INDIA'S SMART FLAG:

The evils of Unionism and thoughtless tax regimes of the West was the harbinger of 'Flags Of Convenience'.  If Panama & Liberia were strategically right for US, the governments in Europe opted for off shoring. We need to appreciate the fact of military implication, considering how the German U-Boats had targeted the merchant fleet so successfully and almost brought the Allies to their knees in the first World War, and how in the second World War, the merchant fleet of the Allies, specially American and British,  was engaged in carrying vital & strategic supplies. As far as India goes, we have imported the worst forms of the evils of the west, be its tax regime or the freehand to the Unions by Nehru's Fabian Socialism that he learnt in England. I also agree that we cannot shrug off this evil baggage so easily, by bringing in revolutionary tax reforms in shipping or better Labour Laws, in our current political climate. 

 

India's national tonnage shall continue to decline, despite the Tonnage Tax, because the scourge of the Trade Unions and a plethora of indirect taxes like service taxes, Fringe benefit tax, personal taxes on the seafarers, the Octroi, and so on. The government of India will not be interested to offshore considering no tax or apparent strategic benefit. However, if something similar to Laloo's railway magic could be played on Indian Shipping, the Government will not only sit on cash-mountain, much bigger than that created by the Railways, but also be a strong maritime player internationally, in addition to the strategic military strength in times of conflict or war.

 

Our Ministry of Shipping needs to create a SEZ for shipping in a place like the Andaman. Make it a zero tax heaven for ship owning & follow the footsteps of Panama. Make IRS a convenient tool to assist in the strategy. Opening of a shipping company & opening a multi-currency Bank account should be done in six hours. There should be no auditory or RBI supervision on ship owning activities, like Dubai. Create a one-window facility, consisting of Flag Office, Registration, and other mandatory certifications in this SEZ in the matter of one day. Increase representation of the Flag office all over the world through the Indian Embassies and franchising IRS through the same desk in the Embassies. Dilute the government stakes in the IRS & use it as a magic tool. Consolidate & sharpen the Cabotage laws and offer incentives for Indian flags carrying Indian goods. Make bunkers supplied to such ships, tax free irrespective of home or foreign run. Disband Union agendas in this SEZ and make it easier for Graduates from any faculty or Engineers to join as officers or Engineers with minimal training & stringency, in line with IMO's stipulations. Make it open for all Under Graduates to get a CDC with bare minimum training to work as crew on board. There will be a beeline of funds and expertise to India. The country's poor maritime skeleton will metamorphose into a World Giant and far surprise others, giving them no time to mime or resist. This could lead to inflow of funds into the sector beyond the Ministry's imagination or guess. The criticism of attracting old tonnages and an emergence of an inferior maritime work-force, does not hold much water, considering the current poor records of Indian ships in foreign shores and the dependability & strength of the Phillipines Officers and crew, who receive much less training and go through much less a stringent system like ours. We could call the 'Smart Flag' in stead of 'Flag of Convenience'.

 

Reported by
Capt Rath, CEO, Maxicon Container Line
================================