What will they tax if earnings keep falling?

When demonetization was suddenly inflicted on the nation by Prime Minister Narendra Modi, on 8 November 2016, "Several sectors that transact in cash were left holding large sums when Rs 1,000 and Rs 500 were rendered invalid in November 2016. Several companies deposited the cash they were holding in bank accounts." In an act of largesse this year's budget increased income tax threshold limit to Rs 500,000 and reduced the rate of taxation by increasing the number of slabs of income, provided the assessee gives up all exemptions allowed until now. "India's slowdown has bottomed out; economy needs to be opened up if the country wants to realise the ambition of a 10% growth rate, former Niti Aayog Vice Chairman Arvind Pahagariya has said." Three stories which appear to be disparate but actually have one theme in common. And that is the desperation of this government to squeeze an unjustified amount of tax out of individuals and businesses. Workers in the unorganized sector prefer to be paid in cash so these businesses tend to keep large amounts of cash. Those with illicit cash transferred it to northeast states which are exempt from income tax. Economic growth was lowered by 2% by demonetization found a paper from US-based National Bureau of Economic Research, but the effect dissipated by the next quarter. Demonetization was a "massive, draconian monetary shock", wrote former Chief Economic Adviser Arvind Subramanian which hit the unorganized sector badly and failed to achieve any of its objectives. Unfortunately the government is not willing to accept it. As for easing the burden on taxpayers, under the new scheme a person earning Rs 500,001 will end up with much less money than one earning exactly Rs 500,000. It is a trap for the gullible. This year's budget increased customs duty on many imported goods. "Consumers can expect to pay more for imported food and grocery items, shoes, ceiling fans, wooden furniture, kitchenware, appliances, hairdryers, shelled walnuts and other items with the budget raising basic customs duty to as much as 100% on some of them to encourage local producers." Raising prices of imported allows domestic producers to charge higher prices from customers which means the government can earn more from goods and services tax (GST) levied on those items. Tax officials have suddenly raked up claims on jewelers who sold their stock at massive gains following demonetization. Companies are taking legal action against tax officials for denying them GST relief on gifts given to customers. No wonder GDP growth was a meager 4.7% in the third quarter ending 31 December. Investment needs money and the government thinks anyone with money must be a thief. Better to be safe and earn little.