Indian Economy: News and Discussion

[ezsasa]

Bhaiya, wahi to problem hai.

This is a double edged sword.

Eventually, the more this extravagant welfare schemes are expanded, the more the taxes will have to be raised to pay for them.

But will you really be okay with it? Ask yourself. If there is for example, a 70% tax rate. You earn, for example, 100 Rs a month. Will you really work if the government is going to take away 70 Rs and you get to keep only 30 Rs of what you earned? And then give it to Sullas or MSPjeets?

This is already shown by a concept called The Laffer Curve.

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The Laffer Curve illustrates the two most important things we need to know about taxes: how much money the government can raise from taxes and at what level of taxation the government might start getting less, not more, revenue.

The Laffer Curve is illustrated by a two-dimensional graph. The horizontal line is the tax rate that the government chooses, and the vertical line is the revenue that the government receives from that tax rate.

First, because zero times any number is zero, if the tax rate is zero, then the government receives zero revenue. Accordingly, zero-zero is the first point on the curve. Now suppose the government chooses a very small tax rate, say 1 percent. The government will then begin to receive some revenue from citizens. Now suppose the government charges a 2 percent tax rate, then everyone would agree that it will receive even more revenue. And if the government keeps raising the rate, then revenue will continue to go up. At least when we’re in the low-tax-rate part of the graph.

This means that if we fill in the curve, it has an upward slope -- at least when we’re in the low-tax-rate-part of the graph.

Now suppose the government charges a 100% tax rate. If this happens, then no one would work. That is, why would anyone work when the government is going to take all the money that they make? And if no one works, the national income would be zero. This means that government revenue would be 100% of zero, or zero.

When you complete the curve, you'll see that the curve must have a hump. This is simply because the revenue line has to go up in the low tax-rate part of the graph and has to start going down to reach the point at the 100% tax rate.

But if the curve slopes downward it implies something remarkable -- something that few of those who push for higher and higher taxes want to admit. It means that when tax rates are high, if you make them higher, you’ll actually bring in less revenue to the government.

what are the example of two extremes available today?

one side being small arab states like kuwait where there is minimal or no taxations on personal income, what's the other side of this extreme?

 

[tsunami]

By putting 30% on crypto they have legalized it.

 

[Haldilal]

By putting 30% on crypto they have legalized it.

Ya'll Nibbiars its assest but not a currency. The Regulations still needs lot of works.

 

[Knowitall]

The Budget math: For every rupee in govt coffer, 58 paise to come from taxes

For every rupee in the government coffer, 58 paise will come from direct and indirect taxes, 35 paise from borrowings and other liabilities, 5 paise from non-tax revenue like disinvestment and 2 paise from non-debt capital receipts.
GST will contribute 16 paise in every rupee revenue, while corporation tax will contribute 15 paise to each rupee earned.
The government is also looking to earn 7 paise for every rupee from Union excise duty and 5 paise from customs duty. Income tax will yield 15 paise to every rupee collection.

Bruh the fact that people are still tolerating this shows us how peaceful our overall society is.

 

[another_armchair]

what are the example of two extremes available today?

one side being small arab states like kuwait where there is minimal or no taxations on personal income, what's the other side of this extreme?

Kuwait has oil.

Unless Digboi(Assam) is declared as an independent country, oil prices are market linked and is run like Kuwait.. else it wouldn't be a fair comparison.

 

[ladder]

LOL.. you pay 18% GST on vehicle insurance too. How come you never noticed all this during the UPA era when food bills attracted almost 15% service tax?

Though Govt. brought food under 5% bracket, have restaurants passed on the benefits ? The popular ones make a lot of money even though ITC has been removed from the food business.

I am a poor fella, don't own a vehicle ( billa hat on).
Didn’t dine at AC restaurants, so no service charge.

Jokes aside, I mentioned about the medical insurance premium because the topic was pseudo-obamacare for India.

 

[Haldilal]

Ya'll Nibbiars Clarity on income tax is a huge positive step for the crypto industry. This also removes any fear people had about the impending ban. We now know that the government is definitely inching towards regulations in this sector.

 

[ezsasa]

closing this loop.
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Ya'll Nibbiars if the Defence budget is not increased to the 80 billion dollars then I will apologize on the budget day. @ezsasa nibba mark this posts. I never get back on my promises.

No apologies required. So 6 lakh crores from existing 4.78 lakh crore, more than 20% hike. let's see.

 

[Haldilal]

Ya'll Nibbiars

Budget trust based governance to build atmanirbhar bharat. Reposes faith in taxpayers, entrepreneurs, investors. Build an open, digital and inclusive India with a 25 year vision.

Uday Kotak.

 

[Haldilal]

closing this loop.
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Ya'll Nibbiars 5,25,000 crores 70 billion dollars not bad, but still short of 6,00,000 crores.

