You are paying 200% tax on the petrol or diesel that you are buying. Believe it or not, it is actually true. 200% is indeed too much to think, but an Indian today buying fuel is paying this much amount of tax. This includes both for and against this government.
The only tax that grew, year on year!
India has famously avoided getting Petrol/Diesel as part of GST. Both Centre and States are responsible for it as they see it as a cash-cow that they can milk to the most. In a quasi-federal state set up that India has, the GST was always an exception.
The chart clearly shows that the Excise Duty is the only tax income for government that has grown. Source: Centre for Monitoring Indian Economy.
Excise Duty is the only tax revenue that grew as compared to 2019 – which should be surprising given every other tax revenue has fallen due to the lock-down measures. But it is not. Because we know that Govt has been raising the taxes and cess on Petroleum fuels constantly.
You are being taxed unfairly – A unmanned car at petrol pump
Deregulated Petrol Prices, an eyewash?
Normally, the price of fuel after deregulation was linked to the Crude Oil prices. That has changed in the current regime. When the global prices started hitting the low, the Govt. instead of reducing the price, increased the taxes.
They did what the Chinese do – take two steps forward, and take one step back. The excise duty on petrol was increased by ₹3 per litre in March. In the month of May, they again raised by ₹10 per litre. So much so that, today it stands at ₹32.98 per litre.
Costliest Petrol in Asia?
Petrol that you buy in Delhi ₹81.12 per Litre today is among the highest you pay for petrol in India. In Islamabad (PK), the price for a litre of petrol is ₹46.29, in Colombo (SL) it is ₹54.86, and in Kathmandu (NP) it is at ₹66.52.
Nepal buys petrol from India, at half the cost you and me pay for a litre. That in itself is a clear indication of how unfair the prices are taxed. Even importing a car attracts only 60% to 100% duty, but you and me pay more than 200% taxes on Petrol.
With COVID19, consumption sure has taken a hit given a lot of users are now working from home in the urban areas, while consumption of diesel has more or less is back to pre-Covid levels. The difference is marginal and indeed the govt of India is making a lot of money from the petrol taxes.
The only hope is – it all be used for the right purposes.
Fake news is in real news again and this time, a funny move by the government. It seems that Government is aloof from the ground realities, or chose to remain so… (Update: PM Modi asks I&B Ministry to withdraw the fake news order, read below)
I read this report from HT, that fake news publishing journalists will lose their accreditation temporarily or permanently depending on the frequency of violations. Well, the jury is out there to judge but who is going to take the action? Just about a week ago, I had wrote an article about how farmer’s protest was being used in a twisted fashion to ignore the real crux of the protest itself. However, it was on digital media though, and for which we do not have any concrete rules yet.
According to the report:
“We have the Press Council of India for newspapers which is different from government and still self-regulatory enough to awaken its own conscience and take a decision that will bar such processes. Similarly, for television news you have the News Broadcasters Association. I’m hopeful that such a similar body will also emerge for social media at least in the news, opinion and entertainment content,” Irani said at a recent conference in New Delhi.
The minister said a line of ethics and a code of conduct had to be put in place to ensure that customers do not get affected by vested views in news, broadcasting and advertorial content. The efforts come even as governments around the world are figuring out ways to tackle fake news, especially in digital media. It is now widely believed that the Russians used fake news on Facebook to try and influence the outcome of the 2016 US election.(Hindustan Times)”
So WhatsUp Fake News?
The problem is that India is in a reactionary mode, when the intellectuals questioned on our Government’s action. Many countries have already launched investigations and are considering swift moves to ensure there is a curb on fake news. However, India’s stand is clearly not standing up against Facebook and other carriers of fake news but Journalists.
The real problem though, is that there is no way Govt. or an individual body / organization that is regulating news on social media.
Fake news? Journalists to lose accredition if found faking news. However, that is the wrong target group!
And the government firmly believes that it is the news organizations that are spreading the fake news? Well, herein lies the devil! The last I checked, I had seen many accusations across media houses being cronies to a political party. Some of the current rumors say that Times Network is pro-Congress and Republic TV is pro-BJP. While in the state of Tamil Nadu, politics owning up the entire media, is no secret.
Fake news are now used as a medium to draft in ignorant people into the a belief that other party is wrong. Or glorify a party and their leaders. Or spread a religious hate in the name of an action or inaction. This is either being done systematically or just people who fan-follow a particular party or religious ideology. The real problem though, is that there is no way Govt. or an individual body / organization that is regulating news on social media.
