In 1994 I was struck by certain statistical data (Annexure A) which showed that all over the world in development countries, the main source of revenue of the state ( more than 90 per cent) came from direct taxes and in most cases more than 50 per cent population contributed their personal income tax.

As against this is India of revenue 75 per cent came from indirect taxes. Direct taxes revenue was less than 25 per cent and in that the revenue from personal was less than 10 per cent. In India, although we claimed that more than 30 per cent of our population constituted the market with well-to-do income earners, just about one per cent of our population contributed to personal income tax. This appeared scandalously low!

I saw that at the political level we had developed and encouraged a mentality against payment of tax. Only the government and semi government sectors paid personal income tax, which was deducted at the source from their salaries. From personal income tax the government got, at maximum rate of 30 per cent, about Rs 23,000 crore by way of tax. This meant that about one lakh crore rupees worth income got accounted for in the budget. This also proves that even if only 10 per cent of the upper strata of the 30 per cent well-to do  income earners were to be brought in the tax net and had their annual income accounted for, it would mean another Rs 10 lakh crores getting accounted for and come in the open market as 'white money'. This huge amount then could be legitimately invested and would be available in the banking sector to be lent at lower interest rates. The rate of investment will grow with these large funds coming into the open, giving a boost to national growth in all fields. With large part of 'black money' becoming 'white', much of the source of corruption will get reduced. It is well known that the existence of the 'Parallel Economy' is the main cause of corruption all around.

These Rs 10 lakh crores of income getting accounted for every year will also provide a personal income tax revenue of about Rs 2.5 lakh crores per annum. With this huge additional direct tax revenue, the burden of indirect  taxes like excise, customs and sales tax can be drastically reduced or even removed. It is common knowledge that all indirect taxes are inflationary and get passed on to the consumers in the from of increased prices, hurting the poor and the fixed income people most. With this large revenue the government can concentrate on infrastructure, education, health and defense and leave other sectors free for private enterprise. With growth of basic inputs like irrigation and power, the national growth rate will increase even to 10 per cent per year. Above all, the entire deficit in the national budget will be wiped out.

It is unintelligible that a nationalist government is selling Bharat Mata's economy down the Ganga and the opposition parties, including the Communists, are pre-occupied with the job prospects of lethargic insurance clerks and corrupt employees of state electricity boards rather than with the impending threat to the sustenance of the lives of a majority of our populace. The BJP, whose agenda is being increasingly set by its partners in the Vishwa Hindu Parishad and the Bajrang Dal, is dazzled by the spectacle of purifying the country's culture and mesmerised by terrorist threats to internal security. The sangh parivar's purification rites at the ghats of Kashi, the Valentine gift shops of Kanpur and Valentine gift shops of Kanpur and the corridors of the Indian Council of Historical Research enthrall and BJP led government. Kashmir, terrorism and the ISI agitate the government. Yet, these are bit sufficient reasons for the government of India to surrender national economic sovereignty.

With large resources coming put in the open and becoming available with the state, as 80 per cent of personal income tax revenue goes to the state governments, funds will become available to the Panchayats and rural banks for growth of agro-industries and rural economy making the village Panchayats economically self-reliant, guaranteeing at least one remunerative occupation per family. This will pave the path for 'Gram Swaraj' of Gandhi-Vinoba dream.

Considering the Administrative difficulty in broadening the base of personal income tax from the present one per cent to about 10 per cent with the existing staff, Shri Homi Ranina and I worked out a scheme of assessing presumptive or estimated income, based on standard items of ascertainable expenditure and applying a common multiplier as per the commercial norms, arrive at an estimated income of the individual citizen. These standard items are house rent or house tax, electricity bills, telephone bills, ownership of TV, cars, two-wheelers etc. On this estimated income we applied a reduced tax rate between 10 per cent to 20 per cent according to slabs of estimated income.

We also made a provision of a Peoples Tax Tribunal of peers at district level, providing redressal to the aggrieved party and making the decision of the tribunal binding on the government. We have proposed that this scheme should be applied to income up to Rs 5 lakh. Income above this should be covered by the existing tax law.

We thus took care to provide a scheme that would make a well-to-do income earner, an honest and honorable tax-payer with a Permanent Account Number, relieving him from all tax hassles and harassment. We thus intend to bring about a revolutionary change in the mindset of our elite, well-to-do citizens in their attitude to tax contribution so as to make our nation economically self-reliant and strong. This would help the nation in raising enough resources to help the 30 per cent population living below poverty line.

