‘Let corporate leaders have a say in how taxpayer money is spent’ (actual headline)

You have to admire the cut-out-the-middlemen directness of this campaign by the Times of India.

In summary:

In his budget speech on February 28, 2013, finance minister P Chidambaram announced a 10% surcharge on those with taxable income exceeding Rs 1 crore. He also announced that the surcharge on domestic companies would go up to 10% from 5% where the total income exceeds Rs 10 crore. [Approximately $200,000 AUD] As a means of raising resources, such measures makes little economic sense. The experience of the last two decades and more has shown that moderate tax rates encourage tax compliance and actually boost revenues.

A far better way of balancing the fisc [budget/books] would be to cut down on wasteful expenditure. As things stand, the government is accountable only to Parliament on how taxpayer money is spent. In other words, the political class has a monopoly on determining how this money is spent. Common sense tells us that the instincts of the political class will be to spend money on what they perceive to be most populist, not on what makes most sense in economic terms. What we need, therefore, is a mechanism to act as a check on these populist instincts. [emphasis added] We suggest that the best way of doing so is to constitute committees of eminent and credible corporate leaders representing various sectors of the economy to advise the government on expenditure. These are people who have a wealth of experience in managing large sums of money and who are not constrained by the need to ‘buy’ votes.

So, in short, the best way to deal with budget shortfalls is not to increase revenue, but to appoint a committee.

It’s interesting that the campaign assumes that the public service and Parliament are occupied by the ‘political class’, a discrete body.  Again, can’t tell whether that’s refreshingly clear eyed or a symptom of a broken system.

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