INDIA CAN’T DO WITHOUT SUBSIDIES – AND IT WANTS TO TAX PROVIDENT FUND!

We are a nation where the urban poverty line is Rs. 47 a day while we think that the rural folks can survive at Rs. 32 a day and we arrived at this wisdom in 2014. When we had done so, we had graduated from the poverty lines of Rs. 27 in rural areas and Rs. 33 in urban areas. This is when you can’t arrange even a modest one time meal in Rs. 32.

This directly says the proportion of real poor, in qualitative terms, based on the average living conditions today, would be much higher that the projected figure of around 30% or less. When you go assessing this poverty mess keeping in mind ‘what should be and what is’, you see this is another equal India within India (or Bharat of the perennial India Vs Bharat debate).

Some 75% of Indians are without any health insurance cover. Majority cannot afford medicines for a sustained treatment regime, let alone the costly surgical processes. The attitude of doctors and support staff in the government run hospitals is even worse than scavengers. Finding good people there tougher than even finding God. People who can afford and can access, try to ignore the government run health facilities. And it across India including the metro cities.

Officially, India’s literacy rate is around 75%. But again, if we see qualitatively, it is the same old story of an equal sized Bharat within India. Our primary school system is languishing with deep holes and leakage in the ambitious Universal Elementary Education programme. Our higher education probably produces the maximum proportion of inept professionals and higher education graduates.

Our economy is consistently witnessing a falling gross savings to GDP ratio – from 34.6% in 2011-12 – to – 31.3% in 2015-16. One way to look at it would that people don’t have wealth in that proportion to save – something that is, naturally, very random and without substance. Or it means people are saving less.

But that doesn’t mean the government should use to a stick to discipline people – like the proponents of the EPF tax proposal including Finance Minister Arun Jaitely said – as a report the Economic Times put forward – “The government had justified the move by saying that it was meant to steer private sector employees towards a pensioned retirement by discouraging lump sum withdrawals, especially for, as experience suggests, conspicuous consumption.”

The finger is being pointed at it rightly – that who is the government to discipline us with our personal preference. Yes, it is good for us when we save more – but then, on a macro scale, it is good for the nation’s economic health as well. But, in the name of that, taxing a man’s life’s savings can never be justified especially when you give people dreams save taxes and build a corpus by investing in the Provident Fund scheme.

And from where this thought of ‘disciplining’ the salaried taxpayer came? When you have such ridiculous poverty lines, when you have millions poor to feed, when you have millions poor to heal, when you have millions poor to educate?

India and Bharat cannot become synonymous until we address these existential questions. Subsidy is now addressed as a ‘burden’ in the lingo being used by the economists but this ‘burden’ is lifeline for India’s millions poor who find it hard even to earn Rs. 47 or Rs. 32 a day.

The government is duty-bound to serve them first – with honesty – with integrity – with consistency. Taxing the middle class with another ‘tax burden’ would not serve any purpose here.

©/IPR: Santosh Chaubey – https://santoshchaubey.wordpress.com/

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