Charity vs Spending; where Government get bigger tax

Sheila donated Rs.5,000 to PM/CM Relief Fund.

On the other hand, Paandu bought two bottles whisky bottle worth Rs 5,000/-

The #Question is who contributed more to the #growth of our country ?

01. On the Rs 5000 Sheila donated, she got a 30% #tax_rebate. Therefore, she actually landed up earning back Rs 1,500/-, In other words, by donating Rs 5,000 she made a #net contribution of just Rs 3,500/- to the country. 

02. On Alcohol, the total taxes (excise and GST) added up to approximately 72% of the MRP. So when Paandu paid Rs 5000,/-, Rs 3600/- went to the state exchequer... Against 3500 rs from Sheila

...and 48 pegs from two 750 ml whisky bottle 🍷🍷. And the chakna , peanuts, soda and other bites he consumed worth Rs 5000 along with whisky contributed about 1000 Rs more to government. That makes it 4600 vs 3500.

Therefore, not only did Paandu contribute more, he created jobs at the Distillery, their suppliers of labels, bottles, caps, machinery , farms , Snack companies, jobs at the Marketing Company, jobs at the Wine Shop , Retail shops selling chakna, snacks and moreover he was in high spirits doing so, 

.... while Sheila doesn't even know where her money went !!

Think of it... 

Next time, think before ‘you’ serve your Nation !!!

Be a responsible citizen!!  

In #economic_terms this is called #Velocity of Money. The faster you consume 🍸🍹🥂 the more is produced. 

#Labour get employment. #Manufacturer produces products. Consumer enjoys 🍺🍻🥂🥃🍸🍹🍾. 

#Economy grows and Markets rockets. And it is Happy New Year every day. Cheers!! 

The next time you keep the ₹ 50/- back in your pocket, you are a liability to the economy. Tip the waiter, your hairdresser or your petrol pump attendant and keep rotating Economy 😂😂😂📈📈

Disclaimer : This is purely a knowledge sharing article, not offering or influencing any deal or transaction or investments.

CA Yogesh Birla

Director
Birla WP Management Co.
read my blogs : www.YogeshBirlaCA.Blogspot.com

Getting Wealthy vs Staying Wealthy

This weekend brings a valued book reading and sharing learning from The Psychology of Money, few bullet points:

#Good investing is not necessarily about making good decisions, It’s about consistently not screwing up.

#There are a million ways to get wealthy, and plenty of books on how to do so…..But there’s only one way to stay wealthy: some combination of frugality and paranoia.

Even if “wealthy” is not a word you’d apply to yourself, the lessons from that observation apply to everyone, at all income levels.

#Getting money is one thing………#Keeping it is another.

#If I had to summarize money success in a single word it would be #Survival

#Capitalism is hard. But part of the reason this happens is because getting money and keeping money are two different skills.

#Getting money requires taking risks, being optimistic, and putting yourself out there.

But #Keeping money requires the opposite of taking risk. It requires #humility, and fear that what you’ve made can be taken away from you just as fast. It requires frugality and an acceptance that at least some of what you’ve made is #attributable to #luck, so past success can’t be relied upon to repeat indefinitely.

#Michael Moritz, the billionaire head of Sequoia Capital, was asked by Charlie Rose why Sequoia was so successful. Moritz mentioned, We assume that tomorrow won’t be like yesterday. We can’t afford to rest on our laurels. We can’t be complacent. We can’t assume that yesterday’s success translates into #tomorrow’s good fortune.

Not “growth” or “brains” or “insight.” The ability to stick around for a long time, without wiping out or being forced to give up, is what makes the biggest difference. This should be the cornerstone of your strategy, whether it’s in investing or your #career or a #business you own.

#Compounding only works if you can give an asset years and years to grow. It’s like planting oak trees: A year of growth will never show much progress, 10 years can make a meaningful difference, and 50 years can create something absolutely #extraordinary.

#But getting and keeping that #extraordinary growth requires surviving all the unpredictable ups and downs that everyone inevitably experiences over time.

Disclaimer : This is purely a knowledge sharing article, not offering or influencing any deal or transaction or investments.

CA Yogesh Birla

Director
Birla WP Management Co.
read my blogs : www.YogeshBirlaCA.Blogspot.com

Why Willful Defaulters are laughing away from Banks ??

New RBI data shows wilful defaulters are laughing all the way away from banks

The saying goes if you owe the bank $100 that is your problem; if you owe the bank $100 million, that's the bank's problem.

Banks put all their might to get the money back from retail borrowers if they default on a car or an auto loan. Delay one instalment and banks come knocking on the door. They even resort to naming and shaming tactics, using third parties. The tactics seem to work in most cases and the borrower pays back.

But it is an entirely different game when it comes to corporate loan default, which is at a much bigger scale. Banks seem to forget their drill when faced with powerful defaulters, who have a battery of lawyers which drag the lenders from court to court for years on end. And in the end, banks have little to show by way of recovery.

The numbers game...Ugly numbers are already popping up. The Reserve Bank of India data, shared with Parliament, on December 19 shows that the country’s top 50 "wilful defaulters" owed Rs 92,570 crore to Indian banks as of March 31, 2022.

Wilful defaulters are those borrowers who have the means to pay back the banks but wouldn't do so. Banks ostracise such defaulters from the financial system. Gitanjali Gems, promoted by fugitive economic offender Mehul Choksi, tops the list with Rs 7,848 crore, followed by Era Infra, an exposure of Rs 5,879 crore and Rei Agro which has defaulted on loans worth Rs 4,803 crore.

Choksi, said to be an Antiguan citizen now, is beyond the reach of Indian law. The government and its several law enforcement agencies have, so far, failed to lay hands on any of the high-profile bank defaulters, which include former liquor baron Vijay Mallya, Winsome Diamonds & Jewellery promoter Jatin Mehta and Choksi’s nephew Nirav Modi, who is fighting his extradition from the UK.

But it’s not just about wilful defaults. Much of the Rs 10 lakh crore loan that banks wrote off in the last five financial years belongs to corporates.

Of the total loan write-off, banks could recover only a fraction—around Rs one lakh crore. The remaining Rs 9 lakh crore is as good as gone, though technically the process of recovery is always on.

It’s our money

Every rupee that a bank writes off has to be provided for—called provisioning in the bankspeak.

Banks' profitability thus takes a hit. Who are the real losers? Common shareholders and depositors. Banks are supposed to be the guardians of public money. They raise deposits from small and big depositors and use these to lend to businesses.

So whenever a loan is not repaid, it’s the shareholder of the banks (value erosion) and the depositors (as the bank turns weaker in terms of capital and profitability) who suffer.

The government has, time and again, reiterated its intent to clamp down on wilful defaulters.

Coordinated action by the government, RBI and other sector regulators is critical to tackling wilful defaulters as seen in the Kingfisher case.

Banks are sitting ducks for cronies and crooks. In most cases, banks haven’t made meaningful progress in the recovery from deep-pocketed and well-connected promoters. At the end of a long legal process, the value of underlying assets deteriorates and banks are left empty-handed.

The government’s intervention to speed up the recovery process is equally critical since each penny it feeds to state-run banks from the exchequer is public money.

A lot of ground needs to be covered and quickly, as the loan write-off and wilful defaulter numbers show. Do the government and the RBI have the will to clamp down on wilful defaulters?

(extracts of newspapers)

CA Yogesh Birla

Director
Birla WP Management Co.
read my blogs : www.YogeshBirlaCA.Blogspot.com