 

[doreamon]

Wow .. thats some good news

 

[Haldilal]

Ya'll Nibbiars

Sometimes boring is good From a market, investor/trader standpoint nothing has changed so this will largely play out as a nonbevent for the stock markets. It's a positive step to see that this budget will take steps to regulate virtual currency. While how this will be implemented will determine if establishing a CBDC will result in less expensive currency management and a boost to the economy as a whole. International cues have been positive over the last 2 days, and we seem to be following them for now.

 

[Haldilal]

Ya'll Nibbiars The The extension of ECLGS scheme is a good move for MSMEs. The credit and fiscal support of 5 lakh crore will give a huge boost to this sector encouraging new businesses to come to the fore. This announcement will certainly generate more than 10 lakh of employment opportunities in a short span of time. However, a slight focus on easing the trade and the taxation policies for MSMEs facilitating more freedom to do business was also expected from this year’s budget announcement. But that didn't happened.

 

[HariPrasad-1]

i thought fastest growing city of india is somewhere in kerala surat btw is also bound to become a megacity

i thought fastest growing city of india is somewhere in kerala surat btw is also bound to become a megacity

The world's 10 fastest growing cities are all in India

Based on annual gross domestic product (GDP) growth, cities in India are powering ahead of other urban economies.

www.businessinsider.com

.

 

[Optimistic Nihilist]

what are the example of two extremes available today?

one side being small arab states like kuwait where there is minimal or no taxations on personal income, what's the other side of this extreme?

There are quite a few, Scandinavia in general.

Sweden, let's take that.

In Sweden, the personal income tax of roughly 32% is just a small part of the total picture. Employers pay 31% on top of that (money that could otherwise be paid to you), and there is an additional 7% national pension tax, and a 25% vat tax. Net disposable income in Sweden is 9.4% lower than in the US, despite higher gross average incomes, and the cost of living is higher, overall. Their taxes are far less “Progressive” than in the US, with middle and lower income people paying a much higher percent of total taxes.

This has occurred in practice historically as well. For instance, during the Great Depression, when Congress passed the Hawley-Smoot tariff bill, although the bill raised taxes on imported goods, the revenue that came from those taxes actually decreased.

 

[jackprince]

Truth be told, tax benefits are useless.

Govt. should start offering services to the middle class at attractive/affordable prices.

Someone said Rs. 1.5 lakhs is a lot of money. LOL... 30% income tax.. wo bhi TDS.. to save on that, you invest here and there.. resulting in lesser cash in hand... then comes house rent/emi... which is seldom less than 20-30k a month.. add food and other expenses.. add petrol.. kids education with bus fare easily goes up to 1.3-1.5 lakhs.

God forbid, if there's a medical emergency and insurance doesn't cover it... for example a cousin had a serious health issue and was on ventilator for over a week.. they ran a medical bill of almost 14 lakhs... fatt ke darwaja ho gaya tha. That 1.5 lakh a month you make is not a lot.

We need a cashless health cover for the middle class. We all have been shafted left right top and bottom by medical insurance companies. For critical diseases, they drop cover or simply stop renewing the policy. Sudden medical bills are a big PITA for the salaried middle class and it wipes out savings regardless. Medical charges + children's education are the biggest drain for the middle class. If this was somehow subsidized or was guaranteed, then a good number of those hatchbacks on the road would be replaced by MUV's by the same middle class.

I don't know what your economical condition is. But, for guy like me who on his own makes ~12 lakh per annum now, the 1.5 lac in 80C and the saved amount of 47K in I Tax is quite a big number. The 80C has helped me to build some savings at the beginning of my career when I didn't understand much about investment and even to this day through PPF, it is helping me to build a cache to fall back on.

For cashless healthcare, you need to get insurance. If we start on the way of Obamacare, our whole healthcare system will collapse. In a long run nothing that is fully controlled by Govt. can ever give better service than a private enterprise. The lethargy that is inherent to Govt. is not unique to India, but the basic fact of human society.

I pay almost 1.5 months' salary in Income Tax when my friends who have businesses and make equal or more money, pays not even half the ITax that I pay. I know it is normal for the salaried class to get effed. But, when can we get some reprieve? The FM doesn't even care to give a token gesture!

I don't know what she is aiming for. May be you guys do.

 

[Haldilal]

Ya'll Nibbiars many of you could be puzzled by the expenditure budget.

Explained the term in simple words.

It offers a complete picture of the government’s expenditure in any financial year. This exhaustive document tells us about various types of outlay and reasons for the variations in estimates. It shows the funds allocated for disbursement to the different ministries and departments during a financial year. These allotments are made under plan and non-plan estimates.

 

[Suryavanshi]

what are the example of two extremes available today?

one side being small arab states like kuwait where there is minimal or no taxations on personal income, what's the other side of this extreme?

 

[Akula]

Wow .. thats some good news

Government has to look into inter department rivalry or stupidity, due to which Train-18 was almost on its death bed.

 

[hit&run]

Ya'll Nibbiars Clarity on income tax is a huge positive step for the crypto industry. This also removes any fear people had about the impending ban. We now know that the government is definitely inching towards regulations in this sector.

Finally someone has spoken in right perspective. The taxation on crypto means recognition of crypto. The coins are up average by 5% after this news.