The Hindu Business Line : Infrastructure development

To achieve and sustain economic growth of 8 per cent and above, and to make the liberalisation of the economy a success, the country must heavily investment in development of physical, financial and social infrastructure.

Present savings rate of 24 per cent cannot provide the support for developing the needed infrastructure.

The Government can consider making tax payers, particularly income-tax assessees in the income bracket of Rs 5 lakh and above, subscribe to this fund. Income-tax relief by way of refund at 5 per cent on the amount so subscribed can be offerred to attract the assessees. The fund can have a lock-in-period of three years and carry a simple rate of interest of 5 per cent per annum.

Apart from dependability of the funds, the other advantage will be the recurring flow on an year-to-year basis. Such a fund can help to bring down the quantum of black money over a period as tax-evaders will be gradually tempted to subscribe to this, especially when the source is not questione. Advantage for the subscribers will be the investment opportunity with safety and liquidity. Instant tax relief would be an added attraction.

Assured return and nomination facilities, easy management of funds and a satisfaction for having subscribed and participated in nation-building are further positives. The Government can also offer NRIs some incentives to subscribe to this fund. There is reportedly Rs 5,00,000 crore, estimated black money in this country but unfortunately it does not surface for socio-economic development. It is time for Government to tap these resources for development. The fund should be kept open for subscription till such time that the targeted amount is reached or the number of tax assessees increases considerably over a period.

T. V. Gopalakrishnan

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