New Issue Investment Rating: Standard &Amp: Fill & Download for Free

Nope.The new tax regime is absolutely stupid.India, at the current juncture, requires that processes be simplified and that includes income tax.As a taxpayer, I was honestly expecting some drastic changes this time around. The current structure has largely remained unchanged for a long time now. It doesn’t make sense to tax income from Rs 5–10 L at 20%. The 2.5L ceiling for zero tax also needed to be revised.But alas, we got something way worse.Instead of simplifying things, FM Nirmala Sitharaman has complicated it even more by coming up with a dual tax regime.If the new regime was offered without the “no deductions” clause, it would have alleviated all issues being faced by the Indian middle class. But opting for that with the condition is just simply illogical.Exemptions are provided to incentivize people to save for their future. That is why you have investments in PF/EPF/VPF, Insurance premiums, ULIPs, Post office schemes etc. falling under the ambit of various tax deductions. At the same time, they can be used to incentivize people to spend, and consequently there are tax deductions available for interest servicing for home and education loans.Consider an individual who is earning 15L and is diligently saving and managing their tax liability. If they are decently smart with their investments, they can claim:50,000 standard deduction20,000 for mediclaim premium200,000 (150,000 + 50,000) under 80C including NPS150,000 as qualified HRA exemptionAs such, under the old regime, they’d end up paying about 100–110,000 in annual taxes. Under the new one, they’d be paying 80% more.To reiterate, NO.The Budget 2020, from an income tax perspective, was a disastrous disappointment.

There is no going back in progress. We are all going forward at a different pace.What are the ways to fight globalization other than controlling the media and restricting the movement of people and goods? How do these methods work in practice?There’s cultural globalization and then there’s global finance. The latter is what affects labor markets the most. The only bodies who have the ability to regulate financial markets are the governments but they have done very little in that regard over past decades. Every time there’s a tax hike or an attempt to control industries for social reasons, governments fear that businesses and big money go somewhere with less regulations.The last ones to leave are the ordinary citizens. They seem to tolerate being disciplined better which is why they tend to pick up the tab. Like they did in the aftermath of the latest financial crisis which, by the way, started from USA and went global.Developed countries make fortunes getting involved in developing countries’ markets. They issue sizeable loans, they invest in stocks and infrastructures. International contractors come in attracted by major deals being made, freshly issued investment money and cheap labor. Once the subject nation is ‘developed’ there’s no money to be made in this way anymore.Outsourcing is also profitable for companies in rich countries. Once the working population of a developing country has reached a certain level of pay rate and thereby living standards, jobs get outsourced somewhere else. If a state can’t or won’t compete with low pay rates anymore it has to reinvent it’s job markets to keep competitive globally. This is where many nations struggle.Options to automation may work on a micro-level if people continue to see value in artisan work and are willing and able to pay for it. This is effectively what hipsters do! There’s no room for this kind of thinking in heavy industry. Products and services created with little or no human involvement will continue to get cheaper in comparison.We don’t worry enough about the purchasing power of the middle classes. The masses. That’s what’s destroying jobs in the U.S. in particular.There’s no doubt in my mind that new technologies catalyze a change just as significant as the industrial revolution was. I worry for those unable to adapt. Not for the loss of obsolete tasks per se.

Musings on difference between Austrian and Keynesian schools of thought.Simply put, economics is the study of how we use resources & respond to incentives.Humans (and thus, economic phenomena) are inherently complex, which makes it challenging to test ideas by performing controlled experiments.In hard sciences like physics or chemistry, you’re evaluating things that don’t have motivation of their own. However, humans have complex motivations stemming from psychological phenomena that we can’t fully observe.Unlike other disciplines, economics has splintered into incompatible schools of thought (i.e., Marxist, Chicago, Keynesian, Austrian).This didn’t used to be the case. Austrian econ *was* mainstream econ in 1800s/1900s, as popularized by Hayek, Mises, & Rothbard. That was it.Austrian school focuses on first principles (e.g deductive reasoning) + derives implications from there.Keynesian economists, OTOH, use data + empirical evidence (inductive reasoning) to make decisions.As scientific method took off, Keynesian approach gained in popularity.To reiterate the differences in approach:Keynesians rely on the validity and applicability of empirical evidence. Austrians rely on their ability to make the right assumptions about human nature.This explains much of the differences between the camps’ proposed policies.Keynesians believe in spending to stimulate the economy in response to economic cycles. This leads to more consumption, which leads producers to invest more to make more widgets, thus employing more workers.In other words, Keynesians believe gov’t intervention is necessary.Austrians claim that gov't intervention is the cause of market distortions & misallocation of capital.It distorts the natural rate of interest, leading to distorted spending & investment rates, which leads to the booms & busts of biz cycles.Believe gov’t is the problem.Keynesians would argue that government-issued money is necessary for a functioning economy. They would argue that the Austrian sound-money ideal doesn't make sense in today's globalized world, and would lead to volatile currency fluctuations.Austrians would argue that we would all be better off with hard money, outsourcing monetary policy to whatever backs the currency (e.g., not tied to policy objectives of state).Austrians argue that if a money supply is fixed, then economic growth will cause prices of real goods and services to drop. This would discourage present-day consumption, but encourage saving and investment (for future consumption).The theory goes that such a 'low-time-preference' society would be better off in the long-run (more investment + less consumption today —& more income + more consumption in the future).Most nation-states today employ Keynesian economics. When growth slows, central banks print money, pushing interest rates down. And when that loses its effectiveness, we rely on deficit spending to jumpstart the economy.But cryptoeconomies are different than nation-states. Bitcoin doesn’t have to consider maximizing employment or even maintain stable prices (like the Fed). This, among other reasons, is reinvigorating the Austrian vs Keynesian debate.In closing:Austrian economics was mainstream in a different time (i.e., 19th century, gold standard, limited globalization) vs. Keynesian economics (20th century, post-Bretton Woods, globalization).Austrians would argue that we need an entirely new system (human nature hasn’t changed, system is broken), while Keynesians would argue that the world has changed and economic theory needed to adapt in response.