My Economical thought

I was thinking how do government increase employment? Does that mean they will increase government jobs and employ promised percentage? Which is never possible.

I would like to tell you a small story.

A man was riding on a horse with his dog during a hot summer, after some distance horse felt thirsty and it could not carry any load hence both man & dog had to get down and start walking along with the horse. After some distance they found a pond which just had little water (just for a person & dog thirst can satisfy or the horse alone) .

Given the amount of water 

  1. All three can share the given water - such a way that all three can start walking

  2. The man and dog can fulfill their thirst, but the horse has to remain in thirst

  3. Horse can fulfill the thirst, man and dog has to remain in thirst

Of these which option do you prefer? Assume if we choose option 

 Option 1-    All three will share small portion of water, and all three can start walking 

                     independently - sound like a right choice, but let’s look at the other options

 Option 2 -   Horse may die, or the man & dog probably have to carry the horse 

                         - Which is not quite possible so let’s not choose that.

 Option 3   -  The horse can carry both man & dog and start the journey as it be-ginned

Now with option 2 ruled out. Out of option 1 & 3 which one do you prefer?

Option 1:  All three will be alive, but all three have to walk

Option 3:  Since the horse thirst is fulfilled, it can take them to the destination faster but there                                         are chances the person/dog could die of thirst.

  

Now let’s replace the characters, here the horse is a company and man is the employee and dog is just another character.

The fact is company carries people. In order for the people to be employed companies should do well.

Now let’s go to our story, if our economy is in deep crisis i.e., all three are struggling for life I think it’s a safe bid to go with option 1 for time being, once the situation improves change the policy towards option 3. i.e. in this case lets go with option 1, and assume after some distance there is similar quantity of water available in that case prefer option 3 by doing so horse can carry people which indirectly saves person/dog energy. 

Moral of the story:

Ultimately the government should ensure companies does well in order to increase employment.

Below are some of the things i think can improve our economy / employment

Reduce company Tax (Esp for Small/Mid scale industries):

     If their products are consumed in India - so that products will be cheaper for people 

       if the sector capable of providing more employment

Consumer Product Tax: 

  Indian product (used by low/middle class - essential products) tax should be reduced  

   

Revise Individual tax:

      Need to take statistics of salaried people, and ensure only the lower / middle class people does not have to pay direct taxes.   say for 3 lakh - no tax, followed by minimal tax upto 6 lakhs.

The idea is people should have money, so that they can purchase products (indian products should be cheaper in our market) it can increase production - which in turn will increase employment

Company tax cut, will result in more production - 

         so more employees can be added / may invest in other sectors etc.. 

          consumer/people will have to pay less  than earlier, that means they will purchase another product in the saved money or invest the saved money. In either case it will be beneficial for the government.

      

Now with all these tax cut, how do government earn?

More production means, more rawmaterial purchase, more employment/trading, more purchase (more consumer tax), gradually no of individual tax payers will also increase.

Rather than taxing huge money from a small group, we should tax small money from large group!