30th November - Economic News of India
Day 376, 12:51
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Published in India 
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by
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by dionysus
Taxchange food
The Indian Congress has voted a tax change law yesterday. The proposal was to lower VAT and Importtax for food to 5%. With this the Indian Congress hopes to improve the food supply in India. India is just starting out as a country and there is little food available. India has just two food companies, which are slowly producing more and more food for growing India.
Harming India's economy
This economic analyst believes the low importtax will harm our young economy. The Indian Rupee is quite an expensive currency. What this means for foreign countries is that they will make lots of money when they export to our country. For Indian companies it means that they have to compete with foreign companies who can produce it for a much lower price. India, already without many companies won't have any new food companies this way.
Food companies in India will have to lower the prices to still be able to sell their products. By lowering prices they will make less profit with which to pay Indian employees. In the end it will mean they won't have enough money to hire new employees and even will have to fire Indian employees. A solution would be lowering wages, but by doing this less people will be willing to work at an Indian company and Indian employees will be able to buy even less products; less guns, gifts, houses and food for the hard-working Indian.
Why not an importtax change on gifts?
We don't have gifts companies yet so we actually need these! Food is being produced in India, gifts aren't. It wouldn't hurt our economy yet if we would import these (although new companies won't emerge either).
Gifts could compensate for the lower wellness by lower quality food!
Arguments given by Indian congressmen
Congressmen tell us that it is needed to develop India's economy. They even tell us that when food companies will produce enough food for the Indian people, importtaxes will be raised again. However, will there ever be room for Indian companies, when they can't compete with the foreign companies exporting it and making lots of money? No there won't. Existing companies will have to quit and only foreign companies will prevail.
Another argument given was that currently foreign companies are not overflowing our market (yet) and not many companies are willing to pay 20 gold for an export license. I cannot agree with this argument. With our currency currently at this worth, it is very interesting for foreign companies to buy an export license. Gold can be bought for around 20-25 rupees. Companies get their investment of 20 gold back easily!! As soon as word gets out, many foreign companies will soon appear.
There was also the argument that the Indian market can currently only provides Q1 and Q2 food. Import would give India Q3, Q4 and Q5. Great, but it will also provide foreign Q1 and Q2 food, out-competing Indian based companies. What do we need Q3, Q4 and Q5 food for? Our highest quality company is a Q2 company, so we only need Q2 food, maybe Q3. If you won't allow for Indian companies to grow by themselves, India will never provide it's own food and it will make India very vulnerable (at the mercy of foreign powers to give us food).
Congressmen with a double agenda?
Is this congress actually interested in the development of our country is the question that arises with me. I have seen it before in Ireland. A Rumanian guy became president of Ireland a while ago and made sure importtaxes were lowered and Rumanian companies could make lots of profits on the Irish market, out-competing Irish companies.
I am afraid many people in congress are still only thinking about their former country and not in the best interest of our newly independent country of India. If India lacked the food, the Indian government would set up companies for India and won't let foreign companies dictate the market.
I know there is not a lot of food available yet at the market, but this is also to blame at the low number of employees and most employees getting jobs in raw materials sector. Which also makes me afraid that India will merely be used as colony for raw materials and profits.
By not giving own Indian companies a chance, India will ruin it's future, because no Indian company will be able to compete against foreign countries at this exchange rate.
It might be a pessimistic view of the future, but I believe this to be not too far from the reality. How can you ever stimulate people to start companies in India if there is no room for Indian companies to develop?
I am not alone in my fear and I hope people who are true in their beliefs to build up the Indian economy and country will also see the mistake that has been made.
All I can say is that I hope Indian people will support Indian products and will work at new Indian companies to develop the economy.
Please change the importtax back to at least 50% so Indian companies can develop and the Indian economy can develop. And instead lower taxes on Gifts, so these will be available in India. Support our country!
The Indian Congress has voted a tax change law yesterday. The proposal was to lower VAT and Importtax for food to 5%. With this the Indian Congress hopes to improve the food supply in India. India is just starting out as a country and there is little food available. India has just two food companies, which are slowly producing more and more food for growing India.
Harming India's economy
This economic analyst believes the low importtax will harm our young economy. The Indian Rupee is quite an expensive currency. What this means for foreign countries is that they will make lots of money when they export to our country. For Indian companies it means that they have to compete with foreign companies who can produce it for a much lower price. India, already without many companies won't have any new food companies this way.
