https://www.centralchronicle.com/viewnews.asp?articleID=46265
The approval of a bureaucracy-edited unimaginative Direct Tax Code (DTC) and higher salaries for the nation's lawmakers was the highlight of last week. There has been much brouhaha over both. Though many would aver that the two do not have any correlation a careful scrutiny would establish the connection.
The MPs have got a three-fold raise in their salaries and allowances, forcing the moral brigade to question the propriety. It goes by the hackneyed argument that a poor developing country cannot afford it. Is it correct? No. The lawmaker - the politician - is expected to function like an old Bengali adage--"The brahmin's cow should have less to eat but yield more milk". That cow never gave more milk but used to enter other houses to rummage for food. Do we expect our MPs to do the same? In some cases they had been doing so if the cash for questions and similar other scams are any indications.
One needs to understand that politics is an expensive, time consuming, labourious profession. On an average, every MP has to tend to his constituency and help his voters and other non-voters if he has to remain in the reckoning. On any day, not less than 10 persons, at a very moderate level, would be visiting an MP's home whether he is in Delhi or his constituency. He has to as a minimum courtesy offer them a cup of tea. In many cases, he has to arrange for their lodging, transport, food and even hospitalisation without a demur. Indeed, the present salary certainly cannot take care of all this and even the enhanced pay may meet only a part of his expenses.
The MPs argue that they must get better and far more wages than a bureaucrat, even up to the level of a Secretary to the Government of India. This is so because the bureaucrat does not have to take care of any person except his family. Besides, the MP has to visit his people at every occasion - birth, marriage or death--and ends up spending more than just on travel. In many cases he has to fund funerals. So the argument is give the MPs double the salary of what the Secretary gets and that too tax free.
Well, that would be the principled stand. But it can be counter-argued out that the MP should not be given that much because he is succumbing to bureaucratic pressures and unable to aid the people whom he represents. The moot point is that he has been elected to bat for the people. His job is to guide the bureaucrats and not be misguided. But, this is what he is not doing. Else, how could the same old Income-Tax Act, with cosmetic changes be accepted as the DTC?
The MPs need to put their foot down and reject it lock, stock and barrel. He also must lead the country to a debate whether there should be direct taxes, which robs a citizen more than 40 per cent of his income through indirect taxes. Sadly, even a beggar has to pay that much.
Over the past six decades the nation has been continuously looking at the budget for getting tax relief. But it has turned out to be a joke. The DTC has only tried to continue with it. It does not have a perspective. It does not explain why the highest tax slab has to be 30 per cent and not 20 per cent or less. It does not answer why many exemptions are being denied if the tax has to be at 30 per cent. The DTC needs to simplify the process and not continue with the complications.
The bureaucrats have created a myth that the tax rates are the lowest in the world. The MPs have gulped their arguments. They need to see that an average Indian pays 60 to 70 per cent of his income as taxes and if inflation figures are linked, it this would add up to another 10 per cent at the least. After spending 80 per cent of income on taxes, would the citizen have enough to spend - consume -for the growth of the country?
The DTC does not answer any of these questions. Just adjusting small slabs and retaining the obsolete I-T Act of 1961 should not be the purpose of such an omnibus exercise. It should have given a perspective. A code is a guideline for the future course of action. The DTC simply does not have it.
The citizen is not born to pay all his income to the authorities, whose accountability is often in doubt. The idea for revising the Income-Tax Act was mooted primarily to simplify the cumbersome rules, rationalize the tax structure and simplify procedures in order to reduce hassles created by bureaucratic discretion. An unstated objective was to reduce corruption. During the last few years a number of income-tax officials have been held with huge accumulation of wealth beyond their known source of income.
Why does the DTC then not address these? The DTC allows too many discretionary powers to the tax officials as does the I-T Act. It leads to litigation and a thriving regime of appellate mounting expenses on the Government as well as citizens apart from adding to their humiliation and harassment. The expenses on tax collection have only increased since Vijai Kelkar had given his assessment. Sadly, the DTC has not tried to rectify it.
The MPs need to ask the Government why it has spent so much on framing a code that leads to nowhere. It was being addressed piecemeal through the budgetary process every year. Why is there this publicity blitz for a DTC which in fact does not show any path? If the same principles of a socialist era have to be retained, then why should one call it a new a code? The MPs need to tell the bureaucrats firmly that they have done a bad job and must rework on it
As it is presented in Parliament, the MPs must jettison it and seek to redraft a visionary code that would remain valid for the next 100 years or more. Rather it should become the bedrock for all policies that are to be laid down in future. It must address the basic questions-- of lowering tax burden to 20 per cent, linking taxes to the inflation (higher the inflation lower than the decided rates) and treat taxpayers as real masters and not criminals. The MPs have got the opportunity and it is time they show they care for the people.
Shivaji Sarkar, INFA
