--- The Incognito Subsidy Scam
In the Rajya Sabha, Finance Minister Arun Jaitley today said Tax exemptions and incentives to corporates have resulted in a revenue impact of Rs 62,398.6 crore to the exchequer in 2014-15, 8 per cent higher than the previous fiscal.
This does not come as a surprise because it is the very nature of The State to provide overt tax & covert privilege to those it wants to reward, and provide covert tax & overt privilege to those it intends to cheat. In India the elite is overtly taxed & covertly privileged (income tax v/s subsidized gas, energy, indirect tax structures) whereas the poor are overtly privileged & covertly taxed (various subsidies, schemes, NREGA, v/s everyday consumables are heavily taxed).
There are two classes of people in the Indian Economy :- 1) The villager, proletariat, manufacturer of basics, below poverty line. 2) The urban, intellectual, elite, industrialist, above poverty line. We need an economic policy which encourages the former even if it is partially adverse towards the latter. Unfortunately, our economic policies are encouraging the latter more than the former.
The result of this policy is that economic disparity has grown rapidly. Rich have grown rapidly and poor have grown slowly. This disparity is incessantly increasing. The statistics of the Indian development reflects that 33% of the proletariat have grown at 1% and the elite 33% have grown at 17%. The government proclaims the mean growth rate at 9%.
This increasing economic disparity is the reason behind public discontent. The solution to this vicious cycle is to reverse this trend by taxing energy heavily and freeing consumables from tax vice because it is a misconception that cities pay more tax than villages. 70% of India is rural dweller and their everyday consumables are taxed.
