Step by step into the abyss.

Our most revered Commerce and Industry minister wants to increase foreign control of telecom firms to 100% and also increase foreign involvement in defence. " I am strongly in favour of raising the cap in telecom sector. I have discussed this with the telecom and finance ministers and once we have the proposal, we will move the Cabinet for raising the cap to 100%, and also for FDI in defence," he said. TOI, 17 June. The government is also considering " diaspora " bonds presumably to beg for some dollars at extremely high rates of interest from Non Resident Indians. So while it is forcing the Reserve Bank to reduce rates at home, so that savers are suffering, it wants to give tax-free windfall gains to NRIs. Why such desperation? India's trade deficit was $20.1 billion in May, up from $17.8 billion in April and $16.9 billion in May last year. While countries like China, south Korea and Taiwan have surpluses we always seem to have deficits. At the same time Foreign Direct Investment fell by 6% in the January to March quarter to $5.47 billion compared to $5.84 billion in the same period last year while Foreign Institutional Investors withdrew $4.5 billion from our bond market. Why are foreigners so reluctant to invest in India when we have large deposits of coal, iron ore and bauxite when they are investing hundreds of billions in China which has very restrictive rules, whose judicial system is controlled by the Party, regularly steals industrial secrets and has a huge counterfeit industry manufacturing fake products in complete disregard of copyright and patent rules? Because of our punitive and capricious tax laws. The 2011 Budget imposed Minimum Alternative Tax and a Dividend Distribution Tax on companies in Special Economic Zones. When these zones were set up there was no mention of the time limit of tax exemptions. Companies invested vast sums of money setting up production in these zones thinking that exemptions wold be open ended. They went to court but their petition was dismissed by the Karnataka High Court. Now no one will trust what the government says and will not want to invest in India. Indirect Tax collection grew by 3.8% in April and May, the first 2 months of the new financial year, when expectation was for much more. TOI, 18 June. Except for a few, every service, from hospitals to newspaper delivery boys to tutorials, have to collect 12.5% service tax from users. This has added to inflation and reduced spending power, thus restricting usage. So, why is the government resorting to such extortion? Because the Congress wants  money to bribe the voters to win again. One step at a time. Downwards.