We were right all along.

For years we have been writing that taxes in India are the highest in the world but this was based on personal experience because there were no figures combining all the taxes levied on goods and services. Now there is. The government is keen to set up a uniform tax rate across India, called the Goods and Services Tax, which will combine all the taxes to one transparent rate, thus avoiding a cascading effect of different rates in different states. This will help business and bring in foreign investment, which the country sorely needs. A committee was set up to recommend one rate which will be acceptable to all the states and came up with an eye watering rate of 27%. Apparently this will be revenue-neutral, meaning that this is what consumers in India are having to pay at this moment. The committee arrived at this extortionate rate by calculating taxes collected in 2011-12 and says that a final figure will be calculated after last year's collections are taken into account. Even this is not enough for state governments which want to tax petroleum products separately. Which country in the world punishes its citizens with such exorbitant taxes? GST in Singapore is just 7% and see how rich it is. Indirect tax rate in Sweden and Denmark is 25% while top rate of income tax is 60%. Indeed, but both countries provide social security to all citizens. Regardless of class and social standing. Sweden provides for education, healthcare, maternity benefits, pensions and disability. For the poor there are supplementary benefits provided by municipalities. In India municipal corporations are all corrupt. There are thousands of ' ghost employees ', that are employees who do not exist but someone collects their salaries. To construct a house you will have to pay bribe to register your land, for your plans to be passed and to get a completion certificate. Roads are repaired superficially, so that huge potholes appear after one shower, and the money is divided between the contractor and officials. In Denmark healthcare is free for everyone and pensions are available to everyone " regardless of class and social standing ".  In India benefits are ' targeted ' which means that only the poor can avail of benefits. In parts of Andhra 95% of people applied for benefits with Below-the-poverty-line cards. If benefits are available to everyone the middle class will be assrured that there is a safety net then they will spend more, take higher mortgage and stop buying gold. That will stimulate very high growth. Tax at 27% adds to inflation and destroys demand. Then there are surreptitious taxes, such as the Right to Education, which is a tax on the middle class. We were so right.