Tax cuts: “No Economist Would Call The Beneficiaries Middle Class,” Limited Impact on Growth

Press Release & Video: Tax cuts: "no economist would call the beneficiaries middle class"; limited impact on growth: Rathin Roy to Karan Thapar for The Wire.
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In an interview about the unprecedented income tax cuts announced by the Finance Minister in the recent budget, a former Member of the Prime Minister’s Economic Advisory Council has said of the 3.1 crore (31 million) beneficiaries “no economist would call them middle class”. Dr. Rathin Roy said they are the top 10% of the country and if they are to be deemed middle class it would suggest that the remaining 90% are poor and that would be a very sad and sorry indictment of India.
In a 25-minute interview to Karan Thapar for The Wire, Dr. Roy also spoke about the impact of the income tax cuts on GDP growth and said it would be “nothing dramatic”. In fact, Dr. Roy pointed out that the 10.1% nominal growth projection of the budget suggests that, if inflation is even 4.5%, growth next year could be around 5.5%, which is a percent lower than what is expected this year. He said it’s likely that the income tax cuts would help ensure that growth next year (2025-26) remains at the same level as this year. That, he says, rules out a dramatic improvement in growth.
In the interview, Dr. Roy raised other important questions about the income tax cuts announced in the budget. Not only did he question how the beneficiaries should be classified and the impact on GDP growth but he also raised questions about the cost of these income tax cuts and their justification.
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[@praveengogia555]

Always a pleasure to listen to insightful observations and comments of Dr Rathin Roy!

[@yennapallyvamshireddy3590]

Only private employees report actaul income. Government employees, politicians, small/ big business owners, Real estate brokers etc will always hide most of thier income and pay less taxes. Who is paying for crazy real estate prices if few people are earning above 12 lpa. That is the big problem.

[@princeofheaven19]

Yes my landlord in hyderabad with prime properties in Madhapur files a zero return every year. These so called economists of JNU just live on Sloganeering for the Poor

[@ajay5117]

Poor are already getting relief in terms of free grains. Middle class has been waiting for any significant relief since last 10 yrs, now that is also a problem for you people.

[@pritampaul3802]

@@ajay5117 complete biased analysis

[@ajay5117]

@@pritampaul3802 how much tax did you pay last year?

[@nitingupta-ku8zd]

thts left idology.. thy will not do anywork on thr own and will find issues in everything.. gdp wont increase , middle class is not thr.. all thr words..and thn they will go and drink wine at home .. mentally bankrupt

[@pritampaul3802]

Biased analysis by this journalist man.... These left minded people always find a way to criticize the govt on every occasion

[@saila8020]

Intellectual has to say something different 😅

[@noolsaalaram-7355]

Middle income people are the most taxed. Not given relief even for inflation for the last several years. They deserve some concessions and have been given something to cheer in a decade.

[@ajay5117]

Karan and Rathin should share their income tax declaration.

[@Insightful_Truth]

Yes, Rathin Roy has already done it.

[@KumarPallav01]

Our PM is aware of the fcuk up, that is why he asked Lakshmi: Tu hi dekhle, humse to na ho paega 🤣

[@AnirudhSingh-q717j]

"If these people are deemed to be middle class, then this means that everybody else in the country is poor." This is the truth. There are four layers of people in the country: Layer 1: One that lives like Bahrain Layer 2: One that lives like UK Layer 3: One that lives like Brazil [[ Layer 4: One that lives like Africa ]] The statistics and data on the standard of living in India - is NOT popular amongst the masses. The income and wealth disparities are alarming.

[@kartikkailas9123]

There are many more layers. Such a narrow classification is opaque.

[@AnirudhSingh-q717j]

@@kartikkailas9123 You can consider it like a theory (in-short) of the socio-economic classification of our society. A much more detailed description would have been unnecessarily long. 'Ek sayane ne kaha tufaan aayega'. (Rahgir)

[@iq14zero]

India is getting into a big mess it might never get out from. There is no long term plan vision. Very alarming situation we are living in.

