As any other typical middle class worker, I was keen to know if Chidambaram has any mercy to show upon me. I listened to his budget speech for that one much needed break from suffocation – increase in tax threshold. However, what I heard Chidambaram say on 28th Feb 2013, shocked me.
Listen to what he said during his speech [@7:19]:
Just to put it in perspective:
124. In a constrained economy, there is little room to raise tax rates or large amounts of additional tax revenues. Equally, there is little room to give away tax revenues or the tax base. It is a time for prudence, restraint and patience.
125. The rates of personal income tax have survived four Finance Ministers and four Governments. The current slabs were introduced only last year. Hence, I am afraid, there is no case to revise either the slabs or the rates. Besides, even a moderate increase in the level of threshold exemption will mean that hundreds of thousands of tax payers will go out of the tax net and the tax base will be severely eroded. Nevertheless, I am inclined to give some relief to the tax payers in the first bracket of Rs.2 lakh to Rs.5 lakh. Assuming an inflation rate of 10 percent and a notional rise in the threshold exemption from Rs.2,00,000 to Rs.2,20,000, I propose to provide a tax credit of Rs.2,000 to every person who has a total income upto Rs.5 lakh. 1.8 crore tax payers are expected to benefit to the value of Rs.3,600 crore. [Emphasis Mine]
Read that statement again:
Even a moderate increase in the level of threshold exemption will mean that hundreds of thousands of tax payers will go out of the tax net
Doesn’t that clarify the intentions of this government? They hate it when people earn. They tax us, for what? May be in another country, they tax people to deliver some services which would be too costly for any one person or organization to provide. But in India, they tax so that you do not escape tax net. Despite the fact that Government in India does not add any value whatsoever in the process of creating any product that solves a given problem for the manufacturer’s customers, hardworking people are supposed to be taxed and they are not supposed to escape the tax net.
To top it all, Chidambaram offers a consolation of Rs 2000 tax credit to those who earn between rupees 2 Lakh and rupees 5 Lakh. What do we call this? Financial jiggery-pockery?