Mobilenew24x7 Bureau
A lot is being read into the announcements by the Central government on the budget and both panic and pain has got a mix of all beforehand. Is it for the poor or for the rich is also agitating the common section.
Going through several analysis and reports a feel emerges that, good that the Centre announced lowering of surcharges on the top rich, mainly on those wrecking an earning Rs 5 crore or may be more. And surprisingly the effective tax slid down to 39%.
Further, in view of the high rate on the inequality that is rising between the ultra-rich and the middle, low income class, and the high rate of government borrowing, one has to ask the question: Why has the Modi Government continued to focus its fiscal policy in a year before the election, towards the ‘pro-corporate’, ‘super rich’ elite?
Given that most pro-business and pro-corporate measures haven’t yielded positive growth or investment gains in the last few years. And for those wondering whether being ‘pro-corporate’ in tax policy works to a government’s advantage, some context here might help. Corporate tax cuts, in a broader sense, provide a sugar-rush to an economy. Investors feel happy, albeit more temporally in the short term, buying more stocks, which puts a smile on the faces of stock traders and India’s financial markets. Others will invest majorly in greater capital-intensive modes of production, which may drive nominal growth rates for a period, but hardly do much to boost employment or create higher wage-paying opportunities.
A bigger question is, would It also give a much-needed fiscal space for the low-income class to save-spend more on discretion, given how much this income group has struggled through subsequent cycles of high inflation and pandemic-induced misery.
