INDIA is one among her peers recording a very low tax-GDP ratio, and the effective tax rate for the corporates have been sometimes lower than the income tax rates applicable to middle class income slabs. This low tax regime is a key mandate of neoliberalism as it is committed to unshackle corporate capital from the marred regulations that are meant to mobilise resources for subsidising the poor. Hence tax should be kept low to ensure greatest freedom for capital!

THE ministry of statistics and programme implementation has recently released the findings of the Household Consumption Expenditure Survey (HCES) conducted during August 2022 to July 2023. Household consumption surveys earlier were conducted every five years but the last HCES was conducted in 2011-12. In between one HCES was conducted and the report was not made public as that showed a decline in consumption expenditure which could have been a cause of embarrassment for the existing government.

USUALLY greater allocation for expenditures that directly impact the poor are termed as ‘populist’ by the mainstream media and ironically sops given to the rich in the form of corporate tax cuts or capital subsidies are considered to be prudent and responsible fiscal measures facilitating ‘efficient’ allocation of resources. In post-reform India this had been the usual narrative offered by the media to central government’s expenditure cuts during budget announcements.

ADVANCED economies had been worst hit by the financial crisis when real GDP fell in 34 out of 37 advanced economies of the world. The growth rate recovery was slow and it took about three to five years for most of these countries to get back to their pre-crisis levels. Some argue that western capitalism has entered into a phase of secular stagnation characterised by low private investment and declining productivity. Capitalism is a system driven by investments mobilised by capitalists in view of future expectation of profits.

THE euphoria on India becoming the third largest economy by 2030 or a 5 trillion-dollar economy soon backed by estimates by rating agencies assuming 7 per cent growth rate in 2026-27 and further, has been showcased as one of the great achievements of the current regime that seem to have exalted India’s position in the global scenario. To begin with some initial facts, India’s GDP in current prices is 3.39 trillion US dollars and in constant 2015 US dollar prices it is 2.95 trillion US dollars.