Taxing the Middle
The rich have their sops, the poor have their subsidies, and the class in the middle continues to be put out to dry
The years we spent in school gave us the first indication of the difference in class. No, I do not mean economic disparity here. If you look back at your own school days, a certain category of students stands out. There were, of course, the toppers. The ones who scored the best marks or excelled in sports or inter-school competitions. The crème de la crème of students were the cynosure for the Principal and teachers alike.
Then there were the weak students and the truant children. The weak students received attention because no teacher wanted to hold a child back in class. The naughty kids, too, were a common topic in faculty discussions as they challenged the school authorities: they would cut classes, heckle teachers, smoke on the bleachers, or be up to other kinds of mischief. Bringing them back to the 'good child' fold was every dedicated teacher's dream!
And then, there were the average students. The ones who would attend all classes, turn in their homework on time, and score average marks. They participated on Sports Day but were never the star. Most often taking part in the March Past or the Drill; standing for hours on the field on hot summer days. They would participate in school plays too - relegated to being one of the many sedentary trees or stars on stage. The toppers, the performers, and the naughty kids who had to be encouraged more than others, often stole the limelight. But at every school function, the average students, the ones whose names teachers will not remember, would form the bulk of the audience sitting obediently and patiently on seats at the back. They received little attention from indulgent teachers, their mannerisms did not make them stand out, they were unnoticed and taken for granted.
Finance Minister Arun Jaitley's Union Budget 2018 made me and the rest of the middle class feel like those average students. While we form the backbone of the economy (we are undeniably taxed the most), we have been faced with nothing short of apathy. Considering that this was the Narendra Modi government's last full Budget before 2019 Lok Sabha polls, the middle class, too, had a lot of expectations. But between the corporate toppers and weak poor section, the noose around the middle class was tightened once more.
Jaitley left income tax rates and slabs untouched; the Rs 40,000 standard deduction means little when both health and education cess have been upped. Common goods used by the middle class such as mobile phones, perfumes, toiletry, watches, automobile parts, sunglasses, shoes, edible oils, juices, will all attract higher customs duty and will, therefore, be costlier. If that was not enough of a screw, this Budget has brought back from the dead the tax on gains made through share sale. While the government scrapped additional duty of excise on fuel, it cleverly offset the gains that the middle class would have accrued by introducing a new road and infrastructure cess.
This is not the first time the middle class faces the heat of increased taxation. For years, successive governments have bled us dry. Ever since the world started eyeing India's growing middle class with its expendable income and high consumption power, every Indian government has made the tax burden on us heavier. The FM has said that his government has put surplus money in the hands of the middle class with every Budget. I guess this time the government has decided to take that surplus back. The rich have their sops and the poor their doles and subsidies, while we who are in the middle, who are neither here nor there, continue to get stretched further. The middle class, which had a lot riding on the government's pre-poll Budget especially after 2017's debilitating Demonetisation, is understandably feeling disenchanted. The ruling party must worry if this unhappiness might translate into lesser votes coming from the loyal, dependable middle class that has been taken for granted.
(The writer is a journalist and media entrepreneur. The views expressed are strictly personal)