Budget 2024: Days ahead of the upcoming Modi 3.0 government’s first Union Budget of 2024, Mohandas Pai, the chairman of Aarin Capital in an exclusive interview with Mint talked about the nation’s middle-class residents becoming unhappy in life paying the majority of taxes in the world’s most populous nation.
“The middle class all over the country is very unhappy that they are paying the majority of the taxes, they are not getting any tax deduction, inflation has been high, the cost has been high, student fees have gone up, living cost has gone up, quality of life in the cities remain poor because of traffic even though things have improved,” Mohandas Pai, chairman of Aarin Capital told Mint. “They need to see a reduction in the taxes,” he said.
Pai was not in favour of the tax slab policy that the government has introduced in the last two budgets. Income tax collections have been going up 20 to 22 per cent, so a reduction in taxes, instead of the multiple new slabs of income tax and only giving breaks for housing, is required for the middle class of the country, according to Pai.
“For example, only one crore people have housing loans, whereas 6 to 7 crore people have salaried income including pensioners,” said Pai during the interview.
On Thursday, a LocalCircles survey of 21,000 respondents from 327 districts across India, showed that 48 per cent of the households in our country are expecting a reduction in income and savings by the end of the financial year 2024-2025. This narrative is fueled by the rising costs of living at a much higher pace than the rising income level in the country making it harder to sustain daily life with a set income or savings.
Pai’s argument was not just limited to the middle class of the country, he highlighted challenges like infrastructure development to be a primary focus along with the need to “increase the purchasing power in the bottom 50 per cent of our population.”
Apart from the two, job sector growth needs to be focused on overcoming the present challenges where – “80 per cent of jobs pay less than ₹20,000, and that is a problem,” said Pai.
“We have to stop tax terrorism,” said Pai highlighting the focus on the Enforcement Directorate (ED) and Central Bureau of Investigation (CBI) to complete cases and file the chart sheets to hold them accountable in a set time frame. “Tax terrorism is a big threat to India,” he said in the interview.