Kudos to the real estate lobby, they not only forced the government to change their decision and reinstate indexation benefits to calculate capital gains, but forced them to do it in record time. Don’t think there was any pressure on the government by its coalition partners, but one thing is evident, if there is enough noise and demand from the citizens, the government will have no choice but to listen and change its decision.
This time the reaction to some of the tax proposals announced in the budget created so much anger on social media that it still refuses to die down even though the last date of filing of returns is long gone. To make matters worse for the government, the tax announcements coincided with the crumbling infrastructure, making people wonder whether their tax money was serving any purpose. Unfortunately, the mainstream media chose to remain behind the curve in making tax terrorism a big issue. If this situation persists, social media, although highly disorganised and stressful might just overtake and become the main go-to source for news in the country.
Taking back a decision announced in the parliament, just because the people did not like it, will definitely hit hard to the government’s inflated ego, but they seem to have managed to quell the noise so that the contagion does not spread to other taxpayers. That said, the tax debate is not going away soon and already there are feeble noises being made by the salaried class, who seem to be slowly working out the math of the amount of tax they are forced to pay on their income, big ticket or even their tiniest expenditures, and then comparing all that with what they receive in return from the country.
The problem with the salaried class is that they usually fail to be persistent in their demands; they make the initial noise on social media during the weekend and then get busy with their office routine the next week, not realising that out of the 12 months they work, 3 or 4 months of their income goes into financing the government depending on their tax slab. A stubborn inflation with never ending tax proposals is testing the patience of the salaried class though, so it’s just a matter of time this escalates into a major debate. You cannot extort just one group of people, while the rest get away and some only pay peanuts.
This is precisely the reason personal income tax needs to be abolished so that tax collection becomes more transparent, easy and fair to all citizens. What is the use if the tax system fails to capture the real income of a Dolly Chaiwala just because he sells chai in cash, and probably pays tax only on his social media income? Actually the reason for his success can be fully attributed to his handling his revenue in cash and hardly allows any interference from the tax department in his business. You see, people can do wonders once they are out of the clutches of the tax authorities because it allows them to work with tremendous freedom. Imagine giving the same freedom to the salaried class, they will end up being more creative, productive and even richer. The opposition was wrong in saying that this government is the ‘suit boot ki sarkaar’, it is not.
Talking of opposition, why have they chosen to largely remain silent on the tax terror issue, they made some sporadic noise on indexation and see the results, but largely have been quiet on the matter. What is stopping them from announcing that they will abolish income tax if elected? That should be a good enough decision to turn the tables and put the government on the defence. But nobody wants to forgo easy income taken from timid taxpayers unwilling to even protest to protect their income. Try taxing the farmers and they galvanise themselves, protest and show the government their place.
Also by targeting the poor Finance Minister most taxpayers are venting their anger on absolutely the wrong person. It is folly to think that all decisions taken by the finance ministry are taken independently by her. Poor lady has been on the line of fire and it is only natural she is going to lose it sometimes and vent her frustration on the people. She has come across as someone who has created the tax mess. Please don’t be under the impression that she has that much power to independently decide.
Therefore the real decisions in democracy should be ideally taken by the citizens of the country. Understood that we elect politicians and allow them to make decisions, but that are mostly administrative in nature. The big decisions of the country have to be made by taking the people into confidence before they are made and not the other way around. The budget need not be some suspense movie where we applaud or jeer on a decision that was kept under wraps and not allowed a proper debate to understand the pros and cons.
For example, the government had to forcibly take back the indexation decision, because there was no mention anywhere in the public domain that such a proposal is in the works. If the decision was explained to the people that the government is basically worried of the real estate bubble and would like to prick it then the people would understand their point. Unfortunately while at it they also tried to fill their coffers, which is the most horrible way to bring real estate prices down. Every decision made in the interest of the people cannot be resolved by only tax and more tax. Corruption is the main reason for high real estate, how about getting that down. It is high time we inverse the decision making process of the country by bringing in a bottom up approach.
(The author is a business consultant)
