Congress Criticizes Modi Govt for Tax Cuts to Billionaires, Higher Taxes on Middle Class

In a recent statement, the Congress party has leveled serious allegations against the Modi government, claiming that it has favored big billionaires and corporations with significant tax cuts, while the burden on the salaried, middle-class, and workers has only increased. Jairam Ramesh, the Congress General Secretary, highlighted this disparity through a post on X, drawing attention to the shifting dynamics of tax collections in India.

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Ramesh pointed out that under the tenure of Dr. Manmohan Singh, personal income tax constituted 21% of total tax collections, with corporate tax at 35%. However, he noted a drastic change following the Modi government's decision to slash corporate taxes just days before the Howdy Modi event in the US, which he claims cost the exchequer Rs 2 lakh crore. According to Ramesh, this move has resulted in corporate tax's share of total tax collection plummeting to its lowest in a decade at 27.1%, while personal income tax's share has marginally increased to 27.4%.

The Congress General Secretary argued that such fiscal policies have not only failed to stimulate private investment but have also led to its decline. He cited figures indicating a drop in private investment from 35% of GDP during Dr. Singh's tenure to below 29% throughout the Modi administration. Ramesh emphasized that without a surge in private investment, expecting an acceleration in GDP growth is unrealistic.

Furthermore, Ramesh clarified that while corporate taxes have been reduced, it is primarily the mega-corporations and 21 billionaires in India who are reaping the benefits. In contrast, small businesses such as proprietorships and partnerships are subject to income tax rather than corporate tax. To substantiate his claims, he shared a graph comparing the tax collection trends during the tenures of Narendra Modi and Manmohan Singh, showcasing an increase in personal income tax collections as a percentage of total tax collected and a decrease in corporate tax collections.

This accusation from the Congress party sheds light on what they perceive as an unjust fiscal policy favoring the wealthy at the expense of the broader working and middle classes. The debate over tax reforms and their implications continues to be a contentious issue within Indian politics, reflecting differing visions for the country's economic future.