Cost of being Middle Class

NPCI, indirectly Government, has introduced 0.4% MDR on UPI transactions, with conditions apply. At this minimal rate, it is unlikely to impact my personal budget. But looking at larger picture, it could generate annual revenue of approx. Rs 20,000 crores for banks and for UPI eco system. This change and some other recent events, got me to think over about overall tax burden imposed on middle class.

 

1. Right from salary day we start contributing to exchequer. TDS is deducted even before the salary gets credited.  Followed by GST being charged on every consumption. Followed by countless other taxes like road tax on vehicle purchase, capital gain taxes on stock returns, securities transactions tax, property tax, entertainment tax. After all this, whatever little savings we could manage, we are again charged taxes on interest income.

 

2. Income tax is meant for infrastructure development and nation building. Being an educated citizen we understand this logic and comply as well. But then post income tax, we have to pay road tax of 10-15%. Having paid twice for roads and infrastructure what we get is potholes and unsafe roads. It doesn’t end here. Elite toll tax comes next, for travelling on highways. Why I have to pay thrice for roads, that is my concern.

 

3. Then there is fuel. Everyone is well aware that center and state taxes on fuel doubles the retail prices. And now we are paying same price for ethanol blended petrol for a reduced mileage and potentially damaged engine components in future. Individuals will have to bear the repair cost and would be expected to pay GST on that repair as well.

 

4. All this could still be justified, if system was providing us low cost education and healthcare. Certainly this is not the case. We had to go to private schools for a reasonable quality education, take loans for higher education and then repay it for years. In 90’s, we at least had good air and drinkable tap water. Today households are paying for basics like water purifiers, air purifiers, electricity backup, something which governments are supposed to provide.  

I know nothing comes for free and don’t expect anything in free. But my concern is that common man is penalized at every single step, for every single consumption.  

 

Common man's purse is actually the systemic golden goose. A humble and submissive goose, that silently accepts whatever is imposed on it. So 0.4% MDR is negligible given all the taxes we are already accustomed paying. And let us not forget, banks too have a social responsibility to waive off loans of thousands of crores for big defaulting corporates. So we should actually be a sport and take this MDR in our stride.

After all goose must keep laying.