Forests are Renewable Assets, India can earn enormous revenue
‘AB KI BAAR TAX FREE SARKAR’
Open Letter to our legendary Prime
Minister of India –
Shriman Narendra Modi ji
Respected
Sir,
This
is my humble submission which is in sequel to my first letter dated 13th May
2019, to you, sir (Ref given at the end).
Sir,
my submission fits exactly in to your philosophy. In your first guidance to all
Secretaries yesterday you advised them that – ‘All Ministries must focus
on steps to improve ‘Ease of Living’. The greatest ease of living in everyone’s
life is surely relief from paying any kind of taxes. What I am aiming is making
India world’s 1st Tax free nation and working for that is my Mission
for remaining life.
My
theory is simple. Government takes taxes
from its people for meeting its operating cost. Government has some 57 Ministries on which the
collected tax is spent. All these Ministries have some valuable Goods, Services
and some Intangible Powers for benefit of people. Ministries should earn their
operating cost from these goods and services. Present earning of Government
from these assets is a meager Rs. 272647 crores. In budget this income
is called income from ‘Non-tax Revenue’ whereas logically it should be given
the right name – Income from National Assets. Full attention should be given to maximize
this income but sorry to say this important aspect never finds any mention in
the budget speeches.
|
|
2017-2018
Actuals
|
2018-2019
Budget Estimates |
2018-2019
Revised Estimates |
2019-2020
Budget Estimates |
|
1.
Revenue Receipts
|
1435233
|
1725738
|
1729682
|
1977693
|
|
2.
Tax Revenue (Net to Centre)
|
1242488
|
1480649
|
1484406
|
1705046
|
|
3. Non Tax Revenue
|
192745
|
245089
|
245276
|
272647
|
For
maximizing income from National Assets it would be necessary to know what
Assets a Ministry possesses, where all they are located and what is their
commercial value. Sir, from available
data I could not find any such detail. I
started working on it and I am glad to state that I have devised a methodology
for that. With this methodology monetary value of all kinds of assets existing
in every village, town, city and Metro shall be known on a particular day – the
year end.
Additionally, consolidation of value of these Geographical Entities
(6.58 lakh as per 2011 census) shall give monetary value of all Districts,
States, all Ministries and for the full country. To obtain this vital
information only one Chartered Accountant for every Ministry shall need to be
appointed headed by a Chief Chartered Accountant, both at the Center and in
every State. I can present this
methodology to Government whenever I am asked to present it.
Now, Sir, after knowing the monetary value of
all assets of a Ministry Government shall have to appoint one CEO expert in
that matter for each Ministry. The Secretaries and Ministers do not have that
expertise and hence appointment of a CEO shall be necessary. One burning desire in every CEO is and his
mind is always at work as to how to maximize income from the resources given to
him by the entrepreneur. The income can be increased both ways – by decreasing
cost and by increasing revenue through various means like improvement in
quality, more production, beating his competitor, more reach to his customers,
finding new markets, etc. etc.
The
CEO shall be tasked to provide goods and services of the Ministry concerned at
most competitive prices and in abundance to people while earning optimum
revenue for the nation. That revenue shall provide funds to run the Ministry
obviating the need to meet its operating cost from taxes.
Sir, I have
been a CEO in my life and I shall attempt to present before you earning
prospects of every Ministry. Today I begin with Ministry of Forest.
First of
all, the name of the Ministry ‘Environment, Forests and Climate Change’
itself dilutes the value of Forests. It
gives importance to Environment and Climate Change. These are actually ‘Prasad’
of forests. The focus should be on
Forests and the name of Ministry should be suitably revised. Forests are one of
the major National Renewable assets gifted by Mother Nature free of cost. In
our country forests are spread over 23.8% of area encompassing one fourth of
the whole country. So logically they should generate one fourth GDP for the
country. What they produce is a miniscule - one to two % of GDP. In fact the ‘Forest
Policy 1988’ itself says – and I quote “Forests should not be looked upon as a source of revenue” in its concluding
paragraph.
In contrast
to this approach of our Government World Bank in its report says –
Forests create Jobs and Revenue “The formal timber sector employs more than 13.2 million
people. It also produces more than 5,000 types of wood-based products, and
generates a gross value added of over $600 billion each year.”
