Honesty - Will or Lack of Opportunity? 24 Lac coveted seats - Will or Lack of Choice?
Author: Prof. Nituj Gupta
The more one sees around, the feeling grows
that few people seem to be honest by choice and will. The others have either
already got the opportunity to be dishonest or are waiting and maybe planning
for one.
24 Lacs Indians file a tax return of over
10 Lacs per Annum. Very very difficult to digest but as the Prime Minister
himself reiterated it number of times, surely it has been crosschecked several
times. This is when we say that salaried people have tax deducted at source
(TDS). It is very unlikely that anyone whose TDS is against an annual income of
over 10 Lacs does not file their IT return accordingly.
Interestingly my wife and myself both find
ourselves in this small group and when we talk to our acquaintances, on this,
who are working in the corporate world or in the teaching fraternity like us,
we can identify many who are part of this. So, on the one hand, there is a joke
now that if we start connecting dots to finding out who are these 24 lacs we
will identify them pretty soon. On the other hand, when I look around in the
Society I live in, having 700 apartments, I am seriously doubtful of how many
of these people file an income return of over 10 Lacs per Annum. For reference,
this is a visibly affluent society, much above the city average.
Even more interesting is that there are
many Government officials in our Society and when I compare our purchasing
power vis - a - vis any of them, we are miles apart. Being in the select group
and yet, after taxes having to think before spending is how we function, while
these people do not even flinch at anything however expensive. I heard another
interesting story. I was told that a couple, both from an IIM educated background
and both being part of this select group, found that to purchase one upmarket
apartment they would have to shell out 10 years of their savings. The
interesting part is that their neighbour is a clerical level government
official who actually has several such properties as investments.
When we talk of these premier institutions,
the IIT's and the IIM's, and the media tells us that almost every pass out
makes at least 10 lacs per annum, the figure of 24 lac tax payees filing a
return of over 10 Lacs per annum looks highly improbable or ridiculous. These
are returns of the entire population spanning at least 35 years of working
people and more i.e. the majority of those who passed in the last 35 years from
the IITs and IIMs and are in India are all part of this 24 Lacs only. From
these numbers it would be very interesting to see how many of these 24 Lacs
have a Graduation or Post Graduation from an IIT / IIM. If the math is right,
the percentage should be very large. We have not even considered the NIT's, IIITs,
premier Government and Private Institutions and Universities who all stake
their claim to similar placement results.
Coming to the corporate sector, the big
ones of the IT sector should be contributing probably 20% of people to this
select group of 24 Lacs and then there are such biggies in every sector
specially the consulting ones where salaries are even higher. So assuming that
they employ a lot of non IIT / IIM passouts who also get substantial salary, if
there are any seats left in this 24 Lacs, they would probably be accounted
here. The only other explanation can be that package versus actual money has an
abnormal level of variation.
A colleague, who is a decorated retired
colonel, has a pension above a Lac p.m. From what we further gather, almost all
colonels and above, across the defence forces and paramilitary, serving or
retired, must be having this kind of monthly income. Surely they all are filing
their returns. Similarly, would be the large number of bureaucrats and
Government personnel who at senior levels would be taking home 6 figure
salaries and filing their return. So those employed by the Government also seem
to be occupying a majority of these 24 Lac seats.
Till now we are talking of those whose tax
is deducted at source and are salaried people. Now come the real numbers, all
the self practicing doctors, CA's, lawyers, consultants and then businessmen.
The rush to be a doctor is much governed by the fact that in the rarest of rare
cases will you hear "POOR" doctor and poor in terms of money alone is
the context here. From sheer experience and visibility around, there is little
doubt that a majority of these practicing doctors easily make over a lac a
month. An ultrasound recently at a very small outlet of a doctor - hardly 100
sq.ft at best and with no rush - when payment was done through paytm what we
got to hear was that paytm was a temporary solution due to cash crunch as it
had a transaction limit which could hardly cover for the revenue of a single
day. No further comment on this is necessary, except that the group of 24L
people in this country should be covering all this class also of across the
country. Somewhere the math just doesn't work right.
We have not even touched the celebrities of
films, televisions, and the declared super rich who must obviously be eating
away a lot of positions in these 24 lac coveted seats.
