Everyone might have heard the hype regarding not accepting food coupons in many popular retail stores.
Why food coupons are widely used?
There is a tax exemption on the food coupons the employees opts for in an organization. But the amount of coupons for which tax is empted is limited (3000 / month mostly).
Now let us try to answer a question. Are food coupons really helpful?
The cycle of food coupons
The organization which issues coupons (sodexo or any other Edenred ) gets a compensation or more food coupons for lesser monetary value. Say for example 1010 worth coupons for 1000/- . The employee will be given 1000 worth coupons instead of 1000 INR. The tax exemption is 100 (10%). The employee pays in a retail store for his groceries. The grocery store claims 1000 INR, but will be paid 980 INR (it is just an example). In this cycle, who is losing? The upper layer shows everything is transparent and consumer is not affected. But let us flip the coin and look the other side.
We used to shop at the nearest grocery stores and the markets where the ambience and presentation might not be taken care of. But the cost of items is reasonable and quality is good. These are the places where the rural of India strives for their livelihood. Now as we opt for food coupons for tax exemptions, we shop at retail stores which will mark the goods at a higher price (keeping in mind the return for coupons). I don’t deny the fact that the retail stores provide employment, but coupons ensure that consumers throng retail stores even for small things leaving behind the traditional stores.
The retail stores can survive without coupons and at the same time small businesses can survive.
Can’t the government give a tax exemption for 36000/ year? Doesn’t a common household expenditure on food be 3000/month?
What help does parallel money do for our country?
Does government make bills for common man?
The above questions are left unanswered..
superb sahitya...i appreciate ur thoughts
ReplyDeleteThis comment has been removed by the author.
ReplyDeletegood topic to talk about..i tried to answer some of the unanswered questions u posted...
ReplyDeletethe goods(food items and beverages) we buy with these coupons are highly perishable and needs to be consumed quickly as many things come up with expiry dates after which they are not all useful
do we really require our actual currency to be in part of such short lived transactions??? as all the balance of payments are settled in very small intervals like weekly,monthly or quarterly
this type of vouchers would definitely save the cost of printing,circulating and security of the
actual currency for the govt.i dont think we need a persistent currency for this simple end to end supply chain
if normal currency is provided as part of daily meal allowance to the employees what if the employ doesn't use it for the designated purpose and accumulates it as a wealth or uses it as a means to generate an extra income in later stages then the contribution from him to the economy is unchanged but the contribution done by the manufactureres to the economy by their production of goods and services is wasted
will this does not impact our gdp and in turn on common man life?these vouchers will assure the positive thought of the govt to exempt the tax for the money you spend for your survival and well being existence
And the well known fact the food items and beverages industries need to clear off the sales of the existing stocks to start the next set of production that is the reason they even opted to exchage their goods with the coupons other than currency.we know that a coupon of 10 rs doesn't bear equal value of INR 10 note
why any business man will sell his products for a coupon of lower monetary value
than the actual MRP currency value?
i think we need to appreciate the service of the retail stores as they dont really have any MOUs with the farmers of rural india regarding the coupons and currency convertible ratios.they buy goods on cash from them and supply the same groceries to customers on coupons
the just one year validity restriction on the coupons also convey some significance to this process of food services and facility management
in answer to the above comment:
ReplyDeleteThanks for your info.
But, i don't think printing of currency will save a lot of money. vouchers may takes lesser money when compared to currency(for printing). But once currency is printed, it need not be replaced until it cant be used. But vouchers are valid for a year and once used cannot be reused. On an average our currency circulates for more than 6 years.
And security:- The rural deal in cash and many other transactions follow the same.so may be few more million transactions do not burden security.
In a common man's household which is eligible for foodcoupons the basic expenditure(food & bevarages) will definitely be 3000/month
My views may differ from urs.But, once again thanks for ur info
the world is shifting towards plastic and digital currency its time for us to have thought process on bringing the common man also under this umbrella...for an inevitable and unavoidable expenditure its not required to involve the monetary currency ...why we need a 6 year valid currency for just a monthly transaction of DEFINITE 3000rs per month
ReplyDelete