Slowly strangulating the middle class.

" I have always believed that there is hollow argument in this country that you are either on the side of the poor or on the side of the industry. I am on both sides," said our most magnanimous Finance Minister after unveiling his bag of tricks in parliament, also called The Budget. However, he has forgotten those of us in the middle, known as the middle class. The poor have their subsidies which are ' targeted ', which means that money is paid directly into their accounts, called Jan Dhan Yojana, so that the middle class can be bypassed. For the rich wealth tax has been abolished. " I think on the question of wealth tax, lakhs of people are filing returns, they go and understate their jewellery from the jewellers, they do understate the value of properties in front of the real estate people, then they file a return," he said. " The whole energy of the department is spent on those lakhs of returns. Finally we end up getting Rs 900 crore or Rs 1,000 crore from the whole wealth tax and with all its attendant consequences. So it's a very high cost tax with a very low yield." Exactly. People hate paying taxes so there will be " attendant consequences ", such as bribery. But adding a surcharge of 2% on the income tax of the super rich is hardly likely to yield a bonanza. The super rich have accountants and lawyers to advise them on how to avoid taxes. Instead of salary they could be paid in stock options or even real estate, since half the value of any real estate is paid in cash under the table. So the rich and the poor have done well from the budget, but what about those of us in the middle? The middle class is defined as those earning Rs 340,000 to Rs 1.7 million per year. This class is supposed to reach 113.8 million households or 547 million people by 2015-16 and double by 2025-26. Which makes us the majority. So what is there in the budget for us? Absolutely nothing. In fact, we will be worse off because of rising taxes. Sure we can claim tax relief on Rs 30,000 for health insurance but that will insure you for Rs 500,000 which is about 5 days treatment for a serious illness in a ' corporate ' hospital. We can claim a higher relief on pension contribution but you have to live long enough to collect pension, not if you die because you cannot afford healthcare. First the rail budget increased freight charges on grains, pulses and coal, which will increase cost of food and electricity. Now the budget has increased service tax on a host of services from 12.5 to 14%. We do not know if that is correct or if a 2% surcharge will be sneaked in, making it 16%. So the usual flimflam. Not much different from the Congress, is it?