Economic Policies One World
It is the policies that can make or mar a Society
To achieve the objective of creating a state of Utopia in the world it is of vital importance that the countries of the world modify their economic policies suitably. One of the major reasons of unrest in the world is having economic policies that are beneficial to the rich and powerful at the cost of poor masses. Pro-rich policies are framed by political leaders in concert with bureaucrats in their own vested interests and for favors received from big industrialists and businessmen. Moreover, the rules are framed in a manner that creates ground for corruption. The developed economies of the world are in turmoil because of faulty economic policies followed by them. While two percent rich and high income people are prospering, rest ninety eight per cent fixed income and poor masses are always under pressure, worried for their future.
At the same time poor countries are not able to come out of their poverty in spite of having abundant natural resources. It is ironical that in every country in the world – developed or poor, big or small, their masses are suffering whereas rich and powerful, even in poor countries, are earning huge income and enjoying all sorts of luxury. Contours of a dynamic Economic Policy that shall benefit all – rich and poor in every country, can be formulated by starting discussions at peoples’ and Government level. It should give equal level field to every citizen of the world and every country of the world and extra support to weaker section of people.
The basic ingredient of a good economic policy should be such that:
a) It eliminates the risk of high inflation in essential commodities
b) It eliminates the scope of corruption
c) It is pro-poor and fixed income group that constitute ninety eight percent population of any country.
d) It eliminates the need to take sovereign loans for carrying out development works.
e) It makes a country self-sufficient in products of basic needs like food, clothing, shelter, health and education, etc.
f) It facilitates optimum utilization of a country’s resources to facilitate rapid growth.
g) The taxes are kept to the minimum to tackle the menace of tax avoidance and generation of black money.
h) It promotes development of basic infrastructure like Power, Roads, Water, Sanitation, Housing, Airports, Ports, Water ways, Irrigation, etc.
Suggested Economic Policy to achieve the state of Utopia
Elsewhere, we found that the poor people of every country are suffering due to Inflation, Corruption, High Taxation, diversion of national wealth by parking of funds in foreign countries by rich and powerful and by corrupt politicians and bureaucrats. A good Economic Policy should address all these evils. A stop has to be placed from the tendency to increase the prices of products and services and raising of taxes by Governments. Raising of prices and taxes do not require any wisdom. Wisdom lies in reducing the prices and taxes that benefits masses who have limited and meager income. Poor people with fixed meager income shall get a psychological and real relief immediately if it is declared that instead of rising, the prices and taxes shall be decreased every year even if by a meager one per cent. Hence, the model Economic Policy should have suitable guidelines in this respect. The model Economic Policy should effectively tackle the menace of Inflation which is affecting the lives of fixed income masses in all countries. A small percentage of people in Trade and hoarders are able to manipulate prices by creating artificial shortage. The Governments should monitor activities of such unscrupulous people for the benefit of masses.
As for corruption, it can be eliminated only if people in power start following Fundamental Principles for living a Peaceful, Prosperous and Happy life. Money earned and wealth accumulated through corruption is like a stolen property. One can not display it publicly. It has to be kept hidden. It serves no purpose except giving a perverse mental satisfaction. By leading an honest life they shall become true heroes of the people. They then need not fear of losing power. There are numerous examples where people have resisted transfer of honest officers who have performed from their region.
Keeping these objectives in mind, World Government may encourage Governments of respective countries to modify their economic policies to include:
- Reduce all kinds of taxes on goods and services minimum @ 1% per annum of prevailing rate of tax to achieve ultimately tax-free or low-tax regime. For example, if the rate of tax is 30 per cent, then next year it should be reduced to 29.7 per cent and so on year after year.
- Governments should make their income from vast assets at their disposal like land, mineral assets, infrastructure, and the right to grant permissions for various projects, etc. rather than from high taxes.
- Reduce personal taxation level especially for people with low income. Eliminate personal taxation in the long run beginning with reduction of one per cent every year. Then there shall be no Black income.
- Infrastructure should be developed with PPP model (Public, Private Partnership). This will eliminate the need to raise National Debt by Governments.
- The subsidies should be reduced corresponding to reduction in taxes – in the same ratio, one per cent per annum. Reduction in subsidies shall reduce scope of corruption. Instead of giving subsidies make policies that make the citizens self-supporting.
