The middle class, flaunted by the government as the backbone of the Indian economy, considered to be the fourth largest in the world in terms of Purchasing Power Parity (PPP) is under siege. The siege is laid by none other than the Left-backed UPA Government. After Human Resource Development Minister Arjun Singh made a political move of his lifetime to cut into the seats for the so-called upper caste, middle class in university and professional collges, it was the turn of Finance Minister P. Chidambaram. It seems Finance Minister is constantly fed on an idea that the entire middle class, estimated at 300 million, is out to evade taxes. This class, the Central Board of Direct Taxes (CBDT), has decided should not get away with a ?Saral? type of Income Tax Returns. They must, file all the details of not only their income ( whatever they get after tax is deducted at source) but also of the expenses. The moment you file a return and show something as expense, you may be summoned by the Income Tax Officer to verify with adequate proof. Next time you take your family out on a holiday, make sure all the hotel expenses, travel expenses and even food vouchers are kept safe. You never know when you need them or else you may have to pay tax as also the penal tax. Whenever, the spin?doctors of the Indian economy need to reel out some figures relating to the much-touted India story, they would talk about one million passenger cars produced and most of them sold in the country. No matter if 90 per cent of these cars owned by the middle class are financed by banks cutting into the net disposable income of an average city family. It also means that these people need to spend a minimum of Rs 5,000 to 7,000 on their petrol bill besides paying their Equated Monthly Installment. Or else, travel in the wretched blue-line buses run by government-supported mafia.
This bill, so thought the government after the Assembly elections of course, needed to go up because if the crude prices had shot up worldwide, it is not the problem of the Centre and the State Governments which impose as much taxes and levies on the fuel as its production and processing cost.
After the latest hike, petrol is selling at almost Rs 54 a litre in Mumbai and close to Rs 50 a litre in Delhi. Well, the middle class does not have much of a choice. Spend Rs 1000 to Rs 2000 more only on this count and watch the drama of not only the Left parties but also of the Congress on television channels making demand for a roll-back on prices.
The government has the industry chambers to support its move on raising the pump price of the petroleum products. The chambers like the CII, Assocham and FICCI all reacted in a chorus welcoming the revision. They in fact, are putting pressure on the government not to spare kerosene and LPG. They keep reminding the government about the recommendations of the Rangarajan Committee, which has suggested an increase of Rs 150 per LPG cylinder. However, they conveniently forget that the cascading impact the petrol cost would have on the overall inflation rate as also the interest rates. The interest rates are not decided unilaterally by the Reserve Bank of India but the Federal Reserve of the US. The rates all over the world are looking up and they would go up further in India. Would the industry welcome it? No, they would then go around lobbying with the government asking for a reduction in the rates of the small saving schemes like the National Saving Certificates and the Monthly Income Schemes in Post Office, on which the senior citizens depend for their day-to-day expenses.
The latest from the Finance Minister is that there should be a TDS on the Post Schemes for senior citizens something like 10 per cent. To say the least, it is confiscatory tax, which the UPA Government has started collecting through Post Masters.
The trouble for the middle class is that none of the mainline political parties is bothered about them. According to political parties, this class does not have vote banks and they do not even go to the poll centres. Why bother about them! One thing each of these parties forget conveniently. Middle class people are opinion leaders and the opinion can trickle down fast enough to uproot a government.