1. While we continue to believe that policy reforms will eventually set everything right in our country, the blunt truth is that they have always been misused whenever they were unleashed.
2. For instance, instead of establishing world-class export-worthy companies, promoters take advantage of concessions in these reforms by:-
a) setting up units with loans from financial institutions in tax-exempt areas,
b) over-invoicing imported machinery and raw materials,
c) holding excess payments abroad illegally,
d) issuing shares by propagating export worthiness,
e) selling their majority stake to gullible investors,
f) pledging the rest with lending institutions in lieu of original loans,
g) creating multiple subsidiaries in diverse areas for tax avoidance,
h) raising deposits from investors and then continuing to default,
i) enjoying depreciation,
j) opening financial arms for further borrowing,
k) shutting down production and becoming sick, and
l) moving on to the next industry offering government concessions.
3. Most businesses have minimum targets for tax outgo, priorities for identifying loopholes in mergers, sell-offs, acquisitions, joint ventures and global networks, as well as systematic expertise in fudging numbers and tests, besides hoodwinking rules and procedures.
4. In fact, in every set of reforms, opportunities have invariably been grabbed by thriving on fraud, exploitation and misuse.
5. Therefore, the pertinent question is whether our underlying fraudulent mindset and business cunningness would ever get corrected, in order to make ethical and professional practices created by policy reforms worthwhile.
2. For instance, instead of establishing world-class export-worthy companies, promoters take advantage of concessions in these reforms by:-
a) setting up units with loans from financial institutions in tax-exempt areas,
b) over-invoicing imported machinery and raw materials,
c) holding excess payments abroad illegally,
d) issuing shares by propagating export worthiness,
e) selling their majority stake to gullible investors,
f) pledging the rest with lending institutions in lieu of original loans,
g) creating multiple subsidiaries in diverse areas for tax avoidance,
h) raising deposits from investors and then continuing to default,
i) enjoying depreciation,
j) opening financial arms for further borrowing,
k) shutting down production and becoming sick, and
l) moving on to the next industry offering government concessions.
3. Most businesses have minimum targets for tax outgo, priorities for identifying loopholes in mergers, sell-offs, acquisitions, joint ventures and global networks, as well as systematic expertise in fudging numbers and tests, besides hoodwinking rules and procedures.
4. In fact, in every set of reforms, opportunities have invariably been grabbed by thriving on fraud, exploitation and misuse.
5. Therefore, the pertinent question is whether our underlying fraudulent mindset and business cunningness would ever get corrected, in order to make ethical and professional practices created by policy reforms worthwhile.