What is the Govt. going to do now?
The real problem is that government is focusing on journalists, and not the subject matter itself. The double edged sword, if I may. Focusing on journalists may help the ruling party to keep them in check, and that journalists toe to their lines while ensuring intellectuals that they are trying to do something. I am not saying that Govt. is planning on doing that, however. But there is a possibility that it can happen, if the need arises.
Another issue, majority of fake news online is not published by journalists. Surprise! You will not get an easter egg if you guessed that already. Majority of the fake news is spread through domains that are bought temporarily. Websites are specifically created to publish fake stories. Or blogs written by fanatics! In fact, there are fake story factories that operate in India just like any other offices are run with financial support from who knows who.
With elections happening in the upcoming year, every party trying to compete will want to ensure that they have access to fake news. Because, in this country of intellectuals, there exists a creed that believes everything that they see online. Our blood is too easy to boil when we see a doctored video of an civil war elsewhere and the title of the video says – Jammu and Kashmir. Yes, even if they have never ever been to Jammu and Kashmir.
No action of Facebook or WhatsApp yet?
Well, according to Economic Times report, India is still deciding if we need to summon Facebook! While a notice was sent to Cambridge Analytica, they are yet to respond and have asked for more time. So yes, there is some movement. It is still reactionary, as an investigation may lead to an open can of worms that no one wants to see. At least in the political circles.There were some rumored links between Cambridge Analytica and Congress. Clearly, if it is true, the Biritsh firm failed in their delivery.
How to identify a fake news?
Well, that is a question we all have been asked, have not we? I, for one, am able to distinguish between fake news and real one if I read or see something that is too good to be true. Fake news is like those email scams originating from African continent. So here is a quick cheat sheet to ensure you are not falling for a fake news.
If an article sides only one side of political or religion spectrum, then it could be fake news. Remember, real news will almost never side with a political or religion issue. It will state facts.
Verify if similar news is available from other sources and not just one website. If it does not appear anywhere else, then chances are that it is genuinely fake.
You will never know which medium it can filter through! Do not believe everything what you see and what you hear! #SayNoToFakeNews
There are many who edit videos and mix then with another audio and try to show someone or an idealogy in wrong light. Identifying fake news tends to be difficult for people who are old and are new to the digital world. However, in India, even youngsters are being swayed by such fake news. I just un-followed two of my friends from my Facebook because they almost always shared fake news. I tried to reason with them, however most of the time it was futile.
Update: PM Modi asks I&B Ministry to withdraw the fake news order
#FLASH: Prime Minister has directed that the press release regarding fake news be withdrawn and the matter should only be addressed in Press Council of India. pic.twitter.com/KVUBeAoDhC
We all heard about the farmer protest that is currently undergoing in Mumbai. The protest showcased events that are unprecedented. It leaves me in awe of the spirit of Mumbai and the farmers themselves. What a day it has been of twists and turns. It all started off with someone deciding to protest differently.
So why are farmers and tribals protesting?
Maharashtra farmers see successive droughts and are unable to make as much money as they should. They are in financial distress and are seeking financial relief. To save themselves from further droughts, they want to ensure that promises of river linking projects are implemented.
Tribals who joined the protest are not looking to seek any financial help though! “Their participation in the agitation in such large numbers suggests a new edge in the countryside’s despair — while successive drought years, inequitable water management and pricing policies have seen a slow impoverishment of the farmer community everywhere in Maharashtra, the circumstances for the landless are ever more exacting” (reports Indian Express).
The quintessential Maharashtra farmer is following a protest model from TN Farmers, who marched on in New Delhi last year. Tamil farmers raised slogans, shaved their half head and facial hair to protest their apathy. Mind you; the protest still did not gain the intended results. And farmers from UP got a loan waiver around the same time, based on a poll-promise by the Yogi government.
I wrote about this briefly, after a Quint video brought forth a question: UP farm loan waiver, in a way, is funded by Tamilians based on how fragmented our taxation system is. I do not want to diverge from the topic; you can read more on that post.
They decided to walk in the night, to avoid inconvenience to Mumbaikars!
That’s where things started to change. The Government, instead of walking towards them, shamelessly requested the group to delay their march to avoid inconvenience to SSC and HSC students who are appearing for their exams. This was a bid for them to delay the political inconvenience they will face!