[@ajaydandona4677]

I suspect that this tax cut has 2 objectives; first is the optics, which, is always a priority for this Govt(considering that CM Modi had positioned himself as a champion of the middle class and propagated the need to do away with direct taxes). Second and more importantly, the objective is to obliterate the old tax regime by making it entirely uneconomical for the deduction centric tax payer. As a corollary, the channeling of savings to 80C, home loans, PPF etc is being resoundingly disincentivicing. Objective is to steer all savings via SIPs into the Stock market(dominated by people of one particular State.

[@s.m.9803]

Lack of prosperity or poverty is mere word play. It does not change the fact on the ground! More than 90% of the Indians are poor, struggling to live with even moderate dignity. More than 80 crore Indians receive free food grains. No amount of word play can hide this fact staring in the face.

[@SmortSquirtle]

The most basic rule is as a country develops income tax increases and indirect tax decreases, but we are completely opposite 😂

[@RohanKumar-g1s5b]

Direct taxes should be abolished or should apply on income above 50l. While corrupt people like Robert Vadra evade income tax, salaried people are exploited.

[@SmortSquirtle]

@ Are you insane? 😂

[@sasanMS]

A large % of India do have income much above taxable levels but never accounted for because its black economy !

[@pankaj_yadav99]

Top 10% of India is middle class except .2% Ultra Rich. 90% is poor. It's is SAD but BITTER TRUTH😢.

[@THETRIVIALTHINGS]

Just another example of how nothing is what it appears to be under the current regime.

[@manojsuri007]

Yes..we tax payers fighting for tax relief are middle class. How can you term us as rich. We are nothing compared to adani, rahul, sonia gandhi, vadra and ambanis wealth.

[@RohanKumar-g1s5b]

these people work for corrupt gandhis and hate middle class. After ten years of exploitation we finally got something.

[@Insightful_Truth]

I think you didn't understand. You are rich compared to per capita income of India. Because you are rich enough to pay income tax

[@manojsuri007]

@@Insightful_Truth Perhaps you didnt understand that one person has to feed 4-5 family members..When you average out it becomes indias per capita income. Not everyone in the family earns. So we definately are not rich.

[@Insightful_Truth]

@@manojsuri007 You are still not understanding. Are you among those 80 crore Indians who depend on free ration from government?

[@manojsuri007]

@@Insightful_Truth Those come under poor. We come under middle class. Govt. is giving us relief because they dont want us to become poor. You should have no problem with that.

[@k2712m]

Like it or not, we are heading towards more inequality since 1947. Our native rulers were content with receiving Baksish from the West thereby neglecting importation of technology and raising the living standard.

[@subhendugiri5018]

10:48, worth to listen this man, so practical view. 21:00, good for politics bad for economy. 22:06, true, people can pay more tax if income is increasing which is not. So, govt is giving tax relief, not bad economics but economic failure. This can be bottom line. Govt will certainly make balance by raising few other tax or GST from common citizens. BTW, it is fact that yet mostly such taxpayers would be IT or Private employees not govt employees or business persons or corporates or doctors who follow many processes to escape taxation by having CA or don't submit actual ITR.

[@paragvaishampayan9501]

Introspective well said 🙏

[@saurabhk29july]

Would have been good of Mr.Roy and The host to discuss potential solutions to the problems rather than just highlighting shortcomings or issues in the budget

[@praveenmg2106]

This is what they are good at..they don't have solution neither thay are happy with what govt does

[@rajasingham4793]

Funny I just met a guy from Haryana who says he was a Bank Manager who was earning 55000INR per Month so who in India gets to avail the 12 lakhs no tax bracket

[@MrKiranhirulkar]

Why should only 31 million pay taxes for the remaining 1.4 billion, and get nothing in return..

[@sunandanrao220]

I hv been watching interviews of most of the economist and their views suggest that even this time our govt has not come up with budget which will help poor population or farmers or labourers or creating jobs or employment or helping MNREGA workers or boosting Health and Education sectors. Moreover its not going to help middle class as well. So it again proves that this budget is only for benefiting the rich and the richest. Well done Modi. Keep it up.

[@_aakash_joshi_]

It is crucial for any government in power in our country to prioritize eliminating corruption from the education system and ensuring access to high-quality, free education for all. Gradually reducing the gap between different schooling systems will also help curb the influence of the education mafia. These efforts will lead to a more skilled and tax-paying workforce, which can contribute to economic growth while reducing income inequality. The taxation changes should also happen with such vision and action.

