Wednesday, May 27, 2026

Whose sacrifice was it?

"The poor in India are paying a higher proportion of their income in tax due to the Goods and Service Tax (GST), claimed Mukulika Banerjee, an anthropologist at the London School of Economics." "Experts, however, fact-checked her, saying that the basket of products used commonly, including the poor is mostly untaxed or faces 5% GST at best." "Tautologically, the consumption basket of the rich has far higher GST than that of the poor. India's sub-middle classes pay very little tax," wrote Somnath Mukherhee. It is true that unpacked food items bear no GST, while articles of daily use are taxed at 5%. cashfree.com. Taxes on automobiles, air-conditioners, televisions, monitors and projectors have been reduced from 28% to 18%. These are probably seen as luxury goods, not for the poor. In April, "India is currently witnessing severe heatwave conditions across multiple regions, with 95 of the world's hottest cities located in the country, raising concerns over the impact of rising temperatures." newsonair.gov.in. Officially, India is the hottest country on the planet. Should the poor not desire automobiles and air-conditioners to protect themselves from this blistering heat? Why are lotteries taxed at 40% when they are bought almost exclusively by the poor? "Lotteries are said to exploit the poor, as they sell the false dream of easy money.This has resulted in cases of bankruptcy, loss of property and even suicide in the worst cases." MC. So, the poor are exploited twice, first by the lottery selling false dreams and then by the government, if the dream actually came true at odds of billions to one. "In the UK, lottery winnings are entirely tax-free upon receipt, with no deductions for income tax, capital gains tax, or any other direct taxes." "Whether you win 1,000 or 100 million pounds, you'll receive the full amount without deductions." uwaccountancy.com. In the UK, if you take the risk you deserve the reward in full. In India, you take 100% of the risk, the government takes 40% of the reward. Tautologically, whatever that means. Automobiles used to run on petrol. After paying 18% GST on an automobile, "Petrol tax in India consists of 55% of petrol's retailing tax while diesel is 50% of the fuel's retail value." cleartax.in. The retail price of petrol in India has been increasing from 60.50 per liter in 2015 (cleartax.in), when it was at an average of about $2.5 per US gallon in the US (eia.gov), which converts of about Rs 41.5 per liter, taking one dollar at Rs 63 (thomascook.in). In 2020, the retail price of petrol was hiked to Rs 80.43 per liter while it was at an average of $2.5 per gallon in the US, which converts to Rs 48 per liter because the rupee had fallen from Rs 70.96 to one dollar in January 2020 to 73.78 in December. The retail price of petrol has been over Rs 95 per liter in India since 2021, whereas it varied from about Rs 90 per liter in 2021 to around Rs 75 per liter in the US, the rupee having fallen to 86 to one dollar. Union Finance Minister Nirmala Sitharaman said four days ago, "From the government's side, for about 76 days, our objective has been to ensure no additional burden is placed upon the people. We have provided relief amounting to more than Rs 1 trillion annually this year through reductions in excise duty." TN. This is 'pants on fire stuff' (urban dictionary). Postponing the hike in the retail price of fuel till after assembly elections in various states (wikipedia) was a cynical exercise in conning people. The government's duty is to increase disposable income by levying the lowest possible taxes, especially on fuel which is price inelastic. But the government has raked in around Rs 50 trillion from the extortionate taxes on fuel since 2015 (ppac.gov.in) and so any reduction in the duty is not a subsidy. The worst con is that it is all being done for the poor when the poor are suffering the most from high indirect taxes, as Mukulik Banerjee claimed. "The attitude that just because most Indians are poor, we should not have high standards for Indian life explains why our roads are dangerous and why trains derail; our standards are low at almost every level," wrote Manu Joseph. Deliberately keep people poor through high taxes and then treat them like beggars by distributing taxpayer money just before election (pib.gov.in) and they will gratefully vote for you. If that is not cynical, what is? Tautologically.

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