The morally-challenged UPA regime, accused of policy paralysis by big business seeking ever more concessions with each passing quarter, has moved quietly but speedily on a mission to decimate the middle class. Whether or not these measures enjoy covert political consensus, the fact remains that not a single political party has opposed this raid on middle class incomes through special cesses, even as inflation and petrol prices jeopardize its financial and nutritional status and hurt aspirations for personal homes.
A special cess on each bill paid by the citizen – besides income tax, property tax, sales tax, service tax, road tax, et al – is now the new normal. In one saving scheme where fixed installments are made for a fixed number of years, Rs. 155/- has been levied on every installment of Rs. 10,000/-. We need a white paper on what the corporate sector contributes to the economy if we juxtapose its taxes with ‘concessions’ like cheap land, tax holidays, cheap loans made free by not chasing default, and so on.
Some corporate leaders have decried the UPA’s decision to defer foreign direct investment in multi-brand retail, saying it hurts growth, while policy paralysis makes them want to live and do business elsewhere. While they are free to go wherever they feel welcome, some questions legitimately arise: what have Indian corporates given to the nation in lieu of the policy initiatives of the past seven years that favoured them over all other sections of society? If they need fresh concessions from government every year, does it mean all growth is illusory? If India needs FDI to develop the retail sector, does this mean that Indian captains of industry have no talent or resources of their own, and can only function as subordinates of western capital?
Currently, the Planning Commission, that brilliant body that said an urban citizen can live on Rs. 32/day [one litre of milk + one banana, till the next price rise], is pushing for a green tax of Rs. 2/litre on petrol, along with a 3% cess on vehicle cost to be clubbed with the insurance policy. This principal of polluter pays is being invoked to discourage ‘indiscriminate use’ of private vehicles.
In other words, government wants the middle class to buy vehicles so that manufacturers can maintain their elitist lifestyles, and banks can profit from the ever-rising interest rates on loans. But the common man should not drive these cars because politicians and bureaucrats who move around free at taxpayer expense want clear roads! No one admits that public transport is inadequate in many areas; no one dares suggest that if government doesn’t want cars on the roads it should close the factories instead of subsidizing them with land and other facilities at taxpayer expense. Why does government allow import of gas-guzzling SUVs or superfast motorcycles that cost more than cars? Anyway, should not such egalitarian schemes be implemented only after – barring the President and the Prime Minister – every politician and bureaucrat pays for his own vehicle, fuel, and parking charges?
As for the original idea of Globalization, it meant that Indian public sector firms like ONGC would compete for business abroad, like private sector companies. But despite its initial success, ONGC was made to play second fiddle to the aspirations of private firms. Other PSUs like Coal India were disfavoured as foreign multinationals bid for mines in India; VSNL and BSNL suffered from the un-level playing field created to pamper private operators (like freedom to use cheaper Chinese equipment). Now one corporate is throwing tantrums to force entry of FDI in airlines, while public carriers were denied profitable routes for the sake of some blue-eyed entrepreneurs.
We have split into Rich India vs. the Rest of India. Rising prices and rising taxes through a creeping army of levies on fixed deposits, telephone bills, et al, are a perfect tool to crush the thinking middle class so that it cannot raise its head against poor government policies. This is the American way - have a weak middle class tied up in an army of debt instruments needing to be serviced every month, while employers have the right to fire at will (something corporates and their slavish camp followers are keen to bring to India), and you have the Republic (read dictatorship) of the Super Rich industrial and business houses. India’s imitative elite is desperate to shift to the American paradigm, where parents and grandparents will not bequeath us their estates, but their unpaid mortgages!
The author is Editor, www.vijayvaani.com
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