No Relief To Salaried Middle Class While MPs To Take Away Double Their Salary

Bharat Nayak

February 2nd, 2018 / 10:49 AM

Image Credit: Arun Jaitley

It’s 2018 and yesterday was the last budget announced by the present government. On April 20, 2014, current Finance Minister then campaigning to win Amritsar Lok Sabha constituency demanded to increase income tax slab from Rs 2 lakh to Rs 5 lakh.

He said, “Direct Tax should be reduced. If the Income Tax limit is raised from Rs. 2 lakhs to Rs. 5 lakhs, 3 crore people will save Rs. 24 crore which will lead to a small impact of 1 to 1.5 percent of the National Tax Fund. Due to this, Trade and Industry are running under loss and closing down, and production has become costly.” He attributed this as a reason why countries like China and Thailand are moving ahead of India.

Jaitley further added, “The savings in the pockets of an ordinary person by reducing ceiling on Income Tax will lead to increased purchase which in turn will lead to increased VAT and Excise Duty thereby increasing the revenue“.

Though Jaitley lost the election, he went on to become the Finance Minister of our country, a position where he could have actually followed what he said and decreased the burden on Indian middle class.

Four years down the lane, yesterday’s budget proposes to increase the cess on income tax from the current 3% to 4%. This will increase the tax payable by all categories of taxpayers. Due to this change, the tax liability for the highest tax bracket (assuming Rs 15 lakh income) goes up by Rs 2,625. For middle-income taxpayers (between Rs 5 lakh and Rs 10 lakh), the tax liability increases by Rs 1,125 and for lowest tax brackets (Rs 2.5 lakhs to Rs 5 lakhs), by Rs 125. (Source: The Economic Times).

In spite of not fulfilling his promise and doing the exact opposite, FM Arun Jaitley was at least generous with false assertions directed at the middle class. Yesterday, he said, “Step by step, in every budget, I have been putting surplus money in the hands of the middle-class taxpayer.”


While PM thanked Arun Jaitley for giving tax relief to salaried middle class and making their life easier.

Not everyone is unhappy

Contrary to what the middle class makes, the salaries of MPs is proposed to be doubled from Rs 50,000 to Rs 1,00,000.



In 2018 budget, Jaitley also proposed to increase the Constituency allowance to Rs 70,000. Additionally, he said that MPs salaries will be automatically revised every five years indexed to inflation. The emolument (compensation received by virtue of holding an office) of the President will be revised to Rs 5 lakh per month, of the Vice-President to Rs 4 lakh per month and the Governors of states to Rs 3.5 lakh. The only positive aspect of this move is that MPs who were earlier in power to recommend an increase in their own salary will no longer be able to do so.

However, being the Finance Minister, Jaitley should know that inflation affects common citizens too, including salaried middle class, yet he failed to increase the IT slab to Rs 5 lakh. Guess we should now wait for him to raise the tax slab issue in the 2019 election campaign (and forget about it after coming to power).


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Edited by : Pooja Chaudhuri

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