As a CEO what I see
is as follows –
Budget of the MOEF
Ministry is as follows –
|
|
Revised 2018-2019
|
Budget 2019-2020
|
||||
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
|
Gross
|
2683.41
|
50.01
|
2733.42
|
3219.2
|
64.52
|
3283.72
|
|
Recoveries
|
-50
|
...
|
-50
|
-100
|
...
|
-100
|
|
Receipts
|
-8
|
...
|
-8
|
-8
|
...
|
-8
|
|
Net
|
2625.41
|
50.01
|
2675.42
|
3111.2
|
64.52
|
3175.72
|
My humble submission is that the Forests can
provide many times more revenue meeting the cost of the Ministry and providing
support to Budget for maintenance of other non-revenue generating Ministries. Let
us consider -
What
is a forest
The forest is a complex
ecosystem consisting mainly of trees that buffer the earth and support a myriad
of life forms. The trees help create a special environment which, in turn,
affects the kinds of animals and plants that can exist in the forest. Trees are
an important component of the environment. They clean the air, cool it on hot
days, conserve heat at night, and act as excellent sound absorbers.
The FAO (Food and
Agriculture Organization) has defined forest as land with tree crown cover (or
equivalent stocking level) of more than 10% and area of more than 0.5 hectare.
The trees should be able to reach a minimum height of 5 m at maturity in situ.
Forests are further subdivided into Plantations and Natural Forests. Natural
forests are forests composed mainly of indigenous trees not deliberately
planted. Plantations are forest stands established by planting or seeding, or
both, in the process of afforestation or reforestation.
Forests can develop
wherever the average temperature is greater than 10 °C in the warmest month and
rainfall exceeds 200 mm annually. In any area having conditions above this
range there exists a variety of tree species grouped into a number of forest
types that are determined by the specific conditions of the environment there,
including the climate, soil, geology, and biotic activity.
Forests can be broadly
classified into types such as the taiga (consisting of pines, spruce, etc.), the mixed temperate forests
(with both coniferous and deciduous trees), the temperate forests, the sub
tropical forests, the tropical forests, and the equatorial rainforests. The six
major groups of forest in India are –
1.
Moist tropical,
2.
Dry tropical,
3.
Montane sub tropical,
4.
Montane temperate,
5.
Sub alpine, and
6.
Alpine.
These are subdivided into
16 major types of forests. Forests are classified into four broad categories,
namely –
i)
Forests for preservation of
environmental stability,
ii)
Forests for providing timber
supplies,
iii)
Forests for minor forest produce,
and
iv)
Pasture lands.
While the first two
categories were declared as reserve forests, the rest two were designated as
protected forests and managed in the interests of the local communities.
As of 2010, the Food and
Agriculture Organization of the United Nations estimates India's forest cover
to be about 68 million hectares, or 22% of the country's area and by 2015 FAO
Global assessment observers the forest cover increasing to 70.68 million
hectares occupying 23.8% of the total land area of the country. The 2013 Forest
Survey of India states its forest cover increased to 69.8 million hectares by
2012, per satellite measurements;
this represents an increase of 5,871 square kilometers of forest cover in 2
years. However, the gains were primarily in northern, central and southern
Indian states, while northeastern states witnessed a net loss in forest cover
over 2010 to 2012.
In 2002, forestry industry
contributed 1.7% to India's GDP. In 2010, the contribution to GDP dropped to
0.9%, largely because of rapid growth of the economy in other sectors and the
government's decision to reform and reduce import tariffs to let imports
satisfy the growing Indian demand for wood products.
Goods
and Services produced from Forests
Services -
ü Plants
provide a protective canopy that lessens the impact of raindrops on the soil,
thereby reducing soil erosion. The layer of leaves that fall around the tree
prevents runoff and allows the water to percolate into the soil.
ü Roots
help to hold the soil in place.
ü Dead
plants decompose to form humus, organic matter that holds the water and
provides nutrients to the soil.
ü Plants
provide habitat to different types of organisms. Birds build their nests on the
branches of trees, animals and birds live in the hollows, insects and other
organisms live in various parts of the plant.
ü They
produce large quantities of oxygen and take in carbon dioxide.
ü Transpiration
from the forests affects the relative humidity and precipitation in a place.
ü Tourism
– a hugely revenue earning industry
Goods
provided by Forests –
India produces a range of
processed forest (wood and non-wood) products ranging from Wood panel products
-
ü Wood
pulp to make bronze,
ü Rattazikistan
ware and pern resin.
ü India's
paper industry produces over 3,000 metric tonnes annually from more than 400
mills.
ü The
furniture and craft industry is another consumer of wood.
ü India's
wood-based processing industries consumed about 30 million cubic metres of
industrial wood in 2002.
ü India
annually consumes an additional 270 million tonnes of fuelwood,
ü 2800
million tonnes of fodder, and
ü About
102 million cubic meter of forest products - valued at about ₹27,500
crore (US$4.0 billion) a year.