[@soyebganja8632]

Thank you sir ji ❤

[@cyclopes968]

Dear communist millionaires, Come to reality, those earning even 50 lakhs are finding it difficult to buy homes and dont dine in 5 star hotel. And you are saying those who are earning 12-24 lakhs(tax cut beneficiaries) are going to import and dine in 5 star hotel.

[@sarabjits7679]

Delhi politics has defined budget economics. Announcement of pay commission , “ MC “ IT relief - all point to it. But most of us are loving , accepting it and politicians will keep flogging

[@mazhab77]

Like Shekhar Gupta said, the middle class is married to their decade long electoral mistake so expect no changes.

[@ABHYUDAYSARKAR]

What do you mean? What mistake? Governments change regularly.😊

[@vipuls5900]

You can't be always negative. Its just not in good taste unfortunately. If this had come from congress, you would have pivoted it differently. You need to be impartial

[@rajuiyer6753]

Is godi media impartial.

[@udayabose2357]

What about those who "show" agricultural income and get away with loot?

[@znc5200]

You don't understand. Modi ji is going to bring back lacs and lacs of Vishwagurus from USA and other countries (I am not referring to the forced deportations), who would be paid in multiple of Rs 12 lacs and thus they would not only bridge the gap of tax exempted 1 crore odd people but would also fuel the economy to Make India a 10 trillion (or ton) Economy. Don't underestimate the power of Vishwaguru.

[@alokgupta4200]

1. A structured debate between proponents and critics of Budget 2024 would be insightful. 2. India is already the 3rd largest economy in the world in terms of GDP based on Purchasing Power Parity (PPP), behind China and the United States. 3. 100% Indigenous Procurement by GOI can boost domestic industries, create jobs, and strengthen supply chains.

[@jyo-gy5me]

RIGHTLY POINTED OUT - DIRECT TAX STRUCTURE IS NOW BASED ON PROSPERITY, NOT POVERTY, which is in my opinion fair bcoz otherwise people will loose motivation to prosper which will ruin the whole development story. However the real pressing issue country face now is the falling rupee. If the govt fails to wake rupee back from the grave, even a 12 lakhs wont be sufficient for a decent life. India being trade deficit nation ( close to 30 billion USD) it is extremly dangerous for rupee to stay under 70/usd levels. Further slippage is very likely jeopradizing our imports. Any income in rupee terms wont ensure prosperity.

[@gagananand91]

Why is it dangerous for the dollar to stay under 70rs?

[@harsharip]

Even if taxes are not changed, we would be having this conversation Even if taxes are reduced, we would be having this conversation Even if taxes are increased, we would be having this conversation

[@newyorkskier]

Truly alarming

[@MrSatadal]

Before budget 2025 Poor pay NO income tax, gets NO service Middle class pay tax, gets NO service After budget 2025 Poor pay NO income tax, gets NO service Middle class pay NO income tax, gets NO service. Equality 😂

[@harshvardhanbharti8700]

Well, it's the person's responsibility to increase his income , not the government . I comes from SC family and nobody in our family has used reservation but still we worked hard and run a successful business but here people are just living in the false dilemma of blame game and accusing everyone but themselves and neither they focus on their self improvement to earn more . People just know blabbering without any actual work and hide their own faults and failures and tagging them on someone else like in this case 'govt and corporates' . There is literally hundreds of books explaining why rich is richer and poor is poorer but nobody got enough time to read them because they first need to accept their own faults and failures in order to act upon them

[@narsingraokunchum5660]

Good most informative

[@ultraullu]

Most that can have some saving and in a position to invest in stock market are those above 6, 7 lakh ,mil tax limit of previous regime. So the government focus is to help corporates profit nothing else

[@adroitspartan7907]

07:34 - Roy remembering another water sipping event from an infamous guest on Thapars show.

