Now that the yearly accounts of the of the Indian government is published aka budget presented, I thought I also give my 0.02$ of wisdom on the same. At the outset this budget lacks the ideas needed to rev up the flagging Indian economy. This budget mainly addressed the rural distress , because of stagnant agrarian economy. It addresses the issue to the fullest and for that we have to give it due credit. It also takes on the burden of wage increases of government employees via the 7th pay commission. Which brings me to the section of the public routinely (or deliberately?) ignored: The famed Middle class.
Yes the same middle class which is often elbowed out of champagne economists’ discussion because this is the season of povertarian politics.Yes sir, pro-poor is the new porn which titillates, the Jhollawallas to the extent that they’re not sober enough to see the people in the middle of the pyramid. Yesterday some new channels aired the conditions of Indian farmers. While pitiable, it does show the Bharat, no one (allegedly) wants to see. But on the other hand, this is the Bharat which is repeatedly shown as the only set of people suffering in this country.
What the news channels conveniently ignore is the state of urban class struggling to meet their ends on a daily basis.The aspirations of these people also needs to taken into account , for they are also part of the society and are contributors to the society. All the coverage on the typical news channels portray is the stereotypical middle class office going guy or the common housewife. The guy gripes about poor railways, petrol price hikes, inflation and the housewife is upset because of rising vegetable prices. It’s indeed surprising that the media chooses to portray people in such monochromatic shades.
These are the real issues facing the middle class in India’s burgeoning metropolises:
1. Taxation.Coming to the most cruel part of being in the middle class is the draconian taxes placed on us. Before I even see a rupee of my salary in my bank account , its already appropriated by the friendly neighborhood taxman. To save on taxes I have to either invest in government securities or buy useless insurance policies(not even mentioning mis-selling done by insurance agents, it’s a topic of another discussion) that earn a pittance in real term. Of course the government also encourages us to take on a lifetime of slavery by taking home loans. and buy houses no one will think otherwise to buy. Poeple are battered into submission, because if , we fail to declare these tax-saving instruments, the axe will fall on us by the way of massive cuts via taxes. This reduces disposable income for future purposes. Also, we’re forced to pay huge taxes ranging from excise to service tax, tolls, levies, cess etc.
2. Social security: To speak of any government support during retirement years , is like cracking a joke.There are no old age retirement solutions offered by the government despite people paying lacs od crores as taxes. What we do get is moth-ridden and non-solutions like EPF whose proceeds are to be taxed at retirement. I can’t possibly imagine the audacity of these people to consider retirement savings as a revenue generation measure. As R Jagganathan points out in this brilliant article, “Taxing EPF withdrawals this way just when people need the corpus for generating post-retirement income is simply not worth the heartburn and needless harassment it will generate”.
3. Soaring healthcare costs. Apart from social security measures we also are bereft of any decent public healthcare . There are just enough government run public hospitals giving affordable treatment. Hence the middle class is forced to pay thru its nose for quality healthcare at private facilities.
4. Education. Frankly education now costs a bomb nowadays. I have seen my friends and relatives cough out 2-3 lacs per annum for schooling of a 4 year old tot.On wonders how many kidneys they would have to sell to make their wards a graduate in this day and age.We don’t get any concessions in this regard from the government and the tax rebate offered is a pittance of Rs 100/- per child /month. May be these were the rates for schooling in the 70s or the 60s , but these need to change in sync with time.
Some more ways we’re gipped is the fact that the poor have their politicians to turn to, the super-rich have their connections to people upstairs and hence we’re left in the lurch. Understanding the glaring fact that only 5% of India pays income taxes, its particularly iniquitous for us . The rich farmers are never taxed. I’m thus asking the question that no one really asks. As the Economic Survey released on February 26, points out: “In India today, roughly 5.5% of earning individuals are in the tax net. This statistic gives an idea of the gap that India needs to cover to become a full tax-paying democracy. Based on recent tax data…we estimate that about 15.5% of net national income excluding taxes (which is the national income accounts counterpart of the personal income accruing to households) was reported to the tax authorities as gross taxable income.”
As Vivek Kaul rightly point out in his article, “While, the government doesn’t collect enough taxes, the rich farmer has the best of all the worlds. He has access to free/subsidised water and electricity. He has access to free fertilizer and benefits the most from minimum support price that the government offers on the purchase of rice and wheat. In fact, the Economic Survey points out that the implicit subsidy on electricity is Rs 37,170 crore.”
The consequence of having such anti-middle class attitudes are very apparent ultimately leads to people being on the lookout for careers and lifestyle abroad. This cause loss of human resources (justifiably)to the nation and brain drain. The policy makers need to address these issues as well. Then only will there be Sabka saath+sabka vikas.