The following letter was sent to Indian President A.P.J. Abdul Kalam by Vasant J. Desai, replyed by A.K. Mangotra [Joint Secretary to the President of India and Again Letter to A.K. Mangotra by Vasant J. Desai.

1^st September, 2004

To,
The Hon'ble Shri A.P.J.Abdul Kalam,
His Excellency the President of India,
Rashtrapati Bhawan,
President-Secretariat
New Delhi - 110 004

Respected Your Honour,

Sub :- Release of my book on Website : "INDIA IN DEBT TRAP 2007 ? REMEDIES", by Vasant J. Desai, Advocate -Gujarat Hight court, Foreword by shri K.H. Kaji, FormerActing Adocate-General of Gujarat High Court.

Computer pages - 250.
Website pages - 153
Actual pages - 110
Website - www.indiaindebttrap.com
Email Id - vjdesai@indiaindebttrap.com

I am advocate, practicing in the Gujarat High Court and has written the above book, Which is released on the website.

I am sending with love and affection a copy of the above book for your Honour, for reference and information.

The economic condition of the India has considerably deteriorated within last 4.5 years and the debt has increased form Rs. 7.5 Lac Crores to Rs. 17 Lac Crores and the Interest Payment Liability has increased form Rs. 78,000 Crore p.a. to Rs. 1,29,000 Crore p.a.

We are not able to run the Government from the Revenue Receipts for day to day expenses namely :-

1. Interest Payment Liability;
2. Defence;
3. Pay;
4. Pension;
5. Subsidy and
6. Grants

We had borrowed Rs. 95, 000 Crore p.a. for the last two years in order to meet the above Non Plan Expenditure as the Revenue Receipts are not sufficient. The Plan Expenditure is entirely from the borrowed funds.

I have suggested number of remedies with regard to reduction of Interest Payment Liability, abolition of Dearness Allowance, reduction of liability of the Pension of existing pensioners and increasing the Revenue Receipts through the Personal Income-Tax to the extent of about Rs. 50, 000 crore.

I have suggested the number of remedies to increase the income and reduce the deficit, so that we can achieve the goal laid-down under the Fiscal Responsibility And Budget Management Act. 2003 by 31st March 2003.

I have dealt with the major problems of the Corruption, which can be controlled on proper provisions of Income Tax namely :-

1. Tax Every Income
2. Exemption Limit Minimum
3. Rate of Tax Low
4. Assure Tax Payer that he will get pension at the age of 65 on his payment of Income Tax with contribution. And Income and Assets of Tax-Payer should be computerized, so that the generation of the black money can be controlled.

I have also written one chapter " What People Can do? In Part IV, "India in Debt Trap-2007 ? Remedies, Which is relevant for our Country with regard to duties and obligations of a Citizen in order that poverty can be reduced. The copy of the said Chapter is enclosed for ready reference.

I will be highly obliged, If Your Honour is kind enough to acknowledge the receipt of the book and comments, if any on the book.

Wishing Your Honour good health and divine spirit.
                                                                                                                      Yours,

                                                                                                               (Vasant J. Desai)

Replyed by A.K. Mangotra [Joint Secretary to the President of India]

Dear Shri Desai,

Your letter of 11^th October, 2004 addressed to the President of India and enclosing a document entitled "India in Debt-Trap-2007? Remedies" has been received in this office and gone through. While most of the document appears to be a collection of extracts from various Government and other published sources, the portions dealing with suggestions and remedies appear to be minimalist.

With Regards

Yours Sincerely

A.K. Mangotra

Shri Vasant J. Desai
Advocate
4-B, Jadav Chambers
1^st Floor, Ashram Road
Ahmedabad - 380009

Replyed by Vasant Desai to A.K. Mangotra [Joint Secretary to the President of India]

1. Brevity of Expression
2. Slow Decision Making
3. Absence of value of time

1. Dr. Raja J. Chelliah Report (1991) to delete deductions and computerize Income Tax Department not fully implemented.
2. Fifth Central Pay Commission Recommendations to reduce 30% Staff, 6 Days working, 4 National Holiday not implemented and Pay scales with D.A. granted.
3. The National Character is to accept benefits without complying obligations.

The Interest Payment Liability has increased to 1,29,000 crore per-year in 2004-2005, which was only 21,000 crore in 1991-92, which is about 50% of revenue receipts. I have quoted in pages 31, 32, the extracts from the speeches of shri ManMohansingh (Present P.M., 1991 to 1995)

Page No. 33 : Suggestions to reduce interest Payment Liability.

Dearness Allowance :

The fifth Central Pay Commission has observed that D.A. is discontinued in the foreign countries as it increases inflation. Still 12% D.A. was granted in 1998, which was increased to 62% and 50% of D.A. is now merged with pay.

