High taxes lead to cascading failure.

To bribe its way to election victory the Congress has decided to pay subsidy on gas cylinders directly into people's bank accounts. Families are entitled to 9 cylinders of subsidised gas every year, after which they will have to pay the full price for every cylinder they buy. Normally people just paid the delivery man thinking that they were paying the actual price. By paying directly into their accounts the Congress thought it would be linked with the subsidy and that would translate into votes come the general elections. Trouble is that many of the states are controlled by other political gangs who have seen through the game. They decided to neutralise the scheme by increasing the Value Added Tax on every cylinder of gas thereby increasing its price so that people are refusing to give their bank details for direct payment. High taxes are killing the airlines. Airlines in India have collectively lost Rs 536.50 billion between 2007 and 2013 so that the cumulative debt burden has reached Rs Rs 950 billion. Kingfisher became bankrupt as it was unable to pay interest on its debt because of falling numbers of passengers. Tax on Aviation Turbine Fuel is among the highest in the world. This is based on the belief among politicians that flying is a luxury that only the rich may enjoy and therefore it is moral to tax it highly. Gujarat levies tax at 30% while Bihar, Tamil Nadu and Delhi levy at 29%. This leads to a cascade of subsidies. High air fares mean that more people travel by trains which are always full. High fares on air conditioned first and second class train tickets subsidise cattle class trains where people travel without reservations, often packed together like sardines, with no air conditioning and filthy toilets. Treating people worse than cattle is supposed to be public service and, of course, keeps the poor in their place. On average an Indian flies once every 10 years while an American flies 1.8 times every year. Business people need to fly to save time if they want to grow their businesses. Is it any wonder that the US is a $16 trillion economy while we are at just $1.8 trillion and struggling to stay at that level. That business is falling is seen in the fall in truck rentals and a 20% drop in the numbers of trips trucks are making. Truck sales of Ashok Leyland are down 25% while those of Tata Motors are down 44%.  It is not the interest rate but taxes that should be reduced.