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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NO MORE ‘GIVE IT UP’

In September 2012, it was reduced to just six from a copious, unrestrained flow so far.

Then some months later, some thoughts went into it ‘within a reconsideration mode’ and the number was increased by three, making the cut at nine in a year.

Then came the elections in 2014 and the tally was further upped by another three to make for a comprehensive ‘a dozen for a dozen’ mark.

Now comes January 2016 and another approach is going to be adopted.

According to a government notification issued today, now if you are in income bracket above Rs. 10 Lakh (the taxable sum), you are no longer entitled to avail subsidized LPG cylinders.

Logical and fair.

We can even lower this income threshold to Rs. 7.5 Lakh or Rs. 6 Lakh (the income threshold for OBCs or the ‘Creamy Layer’ threshold – above which OBCs are entitled to get caste based reservation).

Millions in India, its masses, need subsidy and any policy in India can only succeed when it looks at subsidies as ‘social obligations’ and not as ‘unavoidable or necessary evils’.

That means we need a rationalized subsidy policy where the whole emphasis should be on identifying those who really need and those who unnecessarily avail subsidies.

And we need steps like the one taken today – what was voluntary till date doesn’t remain ‘on individual discretion’ anymore.

The exchequer had a subsidy payout of around Rs. 41000 crore in 2014-15. The country can do much better if this subsidy burden is directed at those families in real, dire need.

The government notification also tells the ‘give it up’ initiative failed to live up to expectations. India has around 15 crore LPG connections that itself tells millions of families are still dependent on traditional, alternative sources of energy. They, simply, cannot afford the luxury of LPG connection – something that is considered a basic need today. They need subsidy in real terms. Millions of households with LPG connections need subsidy because they face difficulty in managing their monthly budgets.

But those families that earn some Rs. 50000 a month certainly doesn’t it.

So, the notification today is a logical move and will add up significantly to the lot of around 57 lakh families that have so far ‘given up’ their subsidies voluntarily.

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

DEAR POLITICIANS AND BUREAUCRATS: CAN’T YOU VOLUNTARILY GIVE UP SUBSIDY IN PARLIAMENT CANTEENS?

Well, if Narendra Modi can request his countrymen to do so for LPG cylinders (liquefied petroleum gas cylinders, main cooking fuel in houses where PNG or ‘piped natural gas’ has not reached – or families that can and can somehow afford it), his government can certainly push the fellow members and their officials and officials of the Parliament and the Government to give up the ‘huge subsidy’ – ranging from 60% to over 100% (in some cases, a dish with raw material cost of Rs. 99 is served for Rs. 33) – on food in the Parliament canteens.

Congress has supported the move. Parliamentarians can give it up voluntarily. Or, they can come with a yardstick. Also, it is a popular issue politically – like Arvind Kejriwal successfully cashed the electoral popularity of ‘VIP culture’ in Delhi polls – most members (of Parliament) would be forced to look positive to such measures. Some may oppose the move but their count would not be enough to obstruct a decision to this effect. And if the politicians there support it, we can count the bureaucrats in.

Now, for the point – as told reportedly – that politicians alone cannot be blamed for the practice – well, politicians and well-to-do bureaucrats are to be blamed for it.

On March 27, Narendra Modi had appealed – as the Times of India writes – “People who can afford buying LPG at market rates should give up subsidy on cooking gas. Money we save from giving up LPG subsidy is the money we will use for the poor, so that they have access to clean energy too.”

It is now almost three months to that statement. MPs and bureaucrats could have set a precedent for masses by refusing subsidized food items in the Parliament. Alternatively, they could have come up with a mechanism to fix market price of each item to pay accordingly.

They did not do it. They have not done it. Would they do it now?

It is not for the Rs. 60.7 crore subsidy given to the Parliament canteens in the last five years, as Subhash Chandra Agrawal’s RTI reply reveals. It is a very small amount when we count the overall government expenditure on politicians. It is about the message that such gesture would send to the masses – in times, when we are moving towards a ‘subsidy free’ governance – in times, when economists urge for the ‘pressing need’ to do so – in times, when the government looks convinced to do so.

The prices that have not been revised since December 2010 look ridiculously low. After all, where do we get a ‘masala dosa’ for Rs. 6 or ‘boiled vegetables’ at Rs. 5? And the long ‘ridiculously funny’ list is replete with such examples. And it is not in the canteens of the Parliament. We have other such spots on the ‘subsidy freeway’ where wrong people are enjoying such perks.

Parliament canteens can set a precedent for all such folks. Would our Parliamentarians, bureaucrats and other ‘financially capable’ people relishing such ‘subsidized delicacies’ do so?

Would they voluntarily give up the subsidy on food items in the Parliament canteens beginning with the Monsoon Session that is from July 21?

Would they pay the ‘market prices’ with ‘service tax’ as every Indian is expected to pay (and has to pay) till the issue is fixed?

And since any such move will be ‘self-driven’, ‘altruistic’ and ‘voluntary, it will take care of those ‘who really need subsidized food items’ from the Indian Parliament canteens.

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