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Abolish Income Tax, raise banks' rates to 9%, says Dr Subramanian Swamy at ASSOCHAM meet

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Domestic savings and not foreign investment can take on a 10 per cent growth path, for which must be abolished and on Fixed Deposits be raised to nine per cent along with the reduction in the banks' Prime Lending Rates (PLR), and Member of Parliament (MP), Dr said at an function.

Dr Swamy said one of the important ways to put the on a double digit expansion mode would be to raise savings and abolish the

In his frank address, the who has also brought several social issues in the public domain, said the should be abolished right now and once it is done, people would celebrate not because they are fed up paying taxes but they are fed up with the inspectors. Also the inspectors have become instruments of political oppression.

The alternates to income tax can be found in avenues like coal block and spectrum auctions, the big revenue grosser for the exchequer, he said.

Dr Swamy said it is the domestic saving by Indian households which holds the key to reviving investment and not the foreign investment. Till about three years ago, the domestic saving was about 35 per cent of the country's GDP and this figure has dropped down to 29 per cent, as on fixed deposits have come down. The foreign investments contribute only two per cent of India's investment.

Unless the foreign investment is accompanied by technological transformation, it is not of much use for the

Criticizing the previous for raising the lending rates to the industry, Dr Swamy said the banks must also bring down the PLR to nine per cent. He said high lending rates have particularly hit the small and medium enterprises, which are the biggest source of employment, the need of the hour.

He also came down heavy on the Goods and Services Tax (GST), describing it as a disaster.

He said it was because of his efforts that the GSTN , which runs the IT backbone for GST, would now come under the ambit of the CAG audit. Otherwise, a case had been made out to keep GSTN out of the CAG ambit since the government equity in the GSTN entity was restricted to 49 per cent and the rest was with the private sector, mostly with the foreign banks.

Low priority to agriculture and very low investment in the sector were also responsible for holding up the economic growth, Dr Swamy, known for his straight talk, said.

Unfortunately, there is no Lutyens in agriculture, he remarked.

Giving a historical perspective, the said, till 1991 from the 1950s, the growth rate was less than 3.5 per cent and it was dubbed as rate of growth. In fact, it should have been called as the Communist rate of growth, as it was the followed by Jawahar Lal Nehru which let down the Indian economy, he said.

Dr Swamy said, Dr did a good job as he went about implementing economic reforms in an executive role as Minister under the then Mr P V Narasimha Rao, who had shown a political courage to usher in the reforms.

Dr Swamy was quite critical of the way the demonetisation was implemented and adequate preparations by enough cash availability were not done and the was not told about it.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 11 2018. 08:50 IST