Cess in the tax cesspool – Sandhya Jain

Sandhya JainGovernment 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 tax-payer expense want clear roads. – Sandhya Jain

The morally-challenged UPA Government, 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 jeopardise 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 instalments are made for a fixed number of years, Rs 155 has been levied on every instalment 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 a day (one litre of milk plus one banana, till the next price rise), is pushing for a green tax of Rs 2 per litre on petrol, along with a three per cent cess on vehicle cost to be clubbed with the insurance policy. This principle of polluter pays is being invoked to discourage ‘indiscriminate use’ of private vehicles.

Indian middle classIn 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 tax-payer 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 subsidising them with land and other facilities at tax-payer 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?

We must revisit the concept of liberalisation-privatisation-globalisation. Originally, liberalisation was intended to liberate the private sector from the licence-permit-quota raj and its inspectors. It never meant a shift from a mixed economy to a crony capitalist economy where politicians and bureaucrats would conspire to sell off profit-making public sector units along with their real estate to chosen business houses. The idea was not to sell sovereign natural wealth like coal, iron ore, gold or gas, to greedy corporates (Indian and/or foreign) without reference to issues like sustainable extraction, environmental balance and rights of local populations.

It did not mean outsourcing of state responsibilities like power generation when the private sector has consistently failed to meet allotted output in three successive Plans. In Delhi, instead of enabling DESU to crack down on power thefts and modernise equipment, the State Government brought in private companies as costly middlemen to distribute power from state utilities like NTPC and DVC, thereby tripling citizens’ bills. Currently, the Delhi Cabinet is split over the Chief Minister’s determination to give a bailout package to these discoms.

The Chief Minister of Delhi is also keen to privatise the city’s water supply. If she can’t even manage water after making a mess of public transport and giving us the stench of the Commonwealth Games, she should make way for someone who can. Merely misusing power to enhance property circle rates by 350 per cent in a single year does not mean we have a better city; it only throws the middle-class out of the market. The Union Government must realise that Delhi’s experiment with Statehood has failed, revert to the old Chief Executive Councillor system, and concentrate on proper administration of the city. After trifurcation of the Municipal Corporation, the NDMC should be re-united with MCD as a fourth unit, given due share of State taxes, and all parts of the city governed equally without bias.

As for the original idea of globalisation, 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 public sector units like Coal India were disfavoured as foreign multi-nationals 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 the entry of FDI in airlines while the public carrier was denied profitable routes for the sake of some blue-eyed entrepreneurs.

We have split into ‘Rich India’ versus the ‘Rest of India’. Rising prices and rising taxes through a creeping army of levies on fixed deposits, telephone bills, etc, are together 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 Pioneer, New Delhi, Dec. 19, 2011

One Response

  1. This is why, I have been crying against this UPA GOI. Until you remove the cause, there is no point in treating the symptoms. This UPA GOI is the most insensitive enterprise the people of India are suffering. Problem is that India is a very heterogeneous society with their interests in far away regions. Most of them, if not all, have actually subvertive intentions. That where the people in India cannot understand due to multiple factors. No political leader is interested in it because they feel that it will be a threat to their vote bank.

    Hence the more illiterate, ill informed the people are, the more their political fortunes are assured. A shameful state of affairs but true. That is why, I am in favour of a very strong Lokpal Bill but the corrupt UPA will do its best to scuttle it as long and as much as they can. I shall sit for hunger strike or go to jail at the call of Anna for the sake of saving this nation. God bless


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