The curse of being middle class and the need for a federal system in India

The middle class in India are the ones who are rudely affected by any activity happening in the country may it be the new budgets, financial meltdown, tax policies or any strike called by any party headed by some gigolo.

Broadly, let us split the billion population of our country into three categories. The catgories are Poor, Middle class and Rich. We are gonna discuss about the poor and middle class here in this writing. Any movement in the country, whether positive or negative impacts these two classes of people. The tax systems of this country is very rude n these two categories of people and that is the reason why these categories keep on expanding in terms of numbers and people find it practically impossible to move up the ladder. They are forced to remain in the so called poor and middle class bracket for ever without being able to fulfill their quest to be rich and to be in a rich man’s world and lead a rich man’s life.

The government and the policies of the government in India squeezes the life out of the poor and middle class leaving them gasping for breath of survival in all contexts. The tax policies are framed in such a manner that the lion’s share of the income of these two classes are captured back by the government. In addition to Income tax, there is professional tax, numerous cess tax charges, service charges, VAT, user fees. My question is why is it that all these taxes are not computed as a direct proportionate figure to the income? Why is it that only the income tax is computed and linked to the income of the individual? The same individual is bearing the brunt of all the other bloody category of taxes and why is it that that is not considered in his favor? This is hypocrisy and sheer legislative arrogance.

Take for example a petrol hike in the country. The impact of this falls heavily on the middle class and the poor classes. The rich do not have to worry about these as the tax laws for them are different and they are not taxed as heavily as the middle class or the salaried class. What do I mean when I say that te tax laws are different for the rich? I shall explain that.

If you consider the rich class, most of their source of income comes from business or overseas. The tax for these incomes are not deducted at source unlike the salaried class in India. The exemptions that the government gives for the business class gives them much flexibility to reduce the tax paid by them. Also, the laws in this country have more loop holes than closed loops thereby giving all options to the rich class to evade tax. This is what I call as legislative double standards. Who said India is a socialistic country?

In this context, let us also talk about the need for a centralized federal system for India. A federal system that provides a common and uniform civil code in India is something that should have come into place in this country long back itself. I think it may not have come to place because of the poor education quotient of the people ruling this country. I refer to the legislature, bureaucracy and judiciary along with the fourth estate for not discussing this and making this a reality.

If we have a federal system in this country and remove this concept of TDS, what happens is that each expenditure and investment of everyone can be tracked and accounted centrally. This results in the direct linkage of expenditure and investment to the income thereby eliminating the scope of tax evasion. Such a system is never gonna come in this country because if it comes, the tax system becomes transparent and hence the rich cannot evade taxes. So the usual process is bound to follow. The rich will bribe the politicians and ministers and they in turn will shove this idea under the carpet, leaving the middle class and poor class to suffer and lead a down trodden life.

Take for example a strike that affects the transportation in the country. The people affected the most are the ones who rely on the government mode of transport. The rich ones can stay at home during this period and nothing is gonna to impact them. However if the common man fails to go to work for a day, he is destined to suffer loss due to this. Also something that we should understand is that during such a crisis, the government does not provide any support to the common man except for some stinking support statements issued by some political bastards.

It is good to create a mood for investment in the country and to increase the investment in the country. However in India, the people are forced to either invest or give the money as charity to the government. If the people are in a state of crisis, where they need more liquidity, who will support them?