[@beigh_e_tanulhind2315]

*Love from.Ladakh Kargil sir*

[@sourabghoshal7532]

So anyone earning over 12 LPA is rich now what’s next Swift is a luxury car

[@VeerkantSingh]

Irony, person earning rs 42 a day in city is not poor 🤔

[@acchatt]

No talk at all about introducing Wealth Tax and Inheritance Tax at the highest income levels or is that coming soon 🤫

[@zahidmaqboolmir9780]

If Rs12.75 is exempted then why are these slabs starting from 4 lakh. This is absolutely ridiculous

[@sandeepshah105]

The slabs are for people who earn more than 12.75 lakhs.

[@sohambhatt9486]

If only one person earns in a family of 5. Isn't it logical to keep exemption limit 5 times per capital income?

[@sandipmore814]

@@sohambhatt9486 at least wife plus husband

[@rameshrajagopalan9600]

Dear Mr Karan To get more insider stories and absolute facts about corporate tycoons,you should interview and interact with Internal Auditors

[@kuldipsurisViews]

Thank you Wire Team... For giving us clesr perspective of the economy..

[@ChinmayPatil23]

Poor are already getting relief in terms of free grains. Middle class has been waiting for any significant relief since last 10 yrs, now that is also a problem for you people.

[@mandarp9472]

When you consider cost of housing in Metros, 1 lakh per month salary is nothing. 1 BHK house iin Metro is not less than 60 lakhs and EMI of at least 55 - 60,000 per month. Then there are education cost with per child cost of 8,000 per month and rising healthcare expenses & healthcare insuranve costs with inflation of 15%. With housing, healthcare and educatiom costs, middle class earning 1 lakh is left with small amount to save & invest for their own retirement.

[@lumlangmaring724]

Increase budget allocation for MNGRAGA by 100 percent. This is a very good scheme. It will solve rural unemployment, improve rural infrastructure, money in the hand of the poor, solve urban migration to a large extent and finally increase in consumption which will have a cascading effect in the economy. Clearly this budget is to please the people of Delhi at the cost of the poor of the country. Next year believe me tax exemption up to 12 lacs will not be there.

[@neerajsinghbhar966]

It is going totally waste ,no work done by these workers,they r getting this money for free, and because of that there is shortage of labour for farm work and it is also become costly,, ultimately farmers are getting burnt of it,

[@jishnubiswas7912]

India’s manufacturing industry is growing negatively, the benefit of income tax cuts likely to go to the exporting countries to India

[@rajenlama.6850]

Jai Hind sir, it is true that majority of indians are lacking prosperity and high inflation is a matter of concern to the growth of GDP..

[@ajsujit]

I feel like there should be a flat tax rate.

[@roshanlal1740]

We should go back to progressive taxation ? Corporate sector despite abnormal increase their income are not paying proportionate tax.

[@sreenii5445]

Karan Thapar and The wire have the unique ability to spot and identify disgruntled ex Modi team members and get their views which are obviously critical of the government. This same guy was with PMEAC and singing their tunes as long as it suited him and when kicked out his heart began to melt for the poor and downtrodden and now thinks of MNREGA kind of things. Mr Karan can interview Shamika Ravi next as both went out at the same time.

[@ultraullu]

10 percent earn more than 25 k . So people earning exemption limit may be less than 5 percent

[@mohithpm4954]

Not even 2.5 % 😂

[@MARKCRASTO]

Less than 2%. Maybe about 1.5% ​@@mohithpm4954

[@wasimsiddiqui8732]

nice video

[@Kalyani-c9b]

Where they can save to get to 2% interest in bank??? Meaningless, whoever private working class people don't get any provident fund for their old age and for their health issues apart from spending to raising up their kid's to spend for their education and to fulfill their small wishes, at the end of old age whether they need to dependent on others for living, so much debate on 3 crores people for 5 lakh more wavaier of tax because already 7 lakh already no income tax. Anyhow 5 lakh wherever they invested or spend they pay taxes. Focus on ants and leaving elephants. Elephants stampede ants easily. Reduced job opportunities already reduced 12 lakh earnings

[@AnilKumar-hd3pb]

Stop complaining about the tax cuts given to a class of people who have got this for the first time. Stop giving freebies. Make people work. It will enentually increase the tax base. Most People who were paying income tax all this while are hardworking and honest folks who all this while didn't ever get much from government

[@blackmagic5343]