However, the smart among them help decide that they would walk in the night, saving themselves from the scorching sun. And avoiding the fragile Mumbai infrastructure, often lamented, further trouble. This small gesture, and the smart thinking is downright awesome.
The Spirit of Mumbai invoked!
Wow! That was an incredible thought which touched Mumbaikars deeply. And Mumbaikar responded!
Sikh brothers distribute food, muslim brothers distribute snacks,dates & water, some Mumbaikars provide breakfast @ Azad Maidan with footwears 2 farmers walking barefoot. Sea of farmers 2 meet CM over non fulfillment of promises made by Mah Gov pic.twitter.com/8YtsTo4BK6
Favourite photo from #KisanLongMarch this afternoon — Farmers have no access to electricity so Lakshman Bhasre from Tryumbakeshwar Taluka has been marching for 6 days with a tiny solar panel on his head. He uses it to charge his phone and help other marchers charge theirs. pic.twitter.com/3He32abd4z
I am amazed at the thought itself, and the speed with which Mumbai realized the importance of the farmers. I have often lamented the Spirit of Mumbai as something of an adjustment they do with their helplessness of the infrastructure (during floods mostly). However, the 2007 blasts and yesterday’s event highlight the spirit and how heartfelt they are.
The farmer’s protest in huge numbers brings out Mumbaikars on the road, to be the Good Samaritan they always have been in crisis. Farmers are in crisis today, and the Spirit of Mumbai in invoked. Keep up Mumbai! The hands that feed deserve this small, but meaningful gesture.
Since today morning, I am seeing many people adjudging the disappointment for the salaried class as a massive binge. Also, I had someone on my facebook writing that Salaried Classes deserve to be taxed, himself a blogger and son of a businessman. He had his points of trouble too, which I do not ignore. However, the fact remains that 1.76% of Indians pay income tax remains a sore point.
Let’s get some facts straightened out.
Only 1.76% of all Indians living in India pay direct tax (income tax) (NRI’s are not taxed either). However, 100% of Indians who can spend money are assumed to pay indirect tax. The key word is “assumed,” as there are no statistics to define tax evasion because it is only kept a secret from the government.
Tax evasion (especially by businesses) still the bane of Indians themselves. Everyone wants to see what he or she can save from paying income tax, including avoiding paying tax in any form, at all.
52% of Working Population is classified as Farmers do not get taxed for their income (even though few make as much money to own many luxury cars!) (ref: 1, 2)
There are no statistics on the number of beggars or homeless. However, they do pay Indirect Taxes as well.
The Pro Budget 2018 debates floating around
Middle Class benefit from lower home loan rates, lower consumer price index and fiscal deficit and income tax slab rates being appropriate. An article at OPIndia.com states:
“And while we are at it, as a bigger consumer of goods and services, middle class benefited most from the GST regime. Those struggling to make ends meet don’t care about restaurants and hotels. You pay 5% GST now, compared to a 18% Service Tax earlier on that dinner out. That rebate is entirely yours. “
GST on Restaurants
Well, not exactly true. The ground reality is that before GST, a large number restaurants did not charge taxes separately. The food menu was almost always inclusive of taxes. However, when GST was announced, almost all of the restaurants were charging GST over the top of their pre-GST rates. This was well published in leading newspapers based on citizen reports.
After GST was lowered for restaurants, the bill total remained the same and cost of food went up. This is called profiteering. And middle class do not have lunch and dinner at fancy hotels every day, Mr. or Ms. behind the pseudonym soulinexile, who wrote the article.
Not the only ones paying taxes?
Stop deluding yourself with the notion that you are the only one paying taxes. Your 4.31 lakh crores in direct taxes is just 19% of the total 22.17 lakh crore tax revenues collected by the Govt.
The author seems to forget that the salaried middle class who gets his pay after deducting income tax also pays indirect taxes. The above statement is willfully excluding this fact. It of course is a matter of concern for salaried middle class, on the amount of indirect taxes one ends up paying. In fact, structure of GST is build around avoiding double-taxation for businesses. On similar lines, the salaried middle class should get a rebate on his income tax outlay based on the amount of GST she or he has paid. Only to be fair right? That is not the case, and hence it is a huge concern.
A salaried middle class person, having an total income worth Rs. 10 Lakhs, will end up paying an average of 11% income tax plus an average of 17% GST on his necessities. That is 27% taxes already! Without even counting the GST on Investments, expenditure on holiday, travel, restaurants and the biggest of them all, taxes on Fuel!
