Tuesday, June 07, 2011

At the Annual General Meeting of the International Air Transport Association ( IATA ) on Monday India was put on the " Wall of Shame " because of high service tax on air travel ( HT, June 07 ). UK imposes the highest tax $ 4.5 billion followed by Germany, Austria and then India which milks $ 450 million out of travelers in " complete contravention of ICAO rules ". IATA CEO, Bisignani said," Taxing aviation does not pay. The Dutch government repealed a $ 412 million departure tax because it cost the Dutch economy $ 1.6 billion." So why do we Indians pay obscene amounts of tax for zero service from the government? First, because the government needs money to pay for the hedonism of criminal politicians and, to pay unnecessarily high salaries to legions of useless, parasitic civil servants. Secondly, astronomical taxes make goods and services too expensive for the poor which then allows politicians to get votes by promising cheap rice, free TVs or cash gifts with taxpayer money. A study by the World Bank ( TOI, May 20 ) showed abysmal efficacy of social schemes targeting the poor. The Public Distribution System reaches just 27% of the poorest quintile, the Indira Awas Yojana reaches 30.7% and the National Old Age Pension Scheme just 32.8%. There is tremendous enthusiasm among politicians for schemes for the poor and elections seem like a bidding process with each political gang promising ever greater waste of public money. Also, most of the money is looted by politicians and civil servants which makes such schemes very lucrative indeed. That is why the government is never going to agree to an effective Lok Pal. Criminal beggars.

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