Jaitley’s Robin Hood Act in Budget 2017 May Not Fix Accountability

Claiming a high moral ground on the basis of demonetisation without fixing accountability won’t help Modi, Jaitley.

India’s annual budget for 2017-18 takes forward the government’s crusade against black money, a process that was sought to be elevated to a new level by the demonetisation exercise in November, though there is increasing evidence now that it was a needless measure that caused distress to many. Finance Minister Arun Jaitley’s fourth budget has underlined the resolve of the government to continue the crackdown on the evil tax evaders amongst us.

Also Read: Budget 2017: Modi & Jaitley’s Timely Prescription for the Economy

Moral High Ground After Demonetisation

Many have peacefully co-existed for years in the form of traders and shopkeepers, but perhaps not contributed to the exchequer as much as they should, by tinkering with their books and running their businesses mostly in cash. Jaitley has announced that high value cash transactions are going to be penalised while there has been an attempt to broaden the tax base.

Jaitley as well as Prime Minister Narendra Modi have exhorted at various forums that those evading taxes will not be spared, cocksure that this is the kind of moral high ground that obviously cannot be countered.

While the digital cashless direction towards which Modi and Jaitley want the Indian economy to progress may indeed be unquestionable, the government seems to be getting carried away by its sanctimonious and self-righteous position, in a clever attempt to buttress the politically-expedient image as the do-gooder and protector of the poor.

Also Read: Budget 2017: After DEMON-etisation Damage, Allowing Time to Heal

Jaitley’s Robin Hood Act

In Jaitley’s budget, humongous amounts continue to be pumped into leaky and suspect rural employment programmes such as MGNREGA. There is a direct tax benefit for the salaried chaprasis belonging to the lowest echelons of the government hierarchy and are notorious as the most lethargic in executing their duties.

The small and medium enterprises, that survive on thin margins, have perhaps been rightly awarded with some tax relief. High agriculture income earners continue to be a category no FM will ever dare to touch.

At the same time, Jaitley has sought to highlight the government’s self-created Robin Hood portrait of crusading against the rich, whether salaried or corporate majors. It is this class that would be paying taxes between 30 to 35 percent, apart from the innumerable cesses that have been added over the years. Rahul Gandhi’s attacks on the government are mostly dismissed as inane and silly. However, name-calling the Modi government as suit boot ki sarkar seems to have pinched somewhere.

Burden of Taxes

In the guise of “equity”, Jaitley has slapped an unreasonable 10 percent surcharge on those earning salaries between Rs 50 lakh to Rs 1 crore. The extra money does not add much to the government kitty, but severely penalises a small section of hardworking corporate executives.

The salaried, as has been emphasised, are the ones burdened by tax as they have the least flexibility to play around with the money they earn, unlike, say, self-employed professionals such as doctors or lawyers. While it is noble that Jaitley wants our society to be equitable, the fact remains that in this country, progress has for long been defined as the ability to escape the tyranny of abysmal government agencies and services. It is an aspiration that is shared by both the poor and rich.

This plays out within households in various ways as incomes increase, including the movement from government to private hospitals or schools, purchasing bikes and cars instead of using unreliable public transport, hiring touts to get the job done, whether it is to procure a driving license or registering a property or paying an expensive CA to handle the overzealous tax department.

Fixing Accountability

As the government fails to deliver in more and more areas, those that earn more pay even more for some of the basic amenities that are taken for granted in most civilised countries. The expenses include back-up generators and inverters for power, expensive higher education for kids overseas and even holidays in Europe, America, south east Asia to escape the mess our cities have become.

A couple of decades back, left with no choice, thousands headed overseas to improve their lot in what was termed as brain drain.

Modi and Jaitley’s zeal to cleanse the country of tax evaders may have a well meaning, but has conveniently overlooked that any government needs to deliver and be accountable as well. While there will always be the black sheep, holistic tax compliance cannot succeed unless it fulfils a selfish expectation that my hard-earned money is being well utilised for a personal and larger benefit.

Taxes, after all, involve a quid pro quo. Indeed, good governance necessarily involves honest attempts to create an ecosystem where the poor and rich can be equal stakeholders in overlapping arenas of public goods, whether it is parks, hospitals or schools. This obviously is the tougher and difficult route to take. As things stand, unfortunately, the government delivery mechanisms do not inspire much, apart from the services of our dedicated armed forces that protect our borders and selflessly conduct rescue and rehabilitation operations when needed. And, this has nothing to do with Modi and Jaitley.

(Siddharth Srivastava is a Gurgaon-based journalist and author of two novels ‘Blogging the 40s’ and ‘An Offbeat Story’. He can be reached @SiddharthWriter. This is a personal blog and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)

Also Read: Budget 2017: ‘Ardh Satya’ About Lack of Jobs & Tax Collection