead money and thousands of Builders are suffering of bad debts and already some of them committed suicides also .Imagine the effect of millions of workers working in Property sectors .So this is purely politically motivated inaction by RBI Governor  by not taking any proper action and no Govt can take any action against such recalcitrant RBI Governor who purposely not taking proper remedial action like USA Banking Chief BEN BERNANKE did because RBI is a constitutional body like CAG .It is strange that these constitutional bodies doing politics on economy rather solving problems in economy  .Govt never interfere any RBI action as they are independent body.
Yes it is fact that Rupee depreciation is effecting Import products like OIL ,Pharma and electronic sectors and Govt has no control on Global price as India import 70% oil requirement from foreign sore and this also can be negated by finding alternative source of energy need in India like Bio fuel ,solar and electric vehicle .We need innovation continuously to make a vibrant economy of India but never to criticize or doing politically motivated inaction by not doing any solution  to the problem  at the moment .
GOVT need to rescue this dead money situation as fast as possible by taking some path breaking measures 

1. Give IT relief upto 5 lakh of principal and interest on EMI on Home Loan 

2. Bring back low interest rate regime to logical 4% for Home Loan to clear all dead money as a one time measure 

3. Bank must give liberal loan based on strict Identity card and to stand behind the logical defaulters of EMI with subsidy and differed long term repayment mode .

4. Builders ,promoters must get cheap loans from bank at the rate of 0.02 % for 3 years repayment and 0.2% for 10 years repayment and 1 % on more than 10 years repayment 
make it for just one time stimulus packages for coming 10 years .Matter must be taken on sympathetic and human approach otherwise India will land up to severe recession very soon

5. Make one time measure of giving tax sops of all these 400 billion dollar black money by giving legal status for those person who are volunteer disclose of such money with no punishment and investment of 80% of such money by putting in Govt bonds or self investment and 20% will remain as cash deposit to Govt treasury for withdrawal after 20 years with no interest cost 

6. Bring back low tax regime for Salaried and Businessmen and cover more no of people in such low tax regime 

7.  Immediately implement GST for agri products as 2 % and non agri products as 8% uniformly for entire India with 70 : 30 ratio for state and central earning system instead of present high tax regime as high as 45% for any products move from one place to other 

Finally the most debated but seems to be real solution of containing Rupee stability is Govt can buy back Gold at present rate as India has largest holding of Gold in the world individually and in religious places estimated to be more than 25 lakh crore Rupees .This will help all who are suffering huge debt in all the sectors to pay back the money to the lenders easily and become debt free in shortest possible time .This huge money generated to people will help Banks to get more money as deposit which in turn can be loaned to all sectors who are in urgent need of money to invest . This is the only way to tame dollar as short term one time measure .
If new Govt really interested to solve all the evils of Indian economy then they can think of  above solution.
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