What an non-tax paying citizen pays? Minus the 11%, everything else if she or he is being honest. So why should the salaried class continue to bear 11% additional responsibility for returns that everyone enjoys? For development of the country, of course!
The Farmers
Firstly, go and delete those posts you shared on social media lamenting about poor farmers, because you didn’t mean them. Everyone wants poor to be helped, farmer to be saved – but it should be paid for by someone else. Well, there is no ‘someone else’ out there, it has to be ‘us’.
The article assumes that we do not care for farmers. Heck, the author even has the audacity to declare our intent and actions in no less words than being mean, and accuses everyone of the social media shares and posts that we made in support of farmers because “you didn’t mean them”. Absolute trochaic, in line with all the so called Bhakts out there.
The skewed Taxation structure
The article assumes that Salaried Middle Class income tax payers expect that someone else should bear the expenses for the farmers to be saved. However the author ignores how diverse strategy our country and each state’s tax collection have. Here is a video that helps explain how farmers get or do not get compensation, a brilliant study by Praveen Chakravarty with BloombergQuint.
With such a complex tax collection situation, people living in the four states namely Gujarat, Maharashtra, Karnataka and Tamil Nadu, essentially are supporting the whole country with more than 50% of the tax revenue collection share. They are already getting way less than what they contribute for, not only in terms of direct taxes, but indirect as well.
Let us not forget the skewed national policy on fuel pricing, which is not under the ambit of GST yet, and may not appear to fall under it in near future. For sure, State Governments benefit from this situation, however, the common man still pays for them.
Corporate Tax Rates
And stop grudging the industry and corporates. There would be no middle class without industry and corporates. You would be poor class in no time, if industry died. So it already indirectly benefits YOU.
It is an universal phenomenon that Corporates should be treated well for they create jobs, and benefit the society. In fact, I have not come across many middle class individuals who complained of it either. The complaint is mainly with regards to tax evasion. If tax evasion is plugged, the this country does not require 1.76% of Indians to pay Income Tax! That is a reality, and let us not forget it.
India is among the largest countries in the world and have a population to feed. For how long can this 1.76% of Indians continue to pay income tax for the rest of the country? The income tax base has to increase for both salaried and business, and once we are collecting more than enough money reduce the tax rates. Salaried Middle Class is worried the budget did not focus on anything that remotely suggests government is doing to catch hold of tax evaders.
Comparisons to previous governments
Middle class has a serious Ghajini disorder! We forget the days of 10-14% inflation under UPA-2 or even when Toor daal prices being at above Rs 200/- in 2015 were a matter of middle class outrage.
How does a comparison helps? Calling middle class Ghajini is an insult, when the author itself forgot other aspects leading to inflationary costs?
Inflation rates were high and low during UPA government, true. However, the inflation was on its downward spiral already when the new NDA government took over already. Take a look at this graph from a global reputed website managing inflation numbers for many countries.
Inflation Rate India (http://www.inflation.eu/inflation-rates/india/historic-inflation/cpi-inflation-india.aspx)
NDA government did not had to battle global cues. Like spiraling crude oil prices and international financial conditions that kept UPA-2 on their toes. They still managed to keep the prices of petrol and diesel to the limits. The fuel prices ensured that inflation did not exceed limits that living for a common man became difficult.
I am not advocating UPA or Congress, however they did have issues at their hand, out of their control to manage. The fiscal deficit was not under control for the same reasons. Because the government had to keep up the subsidy rates for a lot of essential products, including agricultural fertilizers.
Other “WhatsApp forward” arguments
Lower Home Loan lending rates
My home loan interest rate at the end of 2013 was between 9.5 to 11.25%. It has come down to under 8.5% now. (Keeping SBI as Reference) Even a difference of 2% Rate in a loan of 30 lakhs gives you savings of 45000 Annually, as per SBI Home loan calculator. Is that not for middle class?
The argument that lower home loan interest rates is saving the salaried middle class up to Rs. 40,000 a year is a farce!
Home loan rates are less for sure, but that does not itself qualify as a middle class focused. It even helps the rich and poor. Moreover, yes, those who are not paying home loans are higher in numbers – and therefore, absolute lack of any benefit for everyone.
