Dangers of Rahul Gandhi’s minimum income scheme

There is a saying in Hindi, “Kaam ka na kaaj ka, Dushman anaaj ka” which is a taunt to those people who want to be fed without having done any work. Today Rahul Gandhi, the President of the Congress Party and PM candidate(?) of UPA said that he would alleviate poverty by giving Rs.72,000 p.a to 20% of the people of Bharat. If ever Bharat had the misfortune of having the Congress come to power, we can be assured that this one scheme is enough to send our country back by 20 years atleast within the next 5 years. Why? How? Do read…

Margaret Thatcher had once said, “The problem with Socialism is that you eventually run out of other people’s money.” To finance Rahul Gandhi’s fanciful scheme the money has to come from somewhere. And we all know that the Government gets its funds from Taxes. As per CBDT press release:

• There was a growth of more than 80% in the number of returns filed in the last four financial years from 3.79 crore in FY 2013-14 (base year) to 6.85 crore in FY 2017-18.
• Number of persons filing return of income has also increased by about 65% during this period from 3.31 crore in FY 2013-14 to 5.44 crore in FY 2017-18.
• For AY 2014-15, corresponding to FY 2013-14 (base year), the return filers had declared gross total income of Rs.26.92 lakh crore, which has increased by 67%to Rs.44.88 lakh crore for AY 2017-18, showing higher level of compliance resulting from various legislative and administrative measures taken by the Government, including effective enforcement measures against tax evasion.
• While 88,649 taxpayers disclosed income above Rs. 1 crore in AY 2014-15, the figure was 1,40,139 for AY 2017-18 (growth of about 60%). Similarly, the number of individual taxpayersdisclosing income above Rs. 1 crore increased during the period under reference from 48,416 to 81,344, which translates into a growth of 68%.
• The average tax paid by corporate taxpayershas increased from Rs.32.28 lakh in AY 2014-15 to Rs.49.95 lakh in AY 2017-18 (growth of 55%). There is also an increase of 26% in the average tax paid by individual taxpayers from Rs.46,377/- in AY 2014-15 to Rs.58,576/- in AY 2017-18.
• There has also been a growth of 19%in the number of non-salaried individual taxpayers from 1.95 crore to 2.33 crore and the average non-salary income declared has increased by 27%from Rs. 4.11 lakh in AY 2014-15 to Rs. 5.23 lakh in AY 2017-18.

All of the above shows how successful the DEMONETIZATION drive and the AADHAR linking to Bank accounts were. This BJP Government has used the ‘stick and carrot’ method very successfully to:

• Penalize truant tax payers.
• Reduce the tax burden on genuine tax payers
• Create confidence in the people that every paisa collected via taxes will be used for the welfare of the country.

A report by the Association of Chartered Certified Accountants (ACCA) titled ‘Emerging from the shadows: The shadow economy to 2025’, said the shadow economy in India represented 17.22 per cent of GDP, totaling about Rs 26,15,800 crore in 2016 & this will fall to 13.6 per cent of GDP by 2025. All this is  because for the first time, the Indian citizen is actually preferring to do his business legally and not through the black market or with black money / cash.

The middle class, especially the salaried class have always borne the direct tax burden with a grudge that their hard earned money never reached the poor, but actually went into the pockets of the corrupt. Mr. Modi with his control on corruption saw to it that this changed. The crores of Rupees spent on infrastructure building, arms procurement, and a host of other measures reaching the poor, came from the taxes collected and distributed without corruption. Despite the Opposition trying their level best to tarnish the image of Mr. Modi as being corrupt, it is a fact that they have not been able to do so, because they have not got any proof of any scams in these 4.5 years. The middle class sensed right at the beginning of this BJP Government that they meant business, and therefore they willingly gave up many subsidies.

A study, published in the ‘Future Development’ blog of Brookings (2018) said that every minute 44 people come out of extreme poverty in India and that by 2022, less than 3% of Indians would be poor. But according to Mr. Surjit Bhalla, Economist, every minute at least 100 people come out of poverty now. All this is because of the robust and courageous economic policies of this Government. Unnecessary schemes of giving free doles to the ‘poor’, like the one suggested by Mr. Rahul Gandhi, will tempt the people to go back to their ways of avoiding taxes and create a parallel black economy once again. This means that measures taken to alleviate the real problems of poverty would take a back foot and we will not be able to reach the target by 2022. Infrastructural activities taken on such a large footing, by the current BJP Government meant that many people were able to get jobs. Not just that, successful electrification projects also meant that many small scale or home based industries flourished. All this meant that instead of people waiting for the Government to directly help them through doles, people actually started earning through their own efforts. This is visible when we look at the figures of MUDRA loans taken. By 2018, Rs. 6 lakh crore loans had been given to 12 crore beneficiaries from the time the PMMY started in 2015. Does anyone think that these people would have been happy receiving free Rs.72,000 p.a. for no work done? We are not a Nation of Beggars. We are a hard working Nation. For all these years there were no avenues for the poor to start their own business or shops, but now the poor and especially the youngsters are totally committed to earning their living the right way, not through doles.

If the people of Bharat fall for the trap set by Mr. Rahul Gandhi and his Congress Party, we would once again soon become a nation of poor people. The hard-working Middle Class need to understand this and reject such fanciful follies of those who call themselves advisors and economists of the Congress party.