Among the hazards of travel to distant and prosperous lands is the illusion that change in India can come about if only measures adopted there were replicated in identical detail in this country. For long, those within the official machinery, who are in charge of the finances of the country, have been in thrall to business school doctrines developed for economies very different from what is the case at home, and yet they insist on the same prescription kit as was worked out to fit very different conditions. A brilliant lawyer known to succeed even in difficult cases, former Finance Minister P. Chidambaram frequently waxed eloquent on the “relatively low direct tax burden” in India as compared to countries such as Sweden or even Canada, forgetting the fact that in these and similar countries, the taxpayer is cosseted from cradle to grave, rather than being abused the way he is in India. Prime Minister Narendra Modi is seeking to improve the almost inexistent social security net in India, especially for the underprivileged, and such an effort has not come a second too soon, for the taxpayer in this country gets only bad governance, indifferent health and education facilities and a very patchy law and order situation as compared to the countries whose tax rates are being juxtaposed next to India’s. Ours is a country where a professional with, what by international standards is, less than a middling income, has to pay taxes and cesses of more than 30% on much of that, besides an effective Service Tax rate of 15%. Of the balance 55%, more than half goes back to the exchequer in the form of indirect taxes, thereby leaving around a third of income as the share available to the taxpayer for his own use. Only those with immense black money hoards, a category that includes several of the officials and politicians in the country, are content at such a tax structure, in place of the “Low Tax Gentle Compliance” regime essential to lure tens and hundreds of millions more into the direct tax net. Hopefully, PM Modi will ensure just such a regimen before the end of his first term in office in 2019.
Another field in which yardsticks suited to rich countries but counter-productive in India are being relied upon with reckless abandon is the environment. By far the biggest polluter is poverty, which is also the most important violator of the basic human right to have adequate healthcare, housing, food and education. India cannot afford several of the measures that are standard in countries that have per capita incomes twenty times the size of this country’s, and yet these are being insisted upon by advanced countries and the numerous agencies and NGOs following their agenda. Hundreds of projects are being blocked in the name of environmental clearance, and even if these be secured, there is still the gauntlet of the legal system. The bar for registering a case is so low in India that only a cleverly argued postcard is needed to ensure that a project, which could have employed hundreds, gets stayed for years, if not decades. It is all very well to command that India should follow the same parameters as countries that have entered a very different stage of their development cycle. This country needs 10 million, perhaps as much as 13 million, new jobs a year to absorb the swelling number of its young, and setting up the facilities needed to ensure this may sometimes result in environmental outcomes that are some distance removed from the grass-green conditions demanded by climate change evangelists. However, the option to such production and occupation increases will be a jump in joblessness and poverty, and a likely slide into chaos for the country. Which is why those involved in decisions affecting millions need to understand that India is not Sweden or Canada, and that the most deadly threat to the 1. 26 billion people of this country is poverty.