Even before he became the Finance minister, Arun Jaitley had his mind perched on tax reforms. In an interview that he gave to a popular business magazine, Jaitley said that a high tax regime makes the economy lethargic. He then proposed to rejig tax slabs and cut excise duties and in the lead-up to his first proper budget, revision of tax slabs has indeed come out. If his words are to be echoed, he does not want the middle class to carry the burden of running the country’s economy but tax the super rich instead. But hasn’t this rhetoric been heard previously?
How exactly is the finance minister going to take this ahead is also case in point? With a government being overtly capitalist and promoting privatisation like never before, there is one thing which is certain: more and more Gautam Adani’s and Mukesh Ambani’s will start claiming their right to the easy accessibility of capital for projects overseas even in spite of many of them having failed to get the same kind of funding from many an international banks earlier especially after viability questions have been raised on the project itself.
Nowhere has it happened that massive capitalist initiatives have not made the regular salaried people not take note of what is transpiring between the government- powerful by means of authority and the industry- powerful by means of cash filled coffers. But in a country which is clearly an outcome of populism itself, even a vague statement like the one that Jaitley has made, is bound to have its repercussions. But the question that still needs to be asked is- in what sense his remarks will be applied?
Tax reform is so murky a business in India that any talk of giving the middle class a breather is almost like an apostolic statement. While the super rich will continue to stash their ill gotten wealth in tax havens abroad, the middle class will not even have an iota of understanding that how systemically inflation is being heaped on them. If the government is as concerned about taxing the super rich, it should first ensure that it does it in the right sense.
A loan of INR 6,200 crore is certainly not the background for issuing a statement like that. Agreed, that the money may be used for exploratory purposes but will the government ever consider it viable to even check the account books of an Adani or an Ambani? And why should we not believe that all that the government is interested in is having the perfect equation with private players while the State owned enterprises (SOEs) can most famously wait for any kind of capital input even if they are profit making entities.
Agreed there are bureaucratic entanglements, but favouring the filthy rich, would also mean that the massive Indian population which has forever been living on government doles will have to bear the brunt if a sudden spurt in prices is announced and deregularisation becomes a thing of the past sooner than ever. Taxing is just another matter for us. We will continue to fight for them while the rich can enjoy interest free access to a huge scale of money.