- At the same time, all employees, Govt. and private, should volunteer to a reduction in their salaries by 1% per annum. Annual increment to be granted as per grades but the enhanced salary with increment should be reduced by 1% every year.
- Reduction in taxes and salary shall facilitate elimination of Price hike regime and help in reduction of prices by minimum one per cent per annum without affecting profitability.
- Every body to reduce price by minimum 1% every year – say on 1st of January, voluntarily. This includes price for products and fee for professional services. Imports also to be negotiated at 1% less price every year. Transport charges, air fares should also be reduced by minimum one per cent every year. This reduction in price every year shall not reduce profit as there shall be corresponding reduction in Labour cost, raw material cost and taxes. On the other hand the profit shall increase because by reduction in price the sale volume shall increase. Elementary theory of marketing – every reduction in price increases the customer base.
- Oil producing countries to be motivated to put a lid on price increases. They should also reduce price by 1% per cent every year. This shall increase consumer base. Producers profit shall remain unaffected – more volume less price.
- Expenses on Defense to be reduced drastically but by at least one per cent per annum. Countries should cut heavily on offensive forces and arms and ammunition. Defensive forces should be maintained at need based level.
- Governments, Producers and everybody should critically examine all expenses and endeavor to reduce every expense by at least 1 per cent every year. Weed out all wasteful expenditures. Reduction in expenses shall increase prosperity of every body.
- Monitor Trading activities minutely. Traders are the main contributors to price increases and inflation. They do not hesitate to exploit the masses by jacking up prices at the earliest opportunity rightly or wrongly. Cartelization is a common practice employed by producers where the production and supply is centered in few hands.
- Reduce national borrowing by one per cent every year. Target being debt free nation at the earliest possible. In fact every nation should have a respectable Reserve. It is unimaginable a country having largest GDP, huge land area and relatively low population should be the biggest borrower in the world!
- Promote entrepreneurship amongst citizens in agriculture, small scale production, professional services, transport, and hospitality sectors, etc. Reduce gradually dependence on Employment. Land should be leased to people who are interested in settling in rural areas and adopt to agricultural and related activities. Self employment shall reduce expenditure on pensions.
- Have a greater share of agricultural production and manufacturing in economy than the Services sector. In US the Services sectors contribute as high as 76% in their GDP. Services do not produce any thing tangible for people’s consumption. Such economies have to depend on imports heavily of even products of basic needs.
- Motivate entrepreneurs to increase their profit by larger volumes – Low profit but more volume. For maximizing their profit they should change their mindset from increasing the prices to reduce price every year.
- The authorities in Government should be motivated to banish Corruption from the system. Through corruption money and resources are diverted from public good to private benefit of a few Politicians and Bureaucrats in power.
- Welfare schemes should be implemented in each country, like –
i) Employment Guarantee Scheme (like Nrega in India) – provide minimum 100 days employment to everybody and create basic infrastructure through them – houses for poor, sanitation, roads, water bodies, play grounds, etc. especially in rural areas where there are no employment opportunities.
ii) Right to Food – provide food to poor at low price.
iii) Right to Education – free basic education to every one by the State.
iv) Right to Health – free basic health facilities to the poor.
v) Minimum Insurance to poor.
vi) Universal biometric identification of every citizen of the world. This will facilitate effective delivery of beneficial schemes to the poor and control crime within a country and internationally.
Implementation of people friendly economic policies formulated with largest participation of economists shall facilitate elimination of poverty from all parts of the world. Now G-20 countries are having 85% of the world’s GDP. What that means that the remaining 180 countries are surviving on just 15% of the world’s GDP. What an imbalance!
Indian Railways thinking out of box to skirt fare hike
“It is very easy to increase the fare, but we have to think out of the box. Fare hike is the easiest thing to do and I do not think we should have easy options,” Trivedi said.
(Indian Railways are maintaining same passenger fares for the last 5 – 6 years.)
US imposes higher taxes on low income people and lesser tax on high income people:
Warren Buffet – my driver pays more tax than me…
Need of the hour
The authorities in all countries should implement people-friendly rather than classes-friendly policies. This will help poor and the rich alike. Honesty and sincerity in framing economic policies shall start the process of elimination of poverty, illiteracy, inflation, corruption and shortages.