Remedies on D.A. Result [Page 47]:

All states have become bankrupt. There was a conference of the Chief Ministers with the Prime Minister held in June, 2002 to delete D.A., but no decision was taken and the problem is forgotten. I have suggested to keep only 12% D.A.

Pension Bill :

The Pension Bill of the Central Government for about 36 lacs retired employees was about Rs. 3211 Crore in 1991-92 has increased to Rs. 24,000 crore in year 2004-2005. Pension is given only on contribution by employees in foreign countries (Refer Page 47). In India pension is given without contributing from employees. My one relative who retired with pension of R. 800/- per month in 1978 is getting 8,000/- per month .

The High court Judge who retired with pay of Rs. 3500/- per month is getting Rs. 17,000/- per month as pension.

Remedies on Pension, Page 48, Para-II

I have suggested that power to increase includes power to decrease and pension should be given 30% of pay due to revised pay and merge of D.A.

If Suggestions are carried out Pay and Pension Bill which is Rs. 57,000 crore can be reduced Rs. 35,000 crore.

Mr. Justice Shetty's Report [page 52, last two paras]

I have made commets on the Report, which has not been considered by author and the state Government and the Central Government have accepted the Report without any resistance in the supreme Court of India.

Subsidies :

The subsidies which were about Rs. 18,000 Crore in year 1998 has increased to Rs. 49000 crore.

Remedies page-54:

1. To give food instead of Mid-Day Meals, so that Daily unemployed person can be provided.
2. To revise minimum wages of unorganized labour so that subsidies can be curtailed or deleted.

Part-IV

Income Tax :

I have cited example of U.S.A. and pointed out that people will pay taxes only if they are assured to get pension on completion of 65 years. I have suggested pension scheme with contribution from the assessee and suggested minimum limit of exemption & tax rate at 10%, 20% and 30%.

I have commented on Shri Kelkar's Report and has pointed out number of assessee will be only One Crore Fifty lacs from 2 Crore Seventy Lacs, if exemption limit is kept at Rs. One Lac and continuing exemptions of sections 88B and 88C of L.T. Act (Senior Citizen and woman below 65 years) are suicidal.

Remedies [ Page 66 to 68 & 70 to 73]:

At present Tax G.D.P. ratio is only 9% to 10% only which is lowest in comparison to other countries (Refer Page 29) On my Suggestions 6 crore people can be brought in Tax net.

Part V :-

Bureaucracy :

About 12 crores were found from Excise Officer but the Central Government can not dismiss without inquiry.

Remedies:

To amend Article 311 of Constitution of India and implement Income Tax Rules. 1976 Part-IV and V where every assessee has give his major expenses list of assets.

Corruption:

Corruption can be controlled or removed only through provision of Income tax.

Remedies : [ page 84-85]

DEBT TRAP IN 2007?

Refer pages : pages 86-87 Reasons given.

Part-V :

Letters:

Page 100-105

Please refer my letter regarding Gujarat Riots and letter to the President of Pakistan, shri Pervez Mushrraf.. , Dr. Ambedkar's Speech when the Constitution was adopted in 25/12/1945.

Conclusion:

The Fiscal Responsibility and budget Management Act, 2003 has laid down that revenue deficit should be zero in year 31/03/2008. At Present The Central Government had borrowed Rs. 95,000/- Crore per year since last two years. We should create income and reduce the expenditure to the extent of Rs. 1 lac crore. I am confident that additional Rs. 1 lac crore can be created if the suggestions in the book are implemented. Only our leaders require political will to achieve the goal.

Clarification :

I do not belong to any political party. I love my country is the only qualification to write this book. I am 77 years old. I was arrested in 1942's Movement and kept for 10 days in jail for giving a lecture and hoisting the Flag on my school, at ankleshvar Gujarat. I was a child (14 years) so was released on bond of my father but I have not claimed any pension under Freedom Fighters Scheme, as I personally believe that love for the country can not be encashed in terms of moneys.

The Hon'ble President has written a book : - "INDIA 2020"

The goals mentioned in the book for year 2020 can not achieved unless our economy is on sound basis with regard to Fiscal and Revenue Deficit.

Citizen's Duty [Page-92]:

The targets mentioned in India 2020 can also be achieved if Indian Citizens perform their duties mentioned in Chapter " What We can Do?" A copy is enclosed for ready reference.

I request you to put your letter and my letter before the hon'ble president to appreciate my views on national economy.

Wishing you in the best of health and divine spirit.

                                                                                                            Yours,
                                                                                                           (Vasant J. Desai)