The value of Nvidia company, which makes semiconductors for AI, is more than India’s GDP. Elon Musk has become the richest person in the world with assets in more than 174 countries on the basis of shares of his SpaceX company. Data, oil and AI – Donald Trump is trying to maintain America’s dominance through these three big things. There is increasing pressure on India to import American goods and services worth 500 billion dollars i.e. 47 lakh crore rupees in the next 5 years. In the same sequence, data centers are being established in India, because machines and services for American data centers will be imported into India. It’s important to understand five aspects of this scenario: 1. American AI companies need massive data centers to succeed. In our general budget, tax rules are made only for 1 year. But under pressure from America, in this year’s budget, foreign cloud companies have been given income tax exemption till the year 2047. Due to this tax exemption, the target is to establish foreign data centers of 5000 MW i.e. 5 GW in the next four years. Not getting tax exemption for indigenous companies is not only a violation of the equality of the Constitution but also a violation of sovereignty. 2. About 25% of the world’s total data is being generated from India. America’s tech companies and owners are getting rich due to non-implementation of data security laws in India. Last year, transactions worth Rs 314 lakh crore were done through UPI, which is 49% of global real time payments. In 2018, the Reserve Bank had made rules to keep data safe in India, which are not being implemented on foreign companies. 3. The central government had said last year that foreign companies would get tax exemption only after setting up permanent establishment in India. Now they are not obliged to set up an office in India, hence India’s labor laws will not apply to them. State governments are allotting land and giving concessions to foreign data center companies. These data centers, with trillions of dollars of investment, will not create long-term jobs unless there is an industrial revolution. 4. Data centers require round-the-clock power or backup diesel generator sets. Electricity consumption in data centers will increase 6 times in four years. For their convenience, a new law for nuclear electricity has been made in India. Due to this, the risk of Chernobyl like accidents has increased. The power companies of the states are burdened with a debt of Rs 7 lakh crore. Due to data centres, the crisis of foreign exchange along with energy may deepen. 5. There is a movement going on in America to close data centers due to heat emissions and radiation. Rivers and ponds are already drying up in India, home to the world’s 100 hottest cities. India’s GDP may suffer a shock of 4.5 percent due to heat. More than 60 crore people in India are suffering from water crisis. Due to data centers swallowing trillions of gallons of water, the crisis of drinking water along with groundwater can deepen. Musk has become a Tech-Kuber by selling the dream of data centers in space and sea. End tax exemptions for foreign data centers that increase poverty, monopoly, unemployment, climate risk and imperialism. According to the Constitution, environmental protection and labor laws need to be implemented in data centres. In our general budget, tax rules are made only for 1 year. But due to pressure from America, in this year’s budget, foreign cloud companies have been given income tax exemption till the year 2047. What is the reason for this? (These are the author’s own views)
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Virag Gupta’s column: Why tax exemption to foreign companies instead of Indian companies?
