Economics of India is broken
A Fortuner car from Toyota costs a consumer 48 Lakhs on road. Out of this toyota company makes 40 thousand, dealer makes 1 lakh, Govt makes 18 lakhs. Rest is the cost of vehicle.
Essentially the consumer pays 48 lakhs but gets product worth 28 lakhs.
This is why most foreign companies come to India sell products for a while and check out. 5% stay and make here.
Somehow this 5% must increase to 25% for us to have more employment and keep wheels of economy running.
What can be done to lower taxes on such products?
Essentially the consumer pays 48 lakhs but gets product worth 28 lakhs.
This is why most foreign companies come to India sell products for a while and check out. 5% stay and make here.
Somehow this 5% must increase to 25% for us to have more employment and keep wheels of economy running.
What can be done to lower taxes on such products?
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Taxes are absurd in India and it is not a discovery. There must be a cap on all taxes. Any tax rate over 30% is questionable. If any product is considered harmful (Liquor/tobacco?), it should not be sold, rather than taxing it with obnoxious rates (Why should the government rake in blood money?). With high prices, the number of prospective buyers for Toyota Fortuner tends to be very low. The car manufactuer will not set up manuafacgturing facilities for small number of product sales, but prefer to import it as finished cars or in SKD (Semiknockdown)/CKD (complete knockdown) condition kits where the key components are never made in India. Do we all know that most of the steel used in motor vehicles is generally imported since most steel plants in india are not configured to make automobile grade steel? Before going attamanirbhar, reality has to dawn that econmonies of scale is a reality. Secondly, India has to increase competitiveness. We need a better supply chain in place and better ideas.
May 16
How does the government earn so heavily Rs.18 lacs on the sale of a single vehicle! Would the car manufacturers and consumers, allow this?Manufacturers, after all extracted lowering of duties, GST, on vehicle sales over 2 years back furthering their profits. In fact only aspect that is allowed by all is their products making it out with the environment. Government, to be fair has converted the entire mass transit system, i.e. bus fleet to CNG and metro train runs on electricity.
May 16
Its misrepresentation, Please explain how did you arrive at Rs.18Lakhs going to the Government.
May 16
