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EPF tax rollback: Modi and Co. respect the public opinion

Manoranjan Chaudhary by Manoranjan Chaudhary
9 March 2016
in Opinions
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Irresponsible statements, false propaganda and chaotic discussions have become the characteristics of Indian politics of late. The sanity is continuously being lost and profanity is exponentially rising. Amidst all this noise the good work done by the government is often dismissed and forgotten.

Young, younger and the youngest politicians of India are directly accusing Modi of being fascist, authoritarian and intolerant. The promising youth icon of India, Sri Kanhaiya Kumar while addressing a gathering in JNU told that he wanted to jump into the television when he heard Modi speaking about Stalin and Khrushchev, he also wanted to grab Modi’s suit and tell him to talk about Hitler and Mussolini. The angry youth icon of India, Shri Kejriwal had crossed all the limits when he tweeted referring Modi as Psychopath. In all other occasions, he has accused Modi being autocratic. The ultimate youth icon of India, Sri Rahul Gandhi has been the most appalled by Modi’s behavior. In one forum while addressing college students, Mr. Gandhi told, “Modi should realize that he can’t be the lone ruler in a country as large as India. He is not even consulting his own party let alone the opposition” Though when he overstretched and asked students if make in India and Swacch Bharat working, he got stumped. Banking on these statements a sponsored attack on the government is orchestrated consistently to create a false perception in people’s mind.

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Does Modi government not listen to its people? Below is a classic example. On 29th February 2016, Finance minister proposed to impose a tax at the time of withdrawal on 60% of the contributions made after April 1, 2016, to EPF. At present, the schemes by EPFO are tax-free under EEE. The move was taken to bring about parity in New Pension Scheme and other retirement schemes. The other proposal was to make withdrawal up to 40 per cent of the corpus at the time of retirement tax exempt in the case of National Pension Scheme. In the case of superannuation funds and recognized provident funds, including EPF, the same norm of 40% of the corpus to be tax-free would apply in respect of corpus created out of contributions made after April 1, 2016.
Quite expectedly the proposal came under attack from various employees unions, political parties and ordinary middle-class citizen. Seeing the unease, the very next day of the budget government issued a press note saying that there would be a revisit the proposal. Within two days of this assurance, a high-level meeting between PMO officials and finance ministry officials were organized to ponder upon the issue. Almost all the daily majors reported that Modi has himself intervened into the matter. Before the Majdoor unions and middle-class workers could think of chalking a strategy of protest, a news came that government will be looking for a midway strategy by sugarcoating the EPF tax withdrawal.

Quite contrary to the above reports and public perception, government announced a full rollback on tax on EPF withdrawal within 10 days of its proposal.

Moreover, keeping its intentions clear, they continued with 40% tax exemption on NPS, the first of its kind in the country in which market linked plan is non-taxable. Had it been possible if government act as fascists as the political parties and media at large recommend?

Action speaks louder than the word. The message is loud and clear that the government is more than willing to listen inside and outside the parliament and act accordingly if demand is logical. But the government can’t do much if it is attacked on the basis of abstract demands which can’t be quantified and totally based on perceptions like a rise in intolerance and saffronization of universities. The inability of government to establish direct communication with its people is helping the opponents to sow the breed of fear and mistrust but these bold steps will re-instate the people’s faith in the government.

Tags: #Budget2016Arun JaitleyEPF TaxModi governmentRahul GandhiUnion Budget
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