By Johan Dsouza Feb. 01, 2017
Our PM is a bit of a badass who has delivered the ultimate “fuck you”… but not to the middle class, or even the rich. It’s to all the “experts” who expected him to make amends.
his morning, Arun Jaitley presented the Modi government’s fourth budget, one that was widely expected to be an “apology budget”. After all, didn’t Modi & Co owe us an apology for the demon of demonetisation that they unleashed on us? For making our 80-year-old grandmothers stand in serpentine queues at ATMs that we would not even stand in for at H&M?
So when “media experts” yelled for an apology budget, we joined in. Let’s bring standard deduction back, let’s raise income tax exemption from ₹250,000 to ₹400,000, let’s slash tax rates across the board, let’s raise the 80C limit from ₹150,000 to ₹200,000. And hey, while we’re at it, why not do away with income tax entirely?
But Narendra Modi didn’t apologise this morning. All we got was a plain vanilla budget, which was actually a non-event and definitely a non-apology. None of the above save for a minor balm was offered as a salve for the pain of demonetisation because in truth, a significant tax relief would have made the pain much worse.
The belief that tax reliefs are a way of relieving the burden of the common man comes from a misplaced sense of understanding of how taxation in India works. In India, only 40 per cent of the organised sector pays taxes anyway. If you add the informal sector’s individuals, enterprises, and firms doing small business in India, the number of returns filed by this category is another 1.81 crore. So this is a total of 3.6 crore individuals who file tax returns, of which almost one crore (close to 28 per cent) show income below ₹2.5 lakh, which in essence means zero tax, and nearly two crore (close to 54 per cent) pay between ₹2.5 lakh to ₹5 lakh, which is the lowest bracket of tax, i.e. 10 per cent. So basically 82 per cent of the 3.6 crore either pay zero tax or a maximum of ₹25,000. In a country of more than 121 crore people, only 3 per cent pay taxes. Also known as chutiyas.
So yes, it’s darn right that the PM hasn’t offered an apologist budget and screwed me even more with tax benefits.
Why? Allow me to explain.
Narendra Modi has understood that the wealth in this country, as demonstrated by demonetisation, is ample. 1.09 crore accounts saw an average deposit size of ₹5.03 lakh and 1.48 lakh accounts saw an average deposit size of ₹3.31 crore. With this type of wealth floating around in the country, he knows that we need to get more people into the tax net, and that by increasing tax exemption limits more people would drop out, only making the exchequer poorer, not richer. By cutting just five per cent from the lowest slab the government’s loss of revenue is already expected to be ₹15,000 crore. By succumbing to any of the “expert” demands of an apology, this number would be far higher which will be either funded by new taxes or by borrowings, and guess who is left holding the bill? Me! Also, otherwise known as the chutiya.
So yes, it’s darn right that the PM hasn’t offered an apologist budget and screwed me even more with tax benefits. Now sure, there were things that he could have done, maybe by increasing the medical allowance or transport allowance. These would have been well-received and honestly much needed, but until more “armchair Facebook/Twitter/Instagram patriots” don’t step up to the tax-paying plate there is nothing that the PM can or will do.
Narendra Modi doesn’t owe us anything. Yes, demonetisation happened; it inconvenienced the hell out of all of us and some poor souls have paid the ultimate price for it, but as history will show, it was a much needed move. Could it have been planned and executed better? Hell yes! Poor planning and a bit of arrogance almost made this genius masterstroke an own goal, but it’s been nearly three months and we’ve survived, haven’t we?
Our PM is a bit of a badass who has delivered the ultimate “fuck you”… but not to the middle class, or even the rich. It’s to all the “experts” who expected him to make amends. The only people who should make amends are the people who got us into this mess in the first place.