Budget 2019: How much will tax on rich add to govt's coffers, asks Congress

As they trooped out of the Lok Sabha after the end of a nearly two-hour long Budget speech, several Congress MPs said the Budget had nothing for the middle class and jobless youth. Bharatiya Janata Party (BJP) MPs, intrigued at the proposed increase in tax on the super-rich since they said most are supporters of their party, hailed the Budget as pro-poor. 

Over the past five years, Prime Minister Narendra Modi has tried to turn on its head the conventional rhetoric of Indian politics – of the Congress representing the voice of the poor, and the BJP that of the middle classes. 

Finance Minister Nirmala Sitharaman’s Budget speech, as the Opposition pointed out, did not directly refer either to the agrarian distress or jobs crisis. She did, however, offer ‘talking points’ on ‘gaon, garib and kisan’ that BJP cadres can take to small towns and villages to showcase the Modi government’s intent to improve the lives of urban and rural poor. 

Lest the government is accused of benefitting the corporates, as Communist Party of India (Marxist) chief Sitaram Yechury did by terming the corporate tax relief to 99.3 per cent corporates as “payback”, the FM also enhanced tax on the super-rich earning Rs 2-5 crore by 3 per cent, and 7 per cent for those getting over more than Rs 5 crore. 

Such measures and schemes, including demonetisation, Ujjwala, Rs 1 lakh loan to women members of self-help groups and housing for poor, have helped the BJP speak incessantly about the “welfare of the poor”. The Congress finds itself talking about the middle classes. 

Congress Lok Sabha MP Manish Tewari’s tweet after the Budget exemplified this irony. 

“Higher taxes on diesel and petrol, increase in import duty on gold and no outlay for addressing the impending water crisis – what does it even have for the middle class?” Tewari tweeted. 

“If you want to tax the very rich, that cannot be found fault with,” senior Congress leader P Chidambaram said. He said the government should have also disclosed how many people have an income of more than Rs 5 crore, and how many between Rs 2 crore and Rs 5 crore. 

“The number cannot be more than a few thousands. You are not going to get much revenue there. But it is alright for a platform to stand up on and say I have taxed the rich,” the former Union finance minister said. Later, the government said it estimated getting Rs 12,000 crore from the increased surcharge on the super-rich. 

Income inequality in India has sharpened in recent years. In the 2019 polls, voters supported BJP’s national security plank to the Congress’s ‘Nyay’, or redistributive justice. However, as Assembly polls in Maharashtra, Haryana and Jharkhand draw near, Modi government has thought it wise to burnish a pro-poor and anti-rich image.