The Political Pirate. Review on Ministry Of Finance

Mr. Chidambaram,

I hope you are doing well! …And my hope is a genuine concern because I know you and I and the rest of India won’t be doing too well pretty soon for a long time, thanks to your artless policies and annual budget announcements which are making our life a wee bit too tough inch by inch, creeping over our life, tightening our pockets and turning us, the urban Indian salaried class into a choiceless window shopper!

In May, 2004, when the BJP was overthrown from power and Mr. Manmohan Singh took up the captain’s job, it felt nice. It felt safe having our destiny in the hands of an academic economist with capitalist mindset. But things haven’t turned out so rosy unfortunately! He trusted his naïve Finance Ministry to deliver.

Ø      Mr. C, you started off with the Fringe benefits Tax- Bravo!- you convincingly managed to kill the benefits and incentives package which corporate India would have liked its employees to get, since otherwise, you would tax those poor employees too heavily if it were a part of their compensation package!

Ø      You brought in the Service Tax and VAT regime in India. Will I have to remind you that countries that levy these 2 taxes have very low income taxes. The fundamental reason for implementing Service Tax for services and VAT for goods is that one pays tax only for the goods and services he/she utilizes and unfair tax implication can be avoided on people on don’t utlize a certain amenity. But you know better, you thought the deficit was too high eh… ;)

Ø      A month back, you made Equity available to banks more expensive! So now they have hike Home Loan interest rates to meet their expenses. You thought the Real Estate market was too hot, didn’t you my jittery FM…? Congrats Again- We were doing so well without our Benefits and now we feel like kings and queens now that we can no more afford a house, courtesy you of course!

Ø      And, we know the idea you have been fiddling with off late, throwing discreet hints via media- YOU ARE GONNA SCRAP TAX EXEMPTIONS!!! And what a silly excuse you gave for this one- It’s too complicated to calculate tax with so many exemptions in place….well, well...

Long Live Corporate India!- Now we are not only homeless and benefits-less, and pay almost 40% tax ( don’t forget the ST and VAT you pay on every transaction ), we have even lost our only choice to save money!

India is doing well these days, a growth rate of 8%+ is good enough and I seriously believe it’s not overheated. People are beginning to prosper in its literal sense- We have more people buying houses, cars and going to Pattaya and Mauritius for vacations. And they are doing it with their hard earned money! Why should our government (whose real job by the way is to serve us and look after our welfare) try to curb economic and social growth? Why can’t we get out of our socialist mindset and let people manage their own money? Why, in spite of being one of the highest tax paying citizens in the whole world, should we still not be allowed to get benefits or buy a reasonably priced apartment or save money?

India’s trade deficit is high and loans need to be repaid and we need money for that. But the loans that have been taken over the last 50 years don’t need to be repaid in the next 5 years at the whims of our dear Finance Minister, at the expense of the current earning population. That’s not only silly, it’s ironical and shows our current government has a very naïve vision and foresight!

I have been struggling to understand why there is no revolt against this government! Don’t get me wrong, I am not an extremist but if we had put-up a united front against Reservations at IIMs and AIMS (which although didn’t help much in face of crooked and mean politicians), we should challenge these policy changes made by the Finance Minister at his own royal discretion time and again

We live in a free country. It’s our right to work hard and earn money. We do understand the government needs money to build, maintain and operate the country and we are willing to shell out a reasonable amount every month for this fund. That amount that the FM likes to call Tax. The government needs to work efficiently to plan and implement all projects- Infrastructure, healthcare, education, rural development etc with this fund. But there is corruption and out of every INR 1.00 that I pay as tax, only about 15 Paise trickles down finally for any welfare initiative. The problem here is corruption. So if the country’s bosses are corrupt and they eat away the money that I “donate” for the country’s welfare, then is it a sensible idea to increase taxes (and so that they eat even more?) and handicap us from saving and investing or is it better to kill corruption (which if not practical is definitely controllable)??

Points to ponder for our esteemed Finance Minister!

My lost regards for you,

Me