Plus, many other factors influence home loan rates than just because the government wants to reduce it. Also, why are different types of loan rates expensive when the prime lending rates are same for the banks, after all, aren’t they?
REPO Rates
Inflation impacts Home Loan rates, itself based on REPO Rate set by RBI. Wholesale and Retail Price Index, Current Account Deficit, International Gold and Oil prices, etc. are other factors.
Some of the factors usually considered by the central bank are;
The central bank monitors the trajectory of inflation before deciding on the REPO rate, to maintain economic harmony
They study and predict the future inflationary pressure to create a REPO rate to control the economy
Fiscal deficit rate promised by the union government in their budget plan.
With a higher Path of Inflation, Wholesale and Retail Price Index and Weaker Oil Prices but higher domestic pricing, it is easy to see why RBI decided to lower the REPO rate.
Remember, majority of the benefit in loan rates we see today is in no small part, thanks to Raghuram Rajan whom Modi Govt. did not see fit to be part of RBI and went against them!
The lower Consumer Price Index or CPI.
Average Consumer Price Index (CPI) was 10.92% in 2013 while it is 2.49% right now. JUST IMAGINE, what would have been the prices of the goods of common usage if such a high CPI rate was still there
The inflation rate is based upon the consumer price index (CPI). And it is not appropriate reflective figure of what the typical Indian faces in reality. CPI does not necessarily translate end-user impact is. From 14.9% in 2009, even the Congress government had managed to bring it down to 5.86% in 2014. But did you see the impact on the ground? The point I am trying to make is – you cannot adjudge impact on you individually using these rates.
Every time petrol prices have gone up, the majority of vegetables and other commodities that are necessity become pricer. With a favorable change in petrol prices, the rates never went down. Ask ourselves, what was the cost of vegetables four years ago and how much they are costly now? Consistent with what happened during previous governments, including the ones ruled by Congress. Cons of any party in power are too significant not to have an impact on the actual aam aadmi.
Lower fiscal deficit invites investments
Fiscal Deficit was 4.1% in 2013 while it has been targeted to be 3.3% for 2018 (Through this budget only). If we don’t reign in the fiscal deficit, it will lead to manipulation of capital structures, interest rates, will lead to decrease of net exports and will result in even higher taxes and higher inflation. So, dear friends, the budget is also aimed at keeping the inflation in check (Such are the strange ways of Economics)
Fiscal deficit is one thing that we can think of where Govt. has been focusing right. However the focus has not brought in the expected impact on the ground. In spite of global cues like crude oil trading low and positive from FD point of view. There is more unemployment today than investments India is attracting. For the sake of argument, why would the government dole out a budget that impacts or delays the reduction of the Fiscal Deficit? It is absolutely counter productive to appraise this budget on this point alone.
Because this is an election budget, as with every govt., they are selfish to ensure they win the next one! The Agriculture push in this budget only came after BJP nearly lost out on their plot on the development to the plight of the farmers in Gujarat! Who paid attention to the farmers protest in Delhi this year long? No one, because by then BJP had successfully ignited the Karni Sena-Padmavati uproar.
Fuel Prices
It is difficult to know where all this money went. However, unlike Jaitley said in the press conference, the increased tax has not led to better roads in places where we have lived or traveled. One notable exception is highways; however, I use our city roads more often than highways.
Global cues influence increase in fuel prices. However, when the barrel costs were down, the Govt. refused to pass on the benefit to consumers. No, it does not only impact ones who own a car or bike. It is the transport sector which uses diesel to transport goods that you and I buy. Petroleum product prices are directly proportionate to incrementing inflation. However not so much to in case of a decrease in inflation!
Tax Slab Rates
Big decisions like these can never be viewed in Silo. We also need to find out a pattern and if there is any rationale behind it. Most of us were expecting at least a tax slab raise to INR 3 lakh per annum from INR 2.5 Lakh per annum which means a saving of INR 2500 per annum as it in any case fetches a tax of 5% only to the Government or INR 208 per month.
I was not expecting an increase of mere Rs 50,000. I was excepting a whole lot more. Jaitley said from before elections, that Income Tax should be exempt for up to Rs. 5 lakhs. And it is a relief as compared to just 50,000! Also, all of us irrespective of our income tax accountability end up paying indirect taxes at everything that we buy. So what is the point of taxing personal income then? Majority of the new taxpayers in the economy are in that bracket. It helps these new employees save more money or spend it!
