Whose patriotism is it?

Finance Minister Nirmala Sitharaman will present this year's budget to the parliament on 1 February. With the National Statistical Office (NSO) predicting a 7.7% contraction of the economy for 2020-21, "all eyes will be on the magnitude of fiscal stimulus the 2021-22 Budget will provide", wrote Roshan Kishore. Three numbers, which are tax buoyancy, share of direct and indirect taxes and share of total revenue given to states, need to be watched. "Overall tax buoyancy, measured as percentage change in gross total revenue divided by percentage change in GDP, has been falling continuously since 2016-17." While direct taxes are considered progressive, because the rich pay more, indirect taxes are regressive because the poor also are forced to pay equally. Even though consumption of petrol and diesel fell due to the lockdown, "Excise duty collection during April-November 2020, was at Rs 1,96,342 crore (Rs 1.96 trillion), up from Rs 1,32,899 crore mop-up during the same period in 2019, according to data from the Controller General of Accounts (CGA)." "The 14th Finance Commission set the share of states in central taxes at 42%." "States' share reached a peak of 36.6% in 2018-19 and has fallen sharply since," wrote Kishore. The Central government refused to pay compensation for shortfall in goods and services tax (GST) collection and asked them to borrow a total of Rs 2.35 trillion instead. "India is considering hiking import duties by 5% -10% on more than 50 items including smartphones, electronic components and appliances in the upcoming budget, three government sources privy to the discussions on Monday." This is being dressed up as support and protection to Indian industry under Prime Minister Narendra Modi's vision of 'Atmanirbhar Bharat' or 'self-reliant' India. "Tesla CEO Elon Musk kept his word of making debut in India in 2021 by setting up its first office in Bengaluru." As if on cue, the government intends to increase duties on furniture, hurting Swedish furniture maker Ikea which invested in India in 2018, and on electric cars which are what Tesla makes. The idea is to raise Rs 200-210 billion ($2.7-2.8 billion) in taxes. Musk, however, is a genius. "US automaker Tesla has chosen the tax-friendly jurisdiction of the Netherlands to route its India investment." "This corporate structure in India would offer Tesla tax benefits related to capital gains and dividend payments, say experts." The result will be that Indians will have to pay huge taxes to buy carbon-friendly electric cars, while the government loses out on taxes on the company because rates here are so high. Netherlands gains at the expense of Indians. "I would say keep the direct taxes stable, please do not change them. Please go easy on protectionism," advised Swaminathan Aiyar. In 2019, Sitharaman reduced corporate taxes from 30% to 22%, but increased the surcharge on individual income tax and dividends from shares were made taxable in the hands of the receiver, thus increasing tax liability. By increasing prices of imports the government is allowing Indian companies to increase prices on their products and the government will merrily suck up huge amounts in ad velorem GST. This Atmanirbhar Bharat is a great wheeze. Collect from import duties and from higher GST from citizens. All in the name of patriotism.