Power of Ignored Skills

Friday, 7 December 2018

How proper utilization of tax can lead to progress


Rajesh studies in Class 8th, while doing homework he noticed that his Grand Father, Mr. Ashok Nath who retired as school teacher almost 20 years back got frustrated while reading newspaper and folded it hurriedly and kept on the table, Rajesh rushed to him and asked his Grand Father “Grandpa, what happened, why you are upset?”
Grandpa replied “Dear Rajesh, I am upset with the way our politicians are announcing freebies for winning election and also there is a growing tendency of avoiding tax by people”.
Rajesh said “OK, but what’s wrong in this, its people’s money and going in the hand of people or remaining with people. Government is supposed to help the poor, isn’t it?”
Grandpa replied, my dear son, to help someone, you need to be strong. Governments can help poor only if Government is wealthy and full of resources, poor Governments can’t help its poor citizens”
Rajesh got further puzzled. He said “Grandpa, I am not getting your point”
Grandpa said “Fine, let me tell you a story, you will understand the importance of tax collection, wise use of collected tax”
Ramnagar and Laxmangarh are neighboring village in district Pratapgarh, Uttar Pradesh. The population and size of both villages were almost same in year 1930, both villages were almost cutoff from any development. Kuccha house, no road, no school, no hospital, and no police station so literally no development, both villages were almost dependent on agriculture. Whatever little extra crop production they were doing, they used to sell in Pratapgarh city and with the money in hand, they used to buy items of daily use like cloth, medicines, utensils etc.
Irrigation is most important component of agriculture. Both villages were fully dependent of rain. Whenever there was good rain, they used to get healthy crop i.e more produce, which in turn was giving more money in hand. But the problem was that due to terrain, it was not possible to retain rain water. So the risk and dependency on rain was very high.
Sarpanch of Ramnagar thought of building check dam in his village so that with help of the check dam, rain water can be stored in artificial reservoir. Villagers got excited with the idea and they were willing to contribute manual labour in this noble cause. But alone manual labour was not enough to build check dam. It required Brick, Cement, Sand and Steel bars to construct check dam. To buy all these things Sarpanch proposed tax on villagers. Villagers never heard the concept of tax. Some of the villagers opposed the move with logic that their ancestors have managed to live so long in the same village then why this unnecessary check dam construction through tax. Ramnagar Sarpanch convinced villagers that the check dam will help in irrigation even when there is low rain and thus better agriculture produce was guaranteed leading to prosperity. After lot of struggle, total tax collected as per land size was Rs 40000 (that point of time it was huge money) for check dam construction.
When neighboring Laxmangarh villagers heard about construction of check dam they laughed on resident of Ramnagar that Sarpanch is making fool out of them.
Soon check dam was ready. Next year there was good rain hence no benefit of check dam was visible in Ramnagar as there was abundant water. Ramnagar people started blaming Sarpanch of wasting tax money.
Next year there was huge shortage of rain. Laxmangarh where there was no dam, they were blaming nature and helplessly saw the damage of crop, while there was abundant water stored in Ramnagar (courtesy to check dam). Ramnagar had very good crop. They sold the excess produce to city and earned handsome money. With better earning, farmers bought high yield seed and fertilizer. These steps clubbed with assured irrigation had given bumper crop, thus extra production had given extra money in hand of Ramnagar villagers next year too. With more money with them, they bought good clothes, ornaments, better wheels for their bullock cart.  Now Ramnagar villagers were happy with Sarpanch and decided to follow whatever he says. Sarpanch decided that on the basis of amount of crop sales in city, there will be tax imposed and collected tax would be used for common services. Total tax collection was Rs 10000 in that year. He used this amount in constructing kuccha road. He constructed small clinic and school. He paid teachers and doctors to come to his village and work. Soon village kids started learning, there was no need to take patients to city and spend money on transportation (because medical facility was in village) which made villagers happy.
Village Ramnagar become model village and example of prosperity. Nearby village dwellers used to come and admire the development while Laxmangarh was in same old shape. No roads, poor people, no school, no clinic, torn clothes. Finally Laxmangarh residents realized that because of check dam, Ramnagar people have become prosperous hence agreed to follow footsteps of Ramnagar. They also constructed the check dam and attained almost similar prosperity.