The jibe Jaitely gave out during his budget speech about Income Tax from Salaried individuals was more than people in business, do you think it is right? I mean, sure Salaried get their share of taxes cut even before their salary is credited every month. Businessmen evade taxes!
The government decided to Demonetize this economy in the hope of curbing tax evasion! And if even you do not admit it, you know that it was an actual failure on the ground. It did help in a marginal increase in tax paying business; however, that did not help you and me, did it?
It is easy to get carried away by propaganda, much difficult to sort out the differences. So look at ground realities and stop dreaming of an India that does not exist today. Live the reality. Please.
I am sure all Indians know of the demonetization move by the Government of India. There was a huge ruckus on the streets as ATMs ran out of cash. So many wasted productive hours in queuing up for the much-needed cash to go through about their lives. In one swift move. Life has changed.
Comedian Kunal Kamra explains the situation is the aptest manner in this video here. Before this government came into power, one of the most profound campaign subjects was corruption and Swiss bank money. The promise of taking money from Swiss bank accounts of Indians and distributing them to every Indian citizen was too firm. Alas, we saw nothing of it.
Demonetization Impact
For obvious reasons, demonetization is one of the most talked about subject in the last six months. There is so much written about it, that finding my blog via a regular Google Search is hard. Of course, the government cannot accept it, even though it is morally obligated to accept something that goes wrong.
Sure, the impact was greatly felt by the common man. The same ones that Government was trying to protect and improve his livelihood. Being the large cash economy that we are, it is hard to live without currency. The merchants insisted on getting money in currency notes, and the onus was on us.
The digital currency that exists is, even today not preferred by retailers. I went to a hardware store the other day to buy RCB socket costing Rs. 1900. I asked him to take debit or credit card and he immediately said that I would have to pay 2% services charge.
I declined to pay 2% extra, and he asked to pay in cash. All other shops were charging me Rs. 2100 for the same product. I had little choice. So I went back to the shop and just by chance asked if he accepted Paytm. He said yes, and he won’t charge 2% extra. I paid from Paytm. For me, it is digital money. I don’t know how he is converting his digital money in PayTM.
He can pay his electricity bill from PayTM for no charge and would avoid paying tax on that income. He can transfer PayTM money to other numbers and stay below 20,000₹ limit to ensure he doesn’t have to furnish KYC.
How has government assessed demonetization performance?
In an earlier statement made during a parliamentary session, the government stated that found about 11 crores worth of fake currency.
In a more recent report, Rs. 15.44 lakh crore in banned currency notes deposited in banks (99% of the amount circulated). The 1% loss is worth Rs. 16,000 crores. Well, that does not sound much of a relief then, does it? Many of the notes that never made it back may have severely damaged (floods could cause it). Lost in places not found in time to deposit in the bank (I have 20 notes of Rs. 1000 at my home in a piggy bank) and many kept it as a souvenir (I know I did before I found these 20 notes).
There is every chance that 0.5% of the currency bills that never made it back to the system, is genuinely lost. Or purposely held back, but not for avoiding taxes. Essentially, of the total, approximate of Rs. 8000 crores may be the black money.
Why this move to demonetize went wrong?
What was worse is that Government introduced new Rs. 2000 and Rs. 500 notes as replacements instead. This move killed the initiative. In the immediately following days after announcing the demonetization, police made many arrests, including politicians, for hoarding the newly launched Rs. 2000 currency bill – when people were dying in queues to get even one. How did that happen? And who is to be blamed for it?
Instead, the government should have printed more of Rs. 100 notes and pushed people to go digital. It would have made people take up the digital mode of payment and stop using currency for all bulk transactions. All of the hawala transactions would have to be carried out at higher risk because of the volume of the notes they would need to bring.
Many people were allowed to submit up to 1 lac without attracting an investigation into their accounts by the Income Tax department. The government also invited those tax evaders to declare their income, pay taxes and convert their black money into white. While these did help a bit in collecting taxes from a certain number of people, these are such small amounts that government has not come forth with any figures. Rather, they have generalized that tax collections have improved.
It did have an impact on terror funding, but only till the time more currency notes were available. The tension in Jammu & Kashmir is still prevalent. The move helped banks by bringing in cash into the banking system, and therefore lowering the cost of loans – benefiting both citizens and banks alike. But at what cost?