'Vicious' BJP have only one agenda, to win any election; be it Lok Sabha, Vidhan Sabha, municipal/panchayat. Even school/college elections ;) Thus, the budget/tax relief is to supposed to appease Delhi and Bihar crowds. Of course, moving everyone to new regime maybe another aspect of it. That said, these so called opposition journalists/economists try to inculcate that the whole tax relief would have huge negative impact and earning twelve lakh income are not really middle class. Someone layman, like me, wouldn't/shouldn't buy this stupid analysis and comparison with other economies. Those four crore people are households and would easily translate to some twenty crore population. And, this is a significant number. Now, the whole 'blah' 'blah' 'blah' is about growth. "Money in the hands of people" will always have positive impact than government imposing taxes and spending them on stupid schemes in corrupt country like us. Of course, income tax is progressive tax and certainly section 87A rebate up to 12 lakhs are bad choice. Instead, have them pay some tax. Honestly, indirect taxes, such as GST, VAT in petrol, cess etc. need to be addressed/reformed as all class people are affected. BJP bakths would argue that GST is outside of union budget. But, at the end of the day, all are just financial bills! Back to Karan Thapar, his allies, his fanbase...remember, couple of rs. increase in oil and food price "at the hand of consumers" would easily cancel out this 87A rebate. Friends, these publicly available macro data are easily comprehendible by the average person; do not go by these propaganda numbers and half facts bs presented here. Adios!

[@rajnishtiwari6515]

You need to do a factual analysis to find out who are these people paying major portion of salary based tax. You may call someone earning 50 K a month in a remote town of a state as affluent or above middle class , same person can not even survive in mumbai or bangalore with that income .Why dont you then put a cap on everything ranging from rent ,food to education,medical bills and then no one will complain about paying tax you can take 50% as well but make everything free for them.

[@mohitsingha1809]

Estimated tax loss is Rs 1 lakh crore, this is about 0.3% of GDP.

[@vikramdoshi6890]

Dr Parkala Prabhkar also

[@srinivasrao369]

Very true how many earn1 lac + a month in India A few How can they be called middle class

[@srinivasrao369]

Just fooling the real middle class

[@SDX2000]

@@srinivasrao369 they are not in the middle class. They are poor. This is the reality of India. Wake up.

[@sandeep73271]

Don't give them benefits bez they pay tax.. how stupid is the interview... basically oppose anything what gov does

[@taukeerahamadkhan5270]

❤❤❤

[@zahidmaqboolmir9780]

We will payoff our loans

[@LakhwinderSingh-bm2bl]

Wire is the same one from whom the court had imposed a fine for writing a false article on corona

[@ramananvenkataraman4594]

Useless gripe

[@RichaSahu-b6k]

If IIT nit engineer doing btech in mechanical electrical Doing software AI model after passing They are neither engineer nor graduate Open multi-speciality healthcare immediately in all 9000 engineering college Will serve country more than producing non graduate engineer software clerks GOV must intervene

[@ChinmayPatil23]

12 lakhs is nothing in metro if this is not middle class then what. please stop this nonsense do you also believe that those earning 12 lakhs are rich then try living in metro with 12 lakhs on no sorry 80k after taxes right as per you

[@counterpoint9260]

why dont you interview krishnamurthy subramanian? he will say this is the best budget

[@babupaily1656]

🙏👍

[@saumitram]

These people create their own economics priinciples as per their inclination towards particular ideologies

[@gotitsingh13]

always complaining , hell if you do, hell if you don’t. Well, wait for your turn when things happen according to your morals and political opinion.

[@fazzperl]

Income Tax slabs must be: 0 to 1 crore (0%) 1 to 2 crore (10%) 2 to 3 crore (20%) 3 crore + (30%) GST slabs must be: Items costing 0 to 10 lakh rupees (0%) 10 lakh to 1 crore (10%) 1 crore to 10 crores (20%) 10 crores + (30%)

[@sandipmore814]

Govt will bankrupt We don't have problem with paying tax It's what we get in return

[@sanjivgupta1418]

Nay sayers are interesting people, irrespective of whatever you do or choose not to do, they always are in disagreement.

