Wednesday, 4 December 2013

Send Ramamritham to Mars

Statutory Warning : This piece is not a sober, reasoned, point of view. It is an unadulterated rant. It may be highly biased and devoid of much logical argument. But , what the hell, once in a  while a blogger deserves a good yell. So here goes

I wish the Indian Space Agency had hit upon the idea of sending somebody with a one way ticket in the recently launched Mars expedition. I would have happily sponsored the ticket for Ramamritham. Especially the Ramamritham who sits in the Income Tax Department.

What has prompted this rant is the antics by Ramamritham against Nokia. He has been going against Nokia disallowing their royalty payments as an expense and demanding tax on them. When the company refused, he went to court and has frozen their main factory in Sriperumbudur.  By this act, he is jeopardising the sale of Nokia's telecom business to Microsoft. Succumbing to sheer blackmail, Nokia has offered to pay some Rs 2000 crores just to get Ramamritham off its back - so that it can include the Indian operations in the sale to Microsoft. This is nothing short of extortion. But Ramamritham has refused this amount too to settle the case .

This specimen has a problem with every global company that operates in India. He has a problem with their linkage with overseas operations - maybe transfer pricing., maybe structuring of M&A, maybe whatever. He has gone after Vodafone in the famous case, he is going after IBM, he is going after Nokia and no doubt he will be going against every global company that operates in India.

I am not for one moment saying that global corporations are saints. Far from it. But these sort of tax planning actions are done by all companies in all corners of the world. Remember, tax avoidance is not a crime; only tax evasion is. Every company cannot be a rogue. In true Ramamritham fashion he is going after soft targets and cares two hoots about its fall out effects on the Indian economy. No  global M&A transaction is possible these days without India proving to be a massive headache or else excluded altogether. Every Indian operation now has to staff an oversize tax department to cater to Ramamritham. Only an absolute idiot will invest in India today. India is not some special divine country which is separate from the rest of the world. If Ramamritham has a problem with transfer pricing, he should go to the WTO and negotiate tax treaties with the entire world. He should also remember that the shoe can equally be on the other foot too - other governments can also screw Indian companies in their respective countries. The US equivalent of Ramamritham has to only do a fraction of what he is doing and the Indian IT industry will come to a halt.

The British government and the Finnish government, to name only two, have intervened at government levels and asked the Prime Minister to rein in Ramamritham. But Ramamritham cannot be stopped. Once he has gotten into his silly head that he must do something, not even an asteroid hit will stop him.

If Ramamritham is seriously interested in increasing tax revenues, he should at least be man enough to go after the people who do not pay any tax at all. Only 3% of the Indian population pays income tax. The rest of the 97% don't. If he has the guts, he should go after the blatant tax evaders, who number in the millions. By going against respected companies, who are tax payers,  he is basically saying to the world - come to India at your peril. We would be delighted if you don't come to India at all . In Ramamritham's view of the world, it is best if there is no economic activity at all - for then his tax department will be perfect - there are no taxes to collect and hence nobody to go after.

Deliver us God, from this parasite who infests us. The only route to salvation for India is to send Ramamritham to Mars.


Prats said...

I have always said that India growth story and the lure of Indian markets and talent has never been because of the government but despite the government.

Ramesh said...

@Prats - Oh sure. We have done a little better over the last decade, no thanks to the government. But the trouble is now that petty bureaucrats are actively impeding the India growth story.

Deepa said...

Imagine we could have done so much better if only we were better managed. There is got to be a way to get the house in order. There is so much going on in the international news about India's trade policies (of course there is masala, but we gave them a mouthful to chew upon). We probably would come to a brink like in the 90s and get our arms twisted by outsiders into behaving ourselves. Thanks to the quixotic Ramamritham.

Ramesh said...

@Deepa - In fact the reality is even worse than the "masala" reporting in the foreign press. We are back to the bad old neta babu raj and viewing all the "vaishya class" as scoundrels, and undesirable pests.

Sriram Khé said...

Oh no, the snake lady has been here already! hehehe ;)

Ok, on the topic at hand, I thought Ramamritham was a Martian! Muahahahaha ;)

Ok, I will be serious, if you will then call a doctor to help me. Hahahahaha!

Ok, ok.
If I thought that the old Vodafone thing was something beyond my comprehension, this one is even worse. India is one hell of a bureaucratic nightmare. When they say the buck stops here, they literally mean that everything comes to a stop at Ramamritham's desk.
Now, I have no clue though about all the M&A and transfer pricing issues involved. I will assume that, unlike me, you don't bullshit ;) (ok, slapping myself to be serious!)

On a related note, on the bureaucracy and Ramamrithams, my father has been describing the various steps my sister has been going through in order to get the various certificates and other paperwork done related to my BIL's death. Every time I think I have heard it all, it turns out that there is more ... yet, father calmly tells me that this is all the norm. Once he told me though that I would have started punching everybody in those offices!

I will never understand my old country :(

Anonymous said...

Bureaucrats head are filled with power than knowledge & thinking. Their ego must be crashed with continous training to update their knowledge.

Ramesh said...

@Sriram - Calling 911- please rush to the good Prof as he is showing signs of going ga ga :):)

I can perfectly understand what your sister must be going through . Having said that, I am willing to bet it is the same in every country - these days that is the unfortunate fact of after life.

@Anon - True their heads are filled with power. Trouble is they are actually very intelligent. Over intelligent - and that is the problem.

Reflections said...

"Only 3% of the Indian population pays income tax. The rest of the 97% don't."

This is unbelievable...I mean, sure there are a lot of tax evaders in our country but 3% is just too low a figure. How does the Govt manage??? I'm sure there is some error here Ramesh.

Reflections said...

"In Ramamritham's view of the world, it is best if there is no economic activity at all - for then his tax department will be perfect - there are no taxes to collect and hence nobody to go after."

U said it, this is exactly the mentality of most public servants:-/

Ramesh said...

@Reflections - Oh yes only 3% of the population pays. The number of tax filers is some 30 million. In a population of 1.1 billion or so - its just 3%.

To be fairer as a percentage, if you eliminate young children and the very old from the population, the % of tax payers is somewhere in the region of 10% of the eligible population. 90% of Indians are having a free ride.

Vincy said...

Am I supposed to feel good about the fact that I am part of the 10% who pay tax in this country? or feel bitter that 90% of my countrymen are having an easy ride?

Vincy said...

Nice to see so many posts from you. thanks and keep them coming!!

Ramesh said...

@Vincy - Both good and bitter I'm afraid !! Flattered by your comment :)

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