And what about today, almost ten months after this monstrous (the size) move, we are yet nowhere near eradicating of practices the demonetization was intended to achieve. Merchants still insist on selling goods without a bill, transact in cash and charge an additional surcharge.
Skewed Taxation
GST has further complicated matters, and its implementation has been sketchy. We, the common man, have not felt the impact of GST yet. The prices of products are still the same; numerous examples have surfaced where restaurants, who do not even have a GSTIN, charged GST on customer’s bills! There is rampant profiteering by many merchants, and still, Government is busy defending itself from the demonetization debacle.
As such, tax collection in India was always skewed and was never effective. Four industrial states make a lot more money in taxes and almost bear the brunt of getting far less in return. Here is an overview of a Bloomberg Quint report.
Bloomberg Quint – Devolution By Centre To Average Resident of Each State
Bloomberg Quint – For Every Rs 100 Given By Each Resident To The Centre
Bloomberg Quint – Per Capita Contribution To Central Taxes By State
The government has many steps to take to ensure that tax evading is not happening. Demonetization has in a way helped, with the new Rs. 2000 currency bill.
Do I fail to understand, as an ordinary man, why all this has happened? No, I don’t. Learnings from similar moves taken place in many countries never taken into consideration? Good intentions are welcome, but converting them into actions is the need of the hour.
Share your thoughts with me in the below comments section. Do you think it was demonetization or demon-ization of the Indian economy?
Karnataka announced farm loan waivers amounting to Rs. 50,000 per farmer for loans from Cooperative Banks. Earlier, Punjab government announced waivers up to Rs. 2,00,000. Maharashtra Government waived off loans completely for small and marginal farmers. It all started with Tamil farmers protesting for waiver of loans, but they were in for a rude surprise when UP CM Yogi Adityanath announced waiver up to Rs. 1,00,000 for his state.
Alright, let me clear out few things here before you read further:
I am not against farmers getting financial assistance to help with their plight, caused by bad monsoon and drought.
My analysis is based on what I have read in news, my own sources who know a few things in this matter and data available in public on our country’s finances.
So why I am writing about it?
You know, many of you who are reading this, pay taxes. Heavily at that. Income Tax at various slabs, and many more via indirect taxes on things that we consume. I pay a heavy amount as well, and it pinches me. It pinches me to think if I lose my job tomorrow, can my home loans be waived off? Or my personal loans?
I can see many of you laughing. But ponder on it, and you will realize that things are not right with how India manages its own finances. These farmers likewise pay barely any taxes and whatever they pay is minuscule. Fair to them, they do not make hell a lot of money themselves. But their income taxation is not what is should be ideally. In this post, I am also talking about how much they themselves make for the hard work they put together.
Idealists would have me plastered into wall for asking farmers to pay – but truly, anyone who makes money should pay taxes.
It is true that farmers do not make enough, and you know it. You have heard it all around. So if a farmer, who puts his blood and sweat out to make food for us does not earn enough, who does?
Farmer’s don’t fetch enough for their produce
The middle men make the most of a farmer’s produce, and that is what is hurting farmers. They buy the produce at cut-throat prices, and sell it at almost 60% margin. You will hardly hear noise in media or elsewhere from these middle men on any major economic impact in this country. Should that not surprise anyone of us?
Our economy being predominantly agrarian, it should not be difficult for a farmer to make more than enough money to survive his family with decent level of life. But truth is far from that. Very few farmers, who have do harvest a lot of crops and have diversified their farm bases make good amount of money. Small farmers do not. Wafer thin margins on their hard work ofter leave them poor.
What should be done?
To ensure the root of the evil is managed, government should review the process of farm produce being sold. Today we have government collection centers where produce is sold at market prices, however those centers are far off, centrally located.This prompts small farmers to approach middlemen.
Monitor middlemen. It is easier said that done. Since majority of transaction happen with cash, there is no trace of purchase v/s selling price for farmer. Introducing a singular, digital mode of payment can ensure this is tracked and appropriate taxation can also be recovered that gets lost due to unrecorded transaction.
And you, can try to procure more locally or from big malls that do buy produce direct from farmers.
Update: After I quit the accusations were still flying around, and some well wishers and naysayers informed me a few of them. Here are my clarifications.
I am accused of lying – that I never told them web server space cost Rs. 15,000. Well to be honest, I lent THT the server space that I already owned and operated and I did not buy it specifically for THT. That is why I never told them there will be any cost to bear in the first year! If people cannot understand difference between lending and buying, I cannot help!