[@AnirudhSingh-q717j]

Fiscal deficit numbers should be explained as a number out of 100 (percentage). Different bifurcations. It is expressed as a percentage of GDP. Even people with basic financial knowledge don't take it seriously (or they themselves don't know or ignore it).

[@AnirudhSingh-q717j]

Fiscal deficit "as a percentage of" GDP is NOT understood by many or simply ignored. (Earlier Incident of Similar Nature: It was 300 tons, and NOT 300 Kg. 300 tons means 3 lakh Kilogram (3,00,000 Kg). 1 ton is 1000 Kilogram. People still say and think that it was 300 Kilogram.)

[@shrestaassociates4063]

Emi and gold loans are to middle class

[@truemonk1]

Karan- criticism is warranted if the issue is genuine . Unnecessary perpetual ranting about even the good steps that are being taken deems that either you have a personal grudge with the government or you enjoy being paid for it . All govts are mediocre, so save some grace for yourself .

[@adityabanerjee7145]

Well if someone is 35 and earning 10 lakhs per annum and is not called middle class...what will you call him/her....upper class, poor class?...both sound odd right

[@almostinfamous42]

Very definitely upper class. Earning 20k a month puts you in top 10%, earning close to 1lpa is in rarefied air. You may not think so because you only see those who are earning more (and spending more)

[@SDX2000]

@@almostinfamous42 If this is the case then the bottom 90% is actually poor. This is the right conclusion.

[@princeofheaven19]

@@almostinfamous42 1 LPA is not rarefied air. When i was making 1 LPA my barber remarked that he himself was making 70k and also taking free ration.

[@theexposer9483]

I don't listen to you anymore because I consider you are having sick mentality. Your video has been put to me KZbin algorithm not by choice.

[@varunbhattad3112]

Such a biased interview

[@dileepkunche]

Make bulshit to blam the guy you don’t like

[@vinaygupta6486]

Hi

[@ashoksinghal5620]

Very strange interpretation. 10% of Ibdia would be 14+ plus crore, and calling them elite? True elites would be less than 5%. As for tax exemption limit vs GDP, most tax files have families ( abt 4) so GDP per family need to be compared with Exemption / rebate level. Besides this sector is mostly excluded from Quotas and Govt benefits, so need to spend large amount on education and health. 12 lakhs in cities don't mean much in urban areas where most files belong to.

[@noorulameen7478]

Yes true. Income tax should be calculated based on number of dependents in family

[@Openmind-on4kx]

Abolish income tax. Income is earned not looted. Inequality in taxation shall be tackled. Income inequality is not the problem, injustice and inequality in power are real problems.

[@dubdq3844]

I feel GST is worse. It harms the consumer very badly, we need better wealth taxes on the rich. But even there they will find the most creative ways to escape. The solution previous RBI governer Raghuram Rajan gave was 'Do the communist revolution', I quite like that lol. But if you are gonna have taxation, NO GST more direct taxes. It has been the opinion of many that GST boosts income inequality and wealth inequality. There was a report by Kalyan Singhal. In my opinion both extreme wealth consolidated in the hands of the few and tax are theft. Under capitalism, taxation is a necessary evil. Which brings me to the point that inequality in power is generally in service of the inequality in wealth and income, the land grabs by Adanis gujarat could only happen by the complacency of Modi's government there. Remember Indian elections are the most expensive in the world, it is only the voice of the rich and exploiter class that is mainly heard in parliament and the bills they pass. That is why the government instituted tax cuts on the wealthy from the beginning and loves the phrase 'easy of doing business'.

[@Openmind-on4kx]

@dubdq3844 socialism and cammunism are evils and source of inequality in power and injustice. Monopoly of few is socialism. Wealth in hands of few politicians and bureaucrats is the manifestation of real hell. Free market economy is the only working economic model. Capitalism is inevitable in a free open society. Chronis are by product of socialism and cammunism where licence system helps chronis and socialist politicians to loot people.

[@DharmendraRaiMindMap]

Is Rathin rattin ?

[@kuldipsurisViews]

One should be cordial in one's conversation...

[@vethaiyabalasubramanian]

True. Most commentators lack the simple civic sense and respect for each other.​@kuldipsurisViews