City Progress Exchange

CPX-City Progress Exchange:
I formulate a new concept of an exchange which is quite novel and can be a key factor to the progress of a nation, the government and the people.

The concept is similar to that of a stock exchange where companies float their shares and accumulate wealth for their expansion and growth.

Why do we need CPX?

Today India is in a nascent stage of progress but still not very promising on all facades: Infrastructure, Employment, Poverty to name a few. In an effort to remove these obstacles from the lowest possible level, we need funds. The situation resembles to that of a company which has grown to a certain extent but faces impedance in further growth for the lack of funds.

For CPX every city is treated as a Public Corporation. The city will float its equities on CPX and the investors will invest in that city based on the growth prospects of the city.

But wouldn’t this result in exclusion?

Cities that are smaller and not recognized as economically promising may get nothing for their development. So some cities may get all the funds whereas some will starve for funds.

What about the villages?

The solution to this problem is simple.

A new concept of Pentat: A Pentat is defined as a group of 5 cities, which consists of one Primary city and 4 Potential Primary Cities. The Pentat cities could be located anywhere in India. So the formation of group is geographically independent.

Each City of a Pentat is obligated to adopt it surrounding villages till villages fall in the area of other Pentat.

To form a Pentat, a Primary city can be taken as one of the capital cities in a particular state. This Primary City can form a Pentat with Potential Primary cities of other States located anywhere geographically.

The invested money thus generated through CPX would be proportionately distributed among the Pentat cities which eventually would be distributing the money to its adopted villages.

Why would investor want to put money into CPX? What could be investor’s gain?

Well to start with, a Pentat, before floating its shares on CPX can designate certain township land for the shares purposes. The value of this land will determine how many shares can be floated in the market considering the face value of the equity.

For e.g. Bangalore Pentat can designate 100 Acres of land for CPX with a value of 9 billion rupees (assuming approximately 2000Rs per square feet of land). So a share with a face value of Re 1 will amount to 9 billion shares in the market.

Each investor thus becomes the owner of the land equal to the number of shares he/she possesses on the face value. An investor who possesses 2000 shares of face value Re 1 has the right to own 1 square ft. of land.

An investor can choose to hold on to such investments or do trading. In both the cases he would be trading on CPX on similar lines as he would on Stocks or Commodities exchange.

But the whole onus of attracting an investor lies on the Pentat’s shoulders. The cities have to do the marketing so that the investors choose to invest in the shares of a particular Pentat. More the amount invested, better will be the development.

An unbeatable advantage of this exchange is the reduction or total abolition of Taxes: Government can considerably reduce taxes for the traders investing in Pentats. The main idea of the taxes is to fund the growth of nation by investing in fields like infrastructure, defense, employment, etc. When people are investing in real through CPX for the development of the cities, the need for taxes is considerably reduced.

Moreover, opening an entry for the FIIs will influx a lot of money from outside for the development of the nation and there could be surplus money which would result in the rise in the standard of living. Lot of development activities will lead to a lot of high paying jobs and thus unemployment could be tackled as well.

To summarize, the benefits of introducing trading on cities has the following advantages:

1. Growth in all possible geographic locations
2. Growth in villages
3. Considerable reduction in the taxes.
4. Influx of lot of money for the development which will cause a rise in the paychecks of the labor force, thus raising the standard of living of every common man.
5. Higher levels of Employment.
   

This Idea is still incomplete. It may sound stupid or novel, but is whole and sole my copyright.