Interest From Vote Banks: The Untapped Revenue

"Yes, we can!"

Before you disregard this as a sequel to "The Secret", or a popular electoral chant, read on. 

We complain about the lack of accountability in India but other than cribbing about it, no one wants to deal with the root cause. Honestly, you can't really blame the politicians for everything, the voters are at fault here as well.
"Hamara kya jaata hai, baday log tax dete hain, hamay toh muft daru mil jaati hai na election ke time." 

But seriously, why, in a population of 1.21 billion people, we only hear the few voices of discontent from the urban/middle class landscape? Because they are the ones who are directly contributing to taxes, which makes them upset about "their" money being misused. 

[Only 2.7% earn enough to be eligible for taxes. That's about 32 million people who are burdened, to collect Rs. 1,12,114 crores (Tax collection - 2011)] about 10% of government's total expenditure: Rs. 12,16,576 crores (Planned and Non-Planned) Source: http://indiabudget.nic.in/ub2011-12/eb/be.pdf ]

If you think about it, only 10% of the money that is required by this giant nation of hungry mouths is met by 2.7% people. These 32 million people, armed with their glasses of scotch and the internet are genuinely pissed-off. They are not getting their money's worth when it comes to infrastructure and law & order.

Really, all it boils to being unhappy with the government is if it's your own money at stake.


So, how do you generate interest from the rest of the nation? 

Tax them. Well, make them file taxes, get them involved and give them the pride, self respect and reason to crib about their conditions. Because once you pay for the membership to this secretly discontent club, you suddenly have the right documents to ask questions without any fear.

The total Indian workforce in 2009-10 was 460.6 million, out of which, 75.6 million are regular employees and 151.7 million are casual labor. 

Let's just take a look at the numbers: 75.6 +151.7 = 227.3 million. 

Here's what I propose: 

Most of these people earn way below the Rs. 1,80,000 tax exemption slab so they are not even liable to file any taxes. Average daily wages of labor (semi-skilled and helpers) Rs. 5000/month. The govt can add a 2% tax on their wages. 1% from the employer and 1% from the employee. That's Rs. 100/month or Rs 1200 per year. 

227.3 million X 1200 = Rs. 272.760 Billion revenue generated per year from the working force. 

What's in it for the labor? 

Simple. They file for taxes at the end of the year and collect their Rs. 600 back and call it a bonus for being part of a legit system. 

What's in it for the government? 

Apart from the Rs. 136.38 billion (Rs.13638 crore) added revenue, plus about 10% interest collected on the other half or Rs. 1363.8 cr.

Grand total: Rs. 15,001 crore of chump change, by doing absolutely nothing. 

Believe it or not, this figure is higher than Haryana's total excise revenue last year. Rs. 11,677 crores.

This money could be used for any number of developmental programs for the labor:
running water, housing, electricity, better roads, education (at all levels, including better training centers to get them upgraded).

It also provides the government with a fool-proof method of identifying anyone who is contributing to the society.

This is a win-win for everyone, including the industries who are facing a shortage on skilled labor. Or, you could also waive off the education cess on the excise duty, will make things cheaper for the general public and you the extra money to offset it.

Think about it, Mr. Finance Minister, it really is not that difficult. If you accept my proposal, I take payments in cheese.