ü Bamboo
trees
ü All
season Guest Houses for tourists
ü Holiday
homes for summer vacations of Indians and for winter vacations of residents of
cold countries
ü Fruit
Trees
ü Sandalwood
Trees
ü Medicinal
Plants
ü Expensive
flowers
ü Residential
colony for staff and workers of the Project
Employment
Generation
These Projects generate gainful
employment for a large number of unskilled, semi-skilled, skilled, office
staff, Engineers, Managers and Consultants.
Revenue generation activity for Budget support
To generate additional
revenue from forests for giving support to budget one of the projects can be
that Forest Blocks of varying sizes are earmarked for leasing out to Private Operators, e.g.
- Cast 5000 Blocks of
forest area of a size of 500 Ha or thereabout depending upon the site
condition, each. That shall take only 2.5 Mln Ha out of total area of 69.8
Mln Ha or about 3.5%.
- Lease out each block
through transparent E-tendering process at a long lease of 30 years or
more at a Reserve yearly lease rent of say about Rs. Five Crores each with
provision of 10% increase in lease rental every 3 years. In view of market
position it can be safely assumed that the blocks shall fetch much more
lease rent.
- That shall generate an
income of some Rs. 30,000 Crore or many times more. Earmarking and
charting out 5000 blocks in every State having forests may take a few
years. This income can meet the revenue expenses of Forest Ministry and
surplus can meet expenses of such Ministries that cannot generate revenue
for themselves like Defense, Investigation Agencies, Internal Security,
etc.
4.
The Lease Holder can carry out
various kinds of commercial activities in the designated area maintaining
prescribed terms and conditions.
Terms and conditions of lease
ü The
area shall be maintained as Forest only and shall be handed back as such after
expiry of lease period. The lease can be renewed with revised terms, first
preference being given to the outgoing lease holder at the highest bid offer.
ü Number
of trees shall be increased every year by at least 1%.
ü Trees
can be cut at the rate of not more than 5% every year with the strict condition
that new trees shall be replanted either of the same genre or better ones as
suggested by experts within one year of cutting.
ü Fruit
trees can be planted in place of ordinary wood trees.
ü 2.5%
area of the block can be developed to provide Hospitality services like Guest
rooms, travel and tourism, Water parks, etc.
ü Milch
animals can be reared and milk and milk products sold
ü Honey
can be produced
ü Fisheries
can be developed and fishes sold
ü Poultry
farms can be developed and products sold
ü Herbs
can be produced and sold
ü High
value Flowers can be grown and sold
ü Villagers
living in the leased area shall be provided same living area and provided
employment at remunerative and better terms
A
project report says -
EUCALYPTUS
PLNTATION (Proposed for India)
sagwanfarming@gmail.com
www.sagwanfarming.com
“Eucalyptus are generally
moderately large trees and attain a height of 40-60 feet and diameter of 40-45
inch. The trunk of the tree is generally straight and constitute half of the
total height. Wood is buy back with rate of kg. 5 - 6 RS/kg 300-400 kg /tree in 4-5 yrs. One tree become of minimum 1800
-2000 RS after 5 yrs. do 1200 plant in
one acre at space of 1.5 X 1.5 metre and
earn RS 1800 from one tree x 1200 tree = 21,60,000/- in 5 years.
(Average Gross
Revenue Rs. 21.60 lakhs divided by 5 yrs = Rs. 4.32 lakhs per year per acre.
Deduct cost of development to arrive at Income per year)
For
500 Ha less 10% for other uses 400 Ha = 1000 Acres
Total gross recovery Rs.
43.20 crores per year
---
Above
project is just a crude thinking. A CEO expert in forestry shall be able to design
many revenue generating projects. Thus
Forest Ministry can be a huge Revenue Earner for government of India as well as
for the various States having forests.
I shall
endeavor to submit such revenue generating concept for all Ministries and then
for each State of India one after the other. That shall take a long time. The
Government
has a huge bank of experts at its disposal and they can be tasked to prepare
such Revenue generating proposals for all the Ministries. Backed with my 60
year long experience I have full conviction that once Government starts
thinking on these lines then revolutionary ideas shall start pouring in.
Government shall make best use of the huge stock of various kinds of assets at
its disposal and earn unimaginable revenue. Those revenues shall eliminate
poverty from the face of our country. Kindly give a serious thought.
With
respectful regards,
M.K.
Agarwal
Mumbai
Twitter
handle - @Ramsewak
Disclaimer:
The article has been compiled for the purpose of providing general knowledge
only. Viewers should make further
research on the subject for taking any decision which can have
consequences. This information has been
collected through secondary research and publisher is not responsible for any
errors in the same
Text is available under the
Creative Commons Attribution-ShareAlike License; additional terms may apply. By
using this site, you agree to the Terms of Use and Privacy Policy
Comments
Post a Comment