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  Among the many lame arguments against selling Air India is the one that reminds us that it is the flag carrier. Well, many countries no longer have flag carriers (including America). In other cases, they don’t cost their governments so much. Flag carrier pride in a passenger airline is stupid. Air India is not the Indian Air Force.

  Air India’s role in rescue efforts is also tom-tommed by these naysayers. Well, it beats all logic to keep such an expensive operation on standby for occasional rescues. It is a better idea for the Centre to give money to private airlines in such emergencies. Do we really think that in the event of a rare, genuine calamity, if the government wants to pay to hire a plane for rescue operations, IndiGo and SpiceJet are going to refuse? And isn’t this far more efficient than burning ₹7,000 crore a year?

  These two noble arguments hide the real reason we’re keeping Air India alive. It is the netas’ and babus’ club in the sky. Politicians and bureaucrats, along with their families, friends and neighbours, abuse Air India to get free upgrades and slavish service from the staff. Taking Air India off the government’s hands will end these VVIP joys.

  Even if we want to pamper netas and babus, there are cheaper ways. Paying them money to fly business or even first class in private airlines will be less expensive than keeping the Air India monster alive. The government can buy upgrade vouchers for its senior functionaries.

  So how does one sell Air India? Its assets, office infrastructure, running operations and landing rights have some value, though well below its debt. The government should give it to the highest bidder among various private players. Of course, the bid is unlikely to pay off the entire debt, so the winning bidder will probably be someone who wants the least discount on the loan.

  Employees may be retained or retrenched; that is up to the buyer to decide. But a decent retrenchment package (say, three years’ salary) for the entire staff would cost around ₹9,000 crore (given a salary bill of ₹3,000 crore a year). The new buyers will take that into account in their bid.

  Even in an ideal scenario, the government will have to give a discount on the loan. It may even have to give the company to the new buyer for one rupee. The sale will not make the government any money. But it will get rid of a part of the loan and the whole cash-burning enterprise. To that extent, this exercise would be not so much a sale of Air India as good riddance. This is something we need to understand going into the transaction, so we don’t have unrealistic expectations from it.

  Beware opposing voices that will complain about the sale, ‘We sold Air India for nothing.’ Tell them: we didn’t sell it, we got rid of it, and that will save us a lot of money every year.

  Let’s all keep up the pressure to ensure that the Modi government sells Air India. We will be doing the country’s finances a big favour.

  @chetan_bhagat

  Am all for fiscal prudence but to overtax fuel and then spend thousands of crores paying for Air India’s losses and funding bank NPAs also doesn’t seem to be the best way to do things.

  94 replies/ 190 retweets/ 1,028 likes

  @chetan_bhagat

  A bit surprised that skill based certificate programs offered by educational institutions are subject to 18% GST. Most countries don’t have it. Govt should consider making education GST free.

  249 replies/ 1,060 retweets/ 4,716 likes

  How to Tax with Love

  These are ten ways the income tax department can reform itself to get taxpayer buy-in

  Startling income tax data was in the news in 2016: only 1.2 crore Indians (one per cent of the population) pay income taxes. Checks with the tax department revealed that the data was somewhat unrepresentative, as it only considered taxes on salaries. The number of individuals paying taxes is close to five crores or 4 per cent of the population.

  At the same time, the tax department did confirm that the number of individuals claiming to have an annual income greater than ₹50 lakh is only 150,000, in a country of 120 crore people. Note that modest two-bedroom apartments in Mumbai suburbs alone cost ₹3 crore. One wonders who is buying them, isn’t it?

  Hence, the tax department’s assertion that there is a significant amount of tax evasion in the country may not be incorrect. And the so-called hostility with which our tax officials approach taxpayers is somewhat justified. They could argue that they would not have to be so rough if people only behaved.

  At the same time, there are constant reports of genuine taxpayers claiming harassment and persecution by tax officials. The tax department, many income earners say, starts with the assumption that the taxpayer is in the wrong, deliberately complicates rules, and comes after you only because you decided to pay your taxes (while ignoring or remaining blissfully unaware of the real tax evaders).

  As the Indian economy gets bigger, invites more foreign investment, and tries to expand its tax base, some things need to change about the way the tax department does its job. It is one of the few government departments that is in constant touch with citizens. If it continues to operate in an archaic and hostile manner, the benefits of policy reforms will never accrue to the economy. Here are ten concrete, doable ways the income tax department can tax, but with love.

  First, treat the taxpayer as a customer. The current tax department mentality is to act like the police and approach the taxpayer as a criminal, guilty unless proven otherwise. It is tough for people to part with their money. The last thing you should do while taking it from them is to be ungracious about it. Without the taxpayer, the government can’t function. Seeing the taxpayer as a customer means taking constant feedback, having service benchmarks (turnaround times, for example), and not presuming guilt.

  Second, simplify forms. The government has tried but sadly failed to do this. The Indian tax department should download some forms from the Hong Kong or Singapore tax department websites. These are some of the simplest and most effective tax forms in the world. Please emulate them.

  Third, design a good, robust and modern website. India is the land of IT companies. Hire a good company to revamp your customer interface. Again, if you see the taxpayer as a customer, you will approach the website differently. The layout, the downloads, and the language used, should all change. Yes, get an app too.

  Fourth, good quality paper. Current tax department communication seems stuck in the 1980s, with cheap super-thin sheets and envelopes, and poor-quality black and white printing. Come on. We are one of the world’s top economies.

  Fifth, simpler nomenclature. Terms like ITR4 and 26AS intimidate people. Sit down one day, and rename and reorganise all the forms that have been amended and cluttered with complex nomenclature over the years. It’s scary enough to pay taxes. Don’t make it scarier.

  Sixth, say thanks and mean it. People who pay taxes are nation-builders. Seeing all rich people as thieves is a throwback to the evil-landlord-and-poor-peasant movies of the 1970s. You don’t only become rich by stealing from the poor. You could also generate wealth from creativity, innovation, hard work and enterprise. How can you punish people for that? The top 10 per cent of the country’s taxpayers should actually get a nice letter and memento (not cheap quality, please!) from the IT department.

  Seventh, don’t send scary letters. Yes, the department officials are under pressure to increase revenue. However, you cannot scare taxpayers. For instance, the kind of letters that say, ‘We believe that, the way things are going, you should make 20 per cent more money this year, so we hope you will (and you’d better) pay that much more tax.’ Really? Do we need to be so intimidating?

  Eighth, set up tax guidance centres. People should have a place to go to figure out how to do their taxes, where they don’t need to hire a private advisor. Organise taxpayer training at enquiry and guidance centres that run well. Again, make sure they’re nice. They should not be like sarkari torture chambers with endless waits and creaky fans. This is the last government department that can claim it doesn’t have money.

  Ninth, share macro data. Without revealing in