Indian Prime Minister Narendra Modi’s plans for “Amrit Kaal,” a promised period of prosperity, have taken a significant shift following his party’s reduced parliamentary majority. Finance Minister Nirmala Sitharaman’s latest budget omitted the previously popular phrase, signaling a more pragmatic approach amid dwindling support. The middle class, traditionally loyal to Modi, now faces higher taxes on stocks, property, and luxury goods, sparking discontent.
The government aims to simplify tax filings rather than increase revenue, but the new measures have irked the taxpaying middle class. New taxes include stricter levies on trading, higher taxation on long-term investments, and removal of indexation benefits for property sales. Capital gains exemptions, which could have eased the burden, were not implemented.
Meanwhile, despite a low-tax regime for companies, job creation remains sluggish, exacerbating the employment crisis. Despite hefty rebates and incentives, new investments have not translated into significant job growth. Modi’s policy shifts, including demonetization, GST imposition, and pandemic-induced worker displacement, have largely favored larger firms, at the middle class’s expense.
Significantly, the erosion of faith in Modi’s economic policies has narrowed the rich-poor voter gap, questioning the sustainability of “Modinomics.” The discontent is palpable, yet the Prime Minister’s rhetoric continues to shift, now tangibly impacting his core supporters.
Original Story https://www.livemint.com/news/india/modis-tax-plan-is-squeezing-the-middle-class-11722286172383.html
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