Food companies in India will have to lower the prices to still be able to sell their products. By lowering prices they will make less profit with which to pay Indian employees. In the end it will mean they won't have enough money to hire new employees and even will have to fire Indian employees. A solution would be lowering wages, but by doing this less people will be willing to work at an Indian company and Indian employees will be able to buy even less products; less guns, gifts, houses and food for the hard-working Indian.
Why not an importtax change on gifts?
We don't have gifts companies yet so we actually need these! Food is being produced in India, gifts aren't. It wouldn't hurt our economy yet if we would import these (although new companies won't emerge either).
Gifts could compensate for the lower wellness by lower quality food!
Arguments given by Indian congressmen
Congressmen tell us that it is needed to develop India's economy. They even tell us that when food companies will produce enough food for the Indian people, importtaxes will be raised again. However, will there ever be room for Indian companies, when they can't compete with the foreign companies exporting it and making lots of money? No there won't. Existing companies will have to quit and only foreign companies will prevail.
Another argument given was that currently foreign companies are not overflowing our market (yet) and not many companies are willing to pay 20 gold for an export license. I cannot agree with this argument. With our currency currently at this worth, it is very interesting for foreign companies to buy an export license. Gold can be bought for around 20-25 rupees. Companies get their investment of 20 gold back easily!! As soon as word gets out, many foreign companies will soon appear.
There was also the argument that the Indian market can currently only provides Q1 and Q2 food. Import would give India Q3, Q4 and Q5. Great, but it will also provide foreign Q1 and Q2 food, out-competing Indian based companies. What do we need Q3, Q4 and Q5 food for? Our highest quality company is a Q2 company, so we only need Q2 food, maybe Q3. If you won't allow for Indian companies to grow by themselves, India will never provide it's own food and it will make India very vulnerable (at the mercy of foreign powers to give us food).
Congressmen with a double agenda?
Is this congress actually interested in the development of our country is the question that arises with me. I have seen it before in Ireland. A Rumanian guy became president of Ireland a while ago and made sure importtaxes were lowered and Rumanian companies could make lots of profits on the Irish market, out-competing Irish companies.
I am afraid many people in congress are still only thinking about their former country and not in the best interest of our newly independent country of India. If India lacked the food, the Indian government would set up companies for India and won't let foreign companies dictate the market.
I know there is not a lot of food available yet at the market, but this is also to blame at the low number of employees and most employees getting jobs in raw materials sector. Which also makes me afraid that India will merely be used as colony for raw materials and profits.
By not giving own Indian companies a chance, India will ruin it's future, because no Indian company will be able to compete against foreign countries at this exchange rate.
It might be a pessimistic view of the future, but I believe this to be not too far from the reality. How can you ever stimulate people to start companies in India if there is no room for Indian companies to develop?
I am not alone in my fear and I hope people who are true in their beliefs to build up the Indian economy and country will also see the mistake that has been made.
All I can say is that I hope Indian people will support Indian products and will work at new Indian companies to develop the economy.
Please change the importtax back to at least 50% so Indian companies can develop and the Indian economy can develop. And instead lower taxes on Gifts, so these will be available in India. Support our country!
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Comments
In a way you are right. But do not forget that there is another wllness formula. Q2 food does not give 2 wellness increase.
If you are at 90+ wellness only 60% of the hoiuse or food will give wellness increase.
And if you are aroound 50% wellness your out put in work is low. So you need either good quality food (much better than the quality where you work) or much gifts. But gifts are expensive too because of the diamond price.
But 5% import tax is really much to low.
I know, cocoamok.. but wellness will level at some point, even if the food quality is as high as the place you work.
India also needs a gifts company to develop. For now India would have been better of lowering import on that, rather that lowering taxes on food.
Voted and agreed.
good analysis, voted
However, i think that foreign companies now are ESSENTIAL for India. They pay taxes so there is an earning for everyone 🙂
In your analysis you don't take into consideration that the indian market is a very small market at the moment... I don't see the trouble of a foreign invasion; however, if indian companies will provide enough food at a reasonable price, I'm sure indian government will raise taxes
Well Gruppo, I think Dionysus explained enough what happens if the taxes won't raise. Foreign companies will make the sales here because they can produce much cheaper, that means that the money made here won't stay in India, it will go to foreign economies. Buying foreign goods does not improve the Indian economy, that's very important to keep in mind. If you wan't a good economy you'll need to have strong companies within your country, before you start accepting foreign companies. Because when your own companies are rich and can produce cheap, foreign companies won't make much profit here because they have to sell their goods cheap too, which means that more products will be bought from Indian companies and that means that the money will stay in the Indian economy, instead of being spend on gold or something in, let's say, the Swedish economy.