How Indian businessmen think about income tax

Had a very interesting conversation with an extremely succesful business man from Bangalore yesterday. He’s probably worth 100 crs (USD 20M) and files an annual return of only 1.5crs or USD 250,000 a year.

He has a very interesting perspective on income tax. He said that the income tax in India is close to 55% if not more. When asked why he described it this way:

Income: 100 rupees

Tax (33%) = 33 rupees

Your net after tax= 67 rupees

This means that when you make 67 rupees. The government makes 33. This is 49%. Now add to this VAT, Service tax etc that you pay on every purchase you make from your 67 rupees and soon you realise that the net value you get from your 67 is less than 67 rupees. Increasing your tax burden even further.

His takeaway was that there is no way to be rich in India unless you steal on the your taxes. This is why almost 90% of his business income remains undeclared. And, he prefers paying cash when he buys enticing the seller to not report this income either.

How interesting.

–Anubhav

 

How many uber drivers does Delhi need

 

Saw today that there are 20,000 drivers in the SF bay area on techmeme.

Comparing this to Delhi, where population density is almost 30 times that of SF bay area. But no more that 30% of the population would really be relevant, I’ve come up with the following figures when I  try to keep the same number of drivers/person in both the cities.

Population Relevant population area (sq kms) density (people/sq km) Uber drivers driver per person
SF bay area 7.44E+06 7.44E+06 18102.19 411 20000 2.69E-03
Delhi 16753235 5025971(30% of total) 1482.981 11297 13510.67 0.002688

Seems like Delhi needs a lot less drivers than the SF bay area unless more people can afford taxis here.

–Anubhav

Hiring a product manager in India

I got promoted in December 2014 and started building my team post Christmas. This involved hiring two associate product managers and one product manager.

I started hiring for a these roles in the first week of January and got the last person to join on the 27th of April 2015. It look almost 4 months from start to finish when sourcing resumes was not a problem because I work at Adobe in Noida and that other PMs referred almost 90% of all candidates. I looked at about 60 resumes.

The resumes seemed remarkably consistent on the surface. All of the candidates were engineers and had an MBA. Very few of them had any entrepreneurial experience or had a background in design. This is typical.

The candidates were rejected for the following reasons:

  1. Attitude and fitment – this mostly happened in the interview stage
  2. Claiming more than they actually knew – rejected during phone screening by me
  3. Lack of fluency in English – rejected during phone screening by me
  4. Lack of understanding of software analytics – rejected during phone screen

The candidates that were hired had the following characteristics:

  1. Hunger to learn
  2. Excitement about the job
  3. Basic analytical skills or sharpness to converse on various topics in the software industry
  4. Strong communication skills –written and oral
  5. Honest!

What did I learn from this experience:

  1. Do not trust resumes
  2. Talk to every candidate on the phone or skype before bringing them in for an interview
  3. Ask them to present the plans for the product they are interviewing for before interviewing them to ensure they can really build a POV on the product and communicate it well
  4. Ask for a writing sample where the candidate explains why they will be good for this job

I will post a follow up with more details on the demographics and educational qualifications of the candidates soon.