Who grows with growth.

The average compensation of CEOs in India calculated on Cost to Company basis has crossed Rs 20 million according to Hay Group, a management consultancy firm. The per capita income has grown to Rs 50,000, which is a piffling $1000, and will cross Rs 60,000 this fiscal. One would have thought that with such growth in income direct tax collections would zoom but the opposite is the case. Direct tax collections are short by Rs 400 billion compared to budget estimates. Income tax officials have been warned that if they miss targets their appraisal would be affected and " will also be a factor while considering placements in 2012 ". TOI, February 24. Tax accrues as per income of a company so it is hard to understand why there should be targets on officials. It is not as if they are selling toothpaste where extra effort might increase sales. The result, naturally, is that officials are demanding extra taxes from companies and forcing them to deposit 50% of the demanded amount, even if they appeal, which is against the rules. The reason for collections lower than expected is because of lower sales of consumer durables such as furniture, home products and electronics. Clearly people are postponing purchase of lifestyle items because their purchasing power has been hit by inflation. A major reason for inflation is the imposition of service tax on ever increasing varieties of services. This is reflected in the increase in service tax collections by 37%. So, what you win on the swings you lose on the roundabouts. Even by Purchasing Power Parity Indians are the poorest among the top 10 countries. The per capita income of an Indian as per PPP is a mere $3703 compared to that of $8309 for China, $11846 for Brazil and $16687 for Russia. Even South Africa is 3 times higher at $10977. Yet all we hear is an endless discussion of whether growth will be 6.9%, 7.001% or 7.2%. There is absolutely no talk about increasing electricity supply to boost industry, reducing deficit to curb inflation or reducing taxes on key industries to make them competitive. Instead the morons want the RBI to reduce rates so as to increase house prices and car sales. To increase the Sensex the government now allows individual foreigners to buy shares directly in Indian companies thereby hoping that an influx of foreign exchange will prop up the rupee. It is worrying that a government, led by the World Class Economist, is depending on hot money and black money for economic recovery. Perhaps we should get foreigners to run our country. Could not be any worse than this lot, what?