Did Mr Arun Jaitley really tax the super rich and high-net individuals as suggested strongly in chief economic adviser Arvind Subramanian’s scintillating Economic Survey? He said that the government subsidises the rich to the tune of Rs 1.03 lakh crore on just six items. It is certainly not the case of “robbing” Robin Hood style, from the rich to help the poor. It’s not even petty theft! I am sure even the super rich do not think so. Hasmukh Adhia, secretary, department of revenue, has estimated that they would get around Rs 4,000-5,000 crore from the surcharge and the dividend tax on dividend earned above Rs 10 lakh. This is peanuts when you consider this amount against the number of ultra-rich and dollar millionaires in the country. According to the Credit Suisse Global Wealth Report, there are 2,080 ultra high-net worth individuals in India with wealth of over $50 million (over Rs 335.9 crore), and the number of dollar millionaires are 2,50,00 of the top 1 per cent of global wealth holders.
Credit Suisse said: “We estimate that 2,080 adults have wealth over $50 million (Rs 335.9 crore) and 940 people own more than $100 million (Rs 671.8 crore).” Which means the combined wealth of these 2,080 individuals runs into hundreds and thousands of crores of rupees. Further, the report observes that while wealth has been rising strongly in India and the ranks of the middle class and wealthy have been swelling, not everyone has shared this growth and there is still a great deal of poverty. To support this point, it reveals that 95 per cent of the adult population has wealth below $10,000. At the other end of the scale, a very small proportion of the population (just 0.3 per cent) has a net worth over $100,000, it said.
And what does Mr Jaitley do? He taps this rich boy’s club for a measly $595.41 million-$744.26 million not even to the total wealth of two HNIs. And the media hype is that he has robbed the rich to finance his schemes for rural India which is in deep distress and agriculture. The new cesses, Krishi Kalyan and Infrastructure, and the existing Swachchh Bharat cess will give the government around Rs 8,000 crore.
His soft corner for the richie rich is in contrast to his tapping into the hard-earned provident fund earnings of the salaried class that earns above Rs 15,000 a month. He will tax 60 per cent of this at the time of withdrawal.
There is a lot of discontent among these dollar billionaires an millionaires over the tax on dividends received above Rs 10 lakhs. From reports, most companies are rushing to declare hefty dividends before the April 1, deadline when this tax comes into force. So the rich know how to get round such irritants. Amongst the high dividend receivers who are affected are Azim Premji of Wipro who gets a dividend of Rs 1,644 crore, Mukesh Ambani family (Rs 1,100 crore), Kalanithi Maran (Rs 332 crore) and others like Infosys founder Narayana Murthy and their families etc.
Mr Jaitley also taxed the lifestyles of the rich and middle class, from clothes to shoes and eating out. The service tax too has been increased by one per cent. Not all the money from the various cesses amounting to Rs 1,65,670 crore is going to the poor because most of it will be used to keep the fiscal deficit in check.
