When Manmohan Singh was elected Prime Minister of India, I was pleased. When he appointed Chidambaram as his Finance Minister, I was elated. I even blogged about it on this site, in a post entitled “New, Improved India”.
So, it was a bit disappointing to read that, in the Union Budget 2005-06, Chidambaram has proposed a tax on withdrawals of over Rs. 10,000 from bank accounts.
After all, it was my money, and I was going to be taxed for withdrawing it from my own account! The official story was that it was to curb black money transactions in the economy. I could not fathom why black money launderers would use legitimate bank accounts for their transactions. But I told myself : He’s a learned economist. He knows what he’s doing.
It was a bit disappointing to learn that just 2% of India’s population pays taxes.
And, many of the provisions available to the middle-class taxpayer by way of rebates and deductions until this year, have now been removed. But I told myself : He’s a learned economist. He knows what he’s doing.
But, I could not understand it any more when I learned that Mercedes lowers its prices by Rs. 100,000 :
DaimlerChrysler India on Tuesday announced an up to Rs 1 lakh reduction in the prices of its premium sedans — C-class, E-class and S-class — citing cost benefits from the 5% cut in customs duty announced in the Budget.
We are country with over 1 billion people. Hundreds of millions of us are uneducated and live ‘below-the-poverty-line’ in apalling conditions. An equally significant chunk is the burgeoning Middle Class – forming the bulk of the 2% who pay all the taxes that fuel the nation.
This ‘Middle Class’ is rewarded for its honesty and hard work by increasing tax burdens in every aspect of life. While our politicians abuse public spending at will, and many rich industrialists and businessmen go scot-free without any tax liability whatsoever, our honourable (Harvard-educated) Finance minister has decided to tax cash withdrawals from an ATM, but make it easier to buy a Benz!
I can’t help but wonder: Do we really need a cheaper Merc?