I am still accused of my intent of making money from website – this time, conversely with the thought that I would have made money from the hosting space renewal that THT will be buying in the second year onwards. Here is an excerpt from the charter that I had created, where I was supposed to be signatory as well, but which was never signed for god knows what reason.
To talk about being responsible and put things in context, let me redirect you to one of my recent post on bomb blasts in Pakistan. It was horrible, but there was a particular behavior the caught my eye. Earlier this year and late last year, there were two other blasts that shook the world – in France and Belgium. It is a sad example, I know but one that teaches how selective we are. My Facebook timeline was flooded (Disclaimer: I did not do it on both occasions) with people updating their profile picture over-laced with the French and the Belgian flag.
But the same thing did not happen for the blasts that happened in Pakistan. Does that have to do with the frequency of blasts in Pakistan or the hatred that we carry for them? I also posted the article link on Facebook, earned absolute Zero likes and comment – may be the text I wrote there was probably in-your-face! (more…)
I have been reading a lot about the US Elections and about how Donald Trump is blowing his own trumpet to woo voters in his favor. That said, the method he has used sometimes are downright cheap and not fitting for someone who is contesting for the post of President of United States of America.
Donald Trump says that “I’m the most successful person to ever run for the presidency, by far.”
Well, I am no one to judge if Americans think he is the right candidate, but I would start questioning a majority of Americans and way of their thinking if at all Trump wins. Someone who has a net worth of $9 Billion, and not shy to praise himself, one has to think too hard to say this guy is running be a President of USA. His campaign team differs on his net worth by one, to count it a $10 Billion net worth instead.
“A total and complete shutdown of Muslims entering the United States until our country’s representatives can figure out what’s going on”
The flag carrier of India will be flying an all women crew this March 8 to celebrate Women’s day on a flight to San Francisco. This will include 4 pilots (2 each in 2 shifts for the unintended) and the whole cabin crew during the 15 hours Delhi-San Francisco. To top it and make it even more interesting, the flight dispatcher and flight engineer will also be women.
So if you are flying to SF on 8th of March, you are sure to support and celebrate Women’s day just by flying Air India. Yay, Celebrate women hood up at 35,000 Feet!
I was wondering if a similar treatment will be meted out during International Men’s Day. Well, chances are that it won’t ever happen. Now, I have written in the past how fliers constantly nag about Air India’s older flight stewardess/hostesses and there are such a negative notion that many carry. Though people ignore that they are much more experienced. However, have you ever heard any one complain an aging male crew? Is it because it never happens? I am not sure, almost all the flights I ever flew had both male and female crew.
The situation is what it is, and I cannot speak for everyone. But for me, it won’t matter if it is men or women who are flying or providing services in a flight as long as service are great and makes your journey comfortable and you get what you pay for. Air India remains my favorite (with patriotic bias stepping in)
What I think Air India or any other airline should do is – ensure you have an All Women Crew on at least 1 flight every day. That would help you celebrate women hood. Every. Freaking. Day.
I was planning for a week-long trip this November, and my plans started falling apart after I saw the airline ticket prices going up rapidly. The day (23rd Sept) I checked the fares, return tickets for two adults from BOM (Mumbai) to IXB (Bagdogara) via DEL (Delhi) travelling in November on Air India (1 stop with the lowest layover time) costed Rs. 19,601. The fare for the same flight went up to Rs. 22,408 the very next day. On 3rd day, the fare again changed to Rs. 24,402. Today, the same flight tickets would cost me Rs.36,282.
Woot! That’s a rock solid increase of Rs. 16,681 in ticket fare in just 4 days for a flight trip planned almost 2 months in advance. I had to wait for my salary to come to book trip tickets for this huge amount, and it now does not make any sense. As you might assume, I backed off from booking the ticket. (more…)
If you had a chance to read my post on The Great Indian Elections of 2014, there is something I had already said but did not anticipate it any time soon. Yes I am talking about the recent Communal clashes at Muzaffarnagar in Uttar Pradesh.
For once, there is no clarity on what caused the riots – with numerous stories doing rounds on social networks. And I have seen a few of my friends on Facebook starting to post messages – things that say or give more importance of Hindutva or Hindu Nationalism. I choose to ignore those messages, however many others may not.
Following these clashes, an announcement by BJP led me to write on this. BJP announced that they will send Modi to Muzaffarnagar too. (more…)