A very interesting conversation I just had
and which I could not resist sharing. When this topic was being discussed, I
was told your bias is of an educated class which you seem to know more. Have
you heard of a position called "Patwari"? The literal definition is
"a government official who keeps records regarding the ownership of
land". If you google this word you will truly be amazed. The eligibility
for this position is not even a simple graduation. And yet I am told that a
Patwari has exhibited and visual affluence far greater than all those educated
ones put together. In fact if you are finding a match for marriage for someone
who is a Graduate or even a Post graduate and working as a junior manager in a
company versus a Patwari, you will be truly truly amazed. The Patwari would be
a role model of the family probably, revered for their affluence and their
access to such affluence. A recent article says that while 24Lac people in
India file income tax returns of over 10 Lacs per annum, 25 Lac cars are sold
in India every year. This person jokingly tells me a logical answer would be
found if we calculate the number of patwaris and the number of cars each one
owns. After all companies doing their market sizing for further entry into
Indias auto sector must be getting the right numbers from somewhere.
A statement - who will apply for a
Government Job if corruption is curtailed - is heard in many ways since
demonetization and tells a lot of our psyche.
Well, demonetization has at least made us
all aware of what we really are. Hard facts are now out and we can view people
around us in a different light. People who own farmhouses, bungalows, acres and
acres of land, buildings, factories, hospitals, hotels, institutes and so on.
The 24 Lac seats as explained above are obviously overbooked already and
therefore, on paper, barring exceptions, these owners are the needy hand to
mouth survivors as far as their income tax returns are concerned.
The business man is already a branded
generator of black money. The agents, consultants and officials who eat a major
share for the cover up remain the obtrusive ones. Eventually everyone is eating
from the same kitty. The businessman generates but saves the tax and those who
help him take a good part of the saved tax. This has already been discussed
from time immemorial in India. Have you considered the economics of a scam?
Lets say a 70000 crore commonwealth games scam. The money actually went to
different businesses which were given orders. If these businesses made little
or reasonable profit, then there is no scam really which implies they made an
abnormally huge profit. If this profit was actually reported and the tax on the
same paid the effect of the scam would again reduce considerably but obviously
that is also not the case.
Now after two months of the announcement of
demonetization, reports suggest almost all the officially accounted discarded
currency is back in the bank. Hushed but strong rumours suggest that the actual
notes printed from official mints were more than those accounted in the books.
The highest form of black money or legalized fake money so to say. Although
supposedly improbable, still has people wondering about the possibility given
the blatant levels of corruption that we have witnessed. One thing is for
certain though, the money which has now got routed through the banks has a
paper trail. Rise of the "bankster", a new term we saw in this
period. Someone who has a chance to be part of that group which helps save the
tax. The major difference though, that exists now, is that a trail exists
however much it may be complicated. One thing is definitely easier, find the
bankster and a lot of things will come in the open.
Well, Round 1 to Mr. Modi who has at least
created a trail for all the accounted cash in India i.e. a banker / bankster is
now a common link in each transaction. The task now seems to be finding the
willfully honest people in this country. Only then can the direct tax to GDP
ratio really grow and the country prosper. Any developed country in the world
currently is known by their high direct tax to GDP ratio i.e. they have far
more taxpayers in the country. Sounds logical too - when a majority of the
people contribute to the development of their country, positive impact is bound
to reflect.
Astrological predictions are that India
will be a superpower. So either Mr. Modi will find steps now to take us on that
known path, or India will need to create another first, to be a developed
superpower and yet have a miniscule (less than 0.2%) population who declare an
annual income commensurate to probably an upper middle class or lets say
adequately affluent but not mindlessly luxurious.
Anybody who is somebody, including the ones
in the group of 24 Lacs, has been impacted adversely even if it is a fall in
their mutual fund nav's. Anybody who is nobody, despite media, despite the
somebodys hue and cry, despite being volatile to even small instigation and
events, have endured the queues. Right now the reason simply looks like they
are happy to see the pain of the somebodys.
The stage has been set. The game begins
now! Good, bad or ugly - time will tell.
With you Nituj ..... look forward just as eagerly for figuring out Good, bad or ugly
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