I first made this proposal in the form of a small book called 'Tax Without Tears' published in 1994 and presented it to the then Prime Minister, Shri P.V.Narasimha Rao, at the hands of Dr Manmohan Singh, the then Finance Minister. Prominent economists and economic editors attended the function. Shri Narasimha Rao expressed his desire for a discussion on this proposal with experts. This, however, did not take place either in the Congress party or in the government.

Shri Nani Palkhiwala, the famous tax lawyer, was the first person to support the idea. He was kind enough to write the foreword to my book. I have been approaching leaders of all political parties with this scheme of massive internal resource mobilization, as I believe that this proposal cuts across party lines and is entirely in the national interests. I have approached al Prime Ministers, Finance Ministers, Speakers and the leaders of the various political parties during the last five years with a request to get the proposal examined and discussed. I have also been pleading with the leadership of the Congress party to get the scheme seriously considered and examined so that faults, if any, could be corrected and improved upon..

I have personally approached well-known jurists and economists to have their advice and opinion on this proposal. No one uptil now has questioned the basic concept for mobilizing resources from the economically well-to-do section of the country, nor have they found any flaw in the Estimate-Based Income Tax proposal to achieve the objective of self-reliance. I have met representatives of CII, FICCI and ASSOCHEM with this proposal.

No one in the government or even at party level, including my party, the Congress, has told me that the concept of the proposal is not feasible or desirable for any valid reasons. From Prime Ministers down to the party level, authorities seem just to evade the issue and the national need for resource mobilization though a large untapped capacity is readily available in the nation.

What is most painful is that rather than relying on our own resource and strength we are willing to succumb to the soft option of outside aid and indebtedness to financial institution. Today, nearly 40 per cent of our tax revenue is spent on debt servicing and interest payment. Our dependence on multinational companies, even for our infrastructure needs, is the surest sign of weakening of our economic independence. In consumer goods sector the multi-national beverages have already established their stranglehold. The same is true of automobile and communication sectors. All these are symptoms of economic slavery. After standing firmly on our own feet with our own resources we can provide a level playing field to our industry and commerce and allow free competition with outside world.

When I see a blind eye and deaf ear being turned to a rational proposal for achieving economic self-reliance through honorable means of resource mobilization which can, with least burden to the well-to-do income earners, give us enough funds to uplift the 30 per cent poor living below the poverty line, I feel not only sorry but also anguished at this apathy. I want well off income earners to become real 'Kar data' so that they extend a helping hand to their less fortunate brethren. In fact, we should start a national movement for self-reliance and 'Arthic Swaraj'. A movement for 'Swalamban, Swabhiman and Saamarthya' i.e. for self-reliance, self-respect and strength.

Having failed in a rational, persuasive method, I am left with no alternative but to resort to the last Gandhian method of non-violent 'Satyagraha' through self-sacrifice for this noble and just cause of economic independence. I am taking this step after long and deep deliberation and consideration. I am not acting in haste or on impulse as I have been trying intellectual, persuasive methods for the past more than five years. I am not taking this step against anyone either in government or at any political level. I am doing this purely for moral presuasive reasons and in the national interest, to arouse national conscience.

I am, therefore, through this public statement giving about three months intimation to the people in Government, to political leaders and to Members of Parliament, of my intention to undertake a fast unto death from 5th March, 2000 to persuade the leaders of the nation to accept the path of economic self-reliance by considering the proposal for mobilizing resources from at least 10 per cent of the upper layer of well-to-do income earners of our country. I am enclosing a monogram containing this proposal prepared by me and Shri Homi Ranina. Our thinking is positive and we are willing to prove that the scheme can be successfully implemented.

I am open to any correction in this scheme proposed by us or even to any alternative, provided the object is achieved. I welcome a discussion and dialogue in any forum. Hence this three months period. I would be happy if Parliament, political parties and the government of the day take this matter for consideration seriously. Media itself can play a major role.

I have had a full and successful life by all normal standards and I have earned goodwill from a large number of well-wishers and friends in different walks of life. I began my active public life with participation in the 1942 Quit India Movement for political independence, when I virtually staked my life facing a firing squad and walking into the police lathi-charge, getting injured and arrested. Most of my active life, both outside and inside the government, I have spent in the struggle for the downtrodden and to establish a democratic welfare society in India.

Now, if for achieving Arthic Swaraj or economic independence, without which as per Gandhiji, even political Swaraj will not be complete or secure, sacrificing my life for the great cause will only be a small offering or 'Ahuti' in this 'Arthic Swaraj Yogyna. I shall do this gladly and with perfect peace of mind and sense of fulfillment..

Vasant Sathe