After few years, there was election for Sarpanch in Ramnagar (which attained prosperity first). Lot of candidates filed nomination. Existing Sarpanch put agenda of good road, better facility in clinic and school. Another candidate Ramadhar lure voters with promise of freebies like pension for old people, marriage assistance money to girls, free bicycle to girls. Ramadhar also promised that there won’t be any tax collection from small farmers (small farmer i.e almost 40% of villagers).  People of Ramnagar got excited with the poll promise and voted in favour of Ramadhar. Because of tax exemption given to small farmers, the tax collection in that year was only Rs 16000 against last year Rs 20000. New Sarpanch spend almost Rs 12000 on freebies which he had promised. Villagers were very happy to see new Sarpanch as man of words and true messiah of poor. Because of freebies and exemption only Rs 4000 was left for development work. This amount was not enough to pay salaries of doctors and teachers, buying new medical equipment’s, medicine, repair of clinic and school building and roads. Therefore Ramadhar decided to increase tax on big farmers. Again villagers celebrated this step as masterstroke for narrowing the gap between rich and poor. This annoyed some of big farmers who decided to settle in city and opting for gain trading rather than agriculture. Because of this some of rich farmers left the village, next year tax collection had gone down to Rs 12000. For freebies, the Sarpanch needed entire Rs 12000 and he had no money left for salary and repair work. Soon teachers and doctors left the village. Villagers were clueless on what was happening. Next year again there were elections, this time people were determined to remove Ramadhar and elect earlier Sarpanch. Ramadhar tactfully created cast tensions among villagers. As he was from the cast having majority of the population he again won the elections. Some of the rich farmers bribed Ramadhar to manipulate their earning record so that they have to pay less tax, which Ramadhar did by taking the bribe. No wonder, next year tax collection was just Rs 9000. With time, the condition of village amenities had further gone down. Ramadhar stopped even pension for old citizens.
While on the other side in Village Laxmangarh, people had elected Suresh despite other candidates offering huge freebies. Suresh realized that post crop harvest there is always risk of untimely rain and thus crop can get damaged. Hence with help of collected tax, he constructed large shed where villagers can keep their produce safely. He constructed small guest house also so that merchants from city can come and stay in village and buy stuff in bulk. He paid agriculture experts to come to his village and educate people on methods to increase farm productivity. All these steps helped to produce more and sell at better price thus next year tax collection had reached Rs 25000. Next year he had given loans to small farmers so that they can buy high quality seed and fertilizer and produce better crop. This idea worked and within 2 years poor farmers were in much better condition and returned the loan. Suresh used the tax amount to build Pakka road, enhancing facility in clinic and school. He further put drainage system thus water borne diseases had gone down. All these helped in prosperity of villagers and soon the tax collection had gone upto to Rs 35000. More tax collection was giving opportunity to Suresh to spend money for welfare i.e if somebody is really needy for costly medical treatment or poor person wants to get his daughter married in such cases, with common census, money was given to needy people. The village was prospering. Villagers made nice houses, they were wearing good clothes, their children were getting decent jobs in city (because of education), and people were healthy.
After hearing the progress of Laxmangarh, villagers from Ramnagar visited Laxmangarh and were wondering how come this laggard village that too just 2 Kms far from their village became so prosperous. Finally Ramnagar village people realized importance of tax collection, its right usage and electing honest candidate.
Grandpa asked Rajesh “So my son, what is your take out of this story?”
Rajesh Said “Grandpa, this story has helped me to understand the reason behind your disappointment, this is not just story of 2 villages but entire country. People have to decide, if they want freebies, cast based politics or short term pain for long term gain. I will share this story with my friends so that they can make their parents to understand ill effects of freebies and tax avoidance”
My request to all, please share this story for bright future of our country. Are you ready for doing this much?
Jai Hind!!
Manoj Tripathi
(Purpose of this write-up is not to hurt sentiment of any person or group. The view expressed in the article are personal)

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