Middle class India’s wish: Let’s get a salaried finance minister
Two finance ministers have shown a disinterested approach towards the salary class.union budget Updated: Mar 01, 2016 12:24 IST
That headline needs to be clarified. Of course, finance minister Arun Jaitley gets a salary, just like every other finance minister did, indeed just as any member of Parliament does. But Mr. Jaitley’s did not always earn a salary. One of the most successful lawyers in the country, he earned his income in fees. He was therefore not bound by the concerns and limitations of a salary that the working class faces.
The same goes for P Chidambaram, Mr. Jaitley’s predecessor in the job. A similarly successful lawyer, Mr. Chidambaram earned a salary only when he was a member of Parliament. No wonder these two finance ministers have shown a disinterested approach towards the salary class.
Trust us, you haven’t heard the last of the provisions in Mr. Jaitley’s third Budget, presented Monday, to tax withdrawals from the employee provident fund. Already, clarifications are coming that the tax may be levied on the interest, not on the corpus.
But, hey, so far provident fund was free of tax. This is the first time that PFs will be taxed. Is it the thin end of the wedge? These are hard-earned savings that a salaried employee salts away, sacrificing some pleasures of today, in the hope of a comfortable life after retirement. It won’t be pretty for her to give up a chunk of it in taxes.
Mr. Chidambaram, in his time, did his own bit for the salaried class. He is the reason they do not enjoy standard deduction, which was given to employees to compensate for the expenses incurred by them for which no separate deduction was allowed. Mr. Chidambaram discontinued it from April 1, 2006.
His highly innovative idea of starting the fringe benefit tax, levied on benefits given to employees that evaded the tax net, did not make him wildly popular among employers or employees. Later abolished, it taxed facilities like telephone reimbursements, and increased paperwork.
Mr. Chidambaram also gave some tax relief, but you can still hear demands being made to restore standard deduction.
These demands are mostly made by salary earners who yearn for the days of earlier finance minsters like Manmohan Singh, who had a sterling career as a salaried employee of the government, and Yashwant Sinha, who used to be an IAS officer before turning to politics.
Left to the salaried class, it would probably root for an FM who has been a salaried employee all his career, and paid income taxes, and will now end up paying taxes on his provident fund savings.