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Medieval India folk tales remind us
about the impact of the good governance process called tax
collection. King's soldiers should be as silent as a bee
collecting honey from the flower and should not disturb and hurt
the public was the ancient India Governance message.
Today the
silent impact of indirect taxes, high prices and micro finance
loans together leads farmers and consumers towards suicides.
Nation has to carry forward the choice less baggage of lakhs of
farmers suicide. It is a matter of common sense that due to
unpredictable market it is difficult for a farmer rather in
comparison to a city entrepreneur to pay back his loan without
market support for his capacity.
Recently, TV channels displayed a
city labour's hand chopped off as he was unable to pay a loan of
Rs.300/- to the local lender. In ancient days, a loan seeker used
to avail the opportunity of advance money called loan by producing
more wealth in a period of time and then used to return the loan
safely. Today government takes loan from the Public savings- with
a business sense to utilise this money in making more money, more
production, more jobs faster then the interest amount.
It is a
well accepted norm to talk of fiscal deficit as the gap between
the income and future expenses of the nation. The fiscal deficit
as pointed by few MPs in this year budget has been shown at about Rs. 5,22,000 crore while the tax revenues waved off or gifted as
concession by the government stands around a whopping Rs.5,30,000
crore. It appears even the Government is forced to take loan
without daring to say no to the Corporate concessions gifted as
incentives. Figures shown there could have been a loan free
surplus of Rs.800 crore if taxes were to be collected honestly.
Strangely ignoring the familiar Indian references to Kautilya's
Arthashastra, the finance minister, in his budget speech, quoted
from the Shakespeare's Hamlet."I must be cruel only to be
kind"-This Shakespeare quote from ancient European culture is
perhaps picked up by FM to motivate the majority in India. To
prepare middle class and poor for more sacrifices. Market survival
is simple. One shinning-other suffering. It can never deliver the
win-win for all. When someone is spending, someone else is
gaining. In modern India with indirect `hidden` taxes we find a
new way to guide India's economy tax collection. Since majority
have a hand to mouth income the possibility to use direct income
tax to squeeze them does not arise. Indirect taxes carefully
packed in each and every industrial and agriculture produce helps
the law makers to hide behind the retailer and producer of goods
and services.
Direct Tax collection is unpopular as four crore
privileged tax payers in 120 crore largest democracy are expected
to use concessions to generate more production and improve the
GNP. Here the trick is that corporate rich are interested to give
a false bubble growth by not investing in real production but by
pumping money in share bazaar ensuring jobless growth. Government
continues to give concessions to direct taxes and justify
favouring the rich at the cost of the poor. 69 billionaires have
an asset value equivalent to one-third of our GDP, while out of
the rest of the 121 crore Indians, over 80 crore struggle to
survive on less than Rs.22 a day.
In the past Tax system was simple. Direct taxes at the rate of
around 6% in shape of crop was collected and deposited in the
temple ware houses. Indirect taxes hidden in the cost of goods as
seen today in the industrial/agriculture output was missing. If
the tax payers in ancient times resisted they were expected to
stop the King`s horse a part of revenue generation politics packed
with religious label ritual called Ashva Megha Yaga. If the rain
gods were kind enough then the recovery of the tax was cent
percent. In a Governance system which survives on city-slum,
town-village and Bharat-India divide let us see the impact of
Budget-2012-13.
Majority fails to understand the difference of ten times in the
direct-indirect taxes direction and recovery. While direct tax
collection is pegged at Rs 4,500 crore, indirect taxes would raise
Rs 45,940 crores in the current year budget. You need not be a
student of Economics to see that indirect taxes are a huge burden
on the people, while the low direct tax rates were a relief for
the rich. Common Man calculates the risk in survival with his
decreasing hard work value vis-à-vis his standard of living. In
India when the price rises every month it hurts 99% as the money
in the pocket as earnings do not match and remain freezed. With no
sale of goods in the market, no wage security, no job security and
no social security the market recession stands teasing.
Terms like fiscal deficit and subsidy used by policy makers to
calibrate and audit the budget do not make sense to majority
people who are engaged day and night to earn a better standard of
living. The helpless government is trying to hide the dirty
poverty picture. Its false claims of decreasing poverty by
lowering the Below Poverty Line limit is shameful. What the policy
makers forget is that the financial crisis can only be saved by
raising the standard of living. Better purchasing power of the
people as market crisis `savers` is the only way out.
Policies in past were made as complimentary to environment and
ecology. No feudal king in the past had ever dared to sell forest,
ordinary well/stream water or river water including our holy Ganga.
Silence of ancient tax collection is compared with the Sun
silently converting the water to vapour but the rain clouds with
thunder and rain supporting greenery must show that the money
taken as tax is put back to the public welfare in the cycle
controlled by Rich-poor divide with the participation of the
people.
Today the discussion is how and why to reduce the
fertilizer and diesel subsidy. Much energy is invested to redefine
the BPL India to save the Politicians from the shame. The
government considers concessions for the rich as an incentive for
growth while subsidies for the poor is seen as being negative for
growth as it hardly reaches the needs and the system of
distribution has many leakages. The petroleum pricing policy is
also skewed. The government calculates the prices of petroleum
products on the basis of international prices of crude oil. But
the fact is imported crude is refined in India and pricing should
be based on domestic component inputs.
Why Pranab Da choose to include Hamlet reference in his Budget
Presentation ?A tempest in every home: Pranab plays it safe by
putting more emphasis on Euro Crisis and more salary cuts and
pensions in Europe. In subsequent media interviews the FM was
quick to score by saying we are still better then Europe Crisis.
Hamlet the prince of Denmark The Tempest ... In his first
soliloquy, Hamlet explains that he does not like his mother
marrying the next King of Denmark so quickly within a month. It is
unfortunate that the helpless Finance Minister is committed like
in marriage to protect the interests of few rich corporate and
shift the blame to compulsory collaborations of the government
with allies.
Opposition and the Left was bitter in the Budget
critique by demanding, ”Why rob the poor to pay more to rich.”
14 Lakh of industrial and agriculture workers and TUs which went on
strike gave the FM their suggestions which were not mentioned in
the Budget lay out. Budget fails to see that fall in wages of
workers both organised and unorganized engaged in production
investments which means less purchasing power in the pockets of
millions.
PM says the finance minister had to bite the bullet, but it seems
he has bought the used empty bullets and is unable to learn from
the Euro crisis.
This article was
written on 22, March, 2012 and is published by Governance Now on
23, March, 2012. The author blogs on http://rakeshmanchanda.wordpress.com
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