There are several lobby groups for industry which continuously indulge in advocacy for this large constituency. The government on its own initiative addresses, or tries to resolve, issues when it comes to the lower income groups under the umbrella of ‘inclusive growth’. But what about the middle class?
The middle class, which can be broadened to be called consumers, is one which gets affected on all fronts but does not find an utterance. Let us see how this shapes up. First, this class gets little respite from taxation and all changes in the tax structure end up increasing the burden or reducing the benefits. While it is hard to define this class, it is the one that pays the highest amount of taxes to the government. This happens in terms of both direct taxes as well as GST. As one moves up the income echelon there is a tendency to consume higher value products which immediately results in payment of higher tax rates. This can be consumer goods or services.
There is no protection like what is provided to farmers for instance where there are price support programmes. Further, this is the class which saves the most in financial instruments but pays the regular tax rates on the earnings on them. There are preferences in taxation to equity over debt which increases the tax incidence for these savings.
The second area where the consumers get affected are in the overt charges levied on several services that are used. The first thing which comes to mind is the convenience charge that is levied by airlines or the railways. It is........