Answer to a common useless pro-FDI argument given by Sonia/Modi/Kejariwal (somoke)-andhbhagats (SoMoKe) and other FDI-supporters is --- Why do you use FB and WhatsApp? They are also MNC-owners ===================================== Answer is : Using FB / WhatsApp doesn`t create repatriation burden. Using windows \ samsung creates a FIXED forex loss. Whereas FDI can cause potentially unlimited forex loss as GoI has to give dollars for all the profits that that foreign company earns. The FDI is FDI as implemented by GoI and opposition i.e. SoMoKe. The existing rules of FDI as implemented by SoMoKe are 1. FDI companies can ask for dollars for their profits after paying 40% income tax. 2. And, sometimes, even than 40% tax is waived !!! eg Mauritius companies, Singapore companies etc. don`t pay any taxes on short/long capital gains and there are ways to convert operating profits into capital gains. 3. And if Foreign company decides to keep profits inside India, then most often, they are given full tax exemption, which kills local businesses. None of these argument apply when one uses FB, WhatsApp etc. as they are free. If you use western Windows or Mobile, then also, forex loss is fixed. It does NOT create any FUTURE liabilities of forex. Whereas when a foreign company is allowed inside India, it creates potentially unbounded forex liability for its future profits. The Chinese in the beginning had the rule that foreign company can only repatriate profits equal to or less than its export earnings. In Other Words, the FDI as implemented by Chinese in China in 1980-2000 was so that repatriation burden was zero. Telling this to most SoMoKen-andhbhagats would be like reading bhaagawat to a buffalo. All they like to do is slogan shouting, throw punch lines, make jinx, cite poems and come up with create full forms like FDI means First Develop India followed by 4-digit-ID logic that if you are anti-FDI then it means you are anti-development and anti-India !! In fact, the most recent argument we got from NaMo-bhagats was “instead of bashing GoI policies, you should take broom and clean near by roads, gardens and slums and let the faulty policies continue!!. Saare tark par jhadu fer diya !!! But still, it is our duty to spread the word and so we should tell the importance of repatriation burden that debt, FDI etc. create. ======================= Debt crisis is when the borrowers income is below the interest, forget principal repayments. And repatriation crisis is when (export - import + NRI transfers) are below even profit repatriation, forget capital repatriation. . To explain, I will give a summary of FII, FDI, trade, forex debt etc. (1) Indias forex debt is $425 billion of which $90 billion is to be paid in next 12 months. In addition, (2) India has FDI + FII till date is about $360 billion. The capital has appreciated and so it may be worth $400 billion or more. But selling all assets in short time can cause fall in property value, as well as fall in rupee, and so that can bring down the net dollar value to as low as $200 billion. So capitals potential dollar burden is $200 billion to $400 billion (3) Plus Indian PSU banks have insured forex debt of Indian private companies, which may be $50 billion. (4) And trade deficit = imports - exports = around $130 billion per year !! (5) Forex reserves are $300 billion Now say no new loans are taken and no new FDI comes, Then within one year, we will have only $300 - $130 - $ 90 = $80 billion left. And that will become zero in next 4 months of debt repayments and trade deficit !! and there won’t be a dollar left to pay for imports, interest, principal, repatriation of profits and repatriation of capital !!! thehindu/business/Economy/india-has-to-repay-172-billion-debt-by-march-2014/article4860979.ece In Other Words, we already have debt-cum-repatriation crisis at hand Forex reserves - 300 billion USD (including Gold)-rbidocs.rbi.org.in/rdocs/Wss/PDFs/02T_WSS060614FL.pdf tradingeconomics/india/total-reserves-includes-gold-us-dollar-wb-data.html External Debt - 426 billion USDfinmin.nic.in/the_ministry/dept_eco_affairs/economic_div/External_Debt_QDEC2013.pdf FDI (2000 to 2014) - 323 billion USDdipp.nic.in/English/Publications/FDI_Statistics/2014/india_FDI_March2014.pdf Solution - We (many citizens) should ask our MPs via email, sms etc. to bring policies to increase our forex income and improve our skills. Please see chapter 20,26, 74, 3linelaw.wordpress and smstoneta for more details. Non-solution - Keeping mum for 5 years and not interacting with our public servants and not telling them our suggestions. Because if we do not do anything, we are going into a debt trap, having to pay more and more, having to give away our mineral and other resources, becoming empty from inside. We should not increase our borrowing, we should increase our income.
Posted on: Mon, 10 Nov 2014 10:39:56 +0000
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