New Delhi: Ahead of the Union Budget 2025, a few concerned citizens have demanded that the government rationalise India’s taxation system so as to ensure the social security of all people and not just of the corporate moguls.
In a press release, the People’s Commission on Public Sector and Public Services raised concerns that the existing tax structure is “over-reliant on indirect taxes, grossly lop-sided, regressive and asymmetrically oriented in favour of big businesses”.
The release is undersigned by a group of eminent academics, jurists, erstwhile administrators, trade unionists and social activists including former Kerala finance minister Thomas Isaac; E.A.S. Sarma, former secretary in the ministry of power and economic affairs; Supreme Court advocate Indira Jaising; senior journalist V. Sridhar, among others.
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In the guise of promoting an “investment-conducive environment”, the release stated, the central and state governments have been giving tax sops and subsidies, making the tax structure heavily biased in favour of these businesses.
The release pointed out that in the last ten years, in absolute terms, while corporate taxes and GDP receipts have grown by only 2.3 times – from Rs 4.28 lakh crore to Rs 10.2 lakh crore and Rs 4.42 lakh crore in 2017-18 to Rs 10.6 lakh crore, respectively – income taxes have surged by 4.5 times, from Rs 2.5 lakh crore to Rs 11.8 lakh crore in the Budget Estimates (BE) for 2024-25.
Moreover, the indirect taxes in the form of GST (goods and services tax) paid by every individual, including the poor, has grown by 2.56% between 2017-18 and 2023-24 – from 7.9 crores to 20.18 crores, it stated.
“So we are taxing the common man more and enriching the richest. This has to be reversed,” it said.
The commission also highlighted the discrepancies in the percentage contribution to gross tax revenue (GTR), in which the government has recently attempted to reduce the proportion of corporate taxes and increase income taxes.
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This, the release stated, has resulted in an increase in income inequities and concentration of wealth, in violation of Articles 38(2) and 39(c) [Directive Principles] of the Constitution. “Such acute concentration of wealth… in the hands of a few oligarchs has allowed the latter to distort markets and manipulate prices to their advantage, at the cost of the people,” it stated.
Among other fiscal reforms, the commission has suggested the privatisation of central public sector enterprises and monetisation of their assets and provide “a transparent, rule-based, stable business environment” instead of giving subsidies to profit earning private companies.
On social security measures, the commission has raised concerns that in recent times, the government has “progressively reduced budgetary allocations for food security, rural employment, welfare of SCs/STs etc., ignoring its constitutional obligations”.
If all political parties discuss and debate these issues, the commission expressed, it could bring pressure on the ruling political executive to adopt the measures and incorporate appropriate provisions in the upcoming budget.
The Union budget is set to be presented before the parliament by finance minister Nirmala Sitharaman on February 1, 2025, amid growing concerns of rising inequality and stagnant income and opportunities, causing a subpar performance among Indian middle class.
Among other concerns, this year, all eyes will remain on what measures the government introduces to curb the rising household debt and unemployment, while also addressing the lopsided growth of the country.
