Indian car scene vs that of other countries – team-bhp gas lighting

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Our problem is not that our tax rates are high. Our problem is that the tax net is not wide enough and the government spends too much money to collect money. One can keep asking and hoping for lower taxes for everything but eventually the government needs to fill its kitty one way or the other. Those complaining about higher VAT or any tax that is levied at the time of sales should understand that indirect taxes (such as VAT or toll), are actually fair taxes because they are only levied on the person buying the product, rich or poor gas bubble. If government was to reduce its revenue from indirect taxes, it would have to resort to increasing direct taxes such as Income Tax/ Capital Gains Tax to fill the gap. Which as you know is paid by a miniscule % of the population. Which one would you prefer?

Also, the prevailing wisdom is that the middle class is paying for the rest of the country. This is not entirely true. Indirect taxes are paid at the time of sale gas constant in atm (whether you buy a toothpaste or a car) and these are paid by everyone. In 2017-18 the indirect tax collection was Rs 7.7 Lakh crore. The Direct tax collection was Rs 10 Lakh crores of which corporate income tax was about Rs 5 lakh crore and personal income tax was about Rs 5 lakh crore or about 28% of total tax collection. If we include state taxes, which are entirely indirect taxes, the contribution of personal income taxes to total taxes would be even lower.

The middle class also uses more facilities (we hog the roads toll plazas, park on the roadside for free, use water and electricity more wastefully and have a larger carbon footprint than the poorer classes). If you want to travel to Ladakh and Sikkim and post those beautiful travelogues, you will first need roads to get there (and not all of them electricity invented what year tolled). Our poor dhobi and maid is not making those trips and it is fair they don’t pay for it.

Complaining about poor infrastructure and nightmarish traffic and also about lack of very competent cars is like complaining about not having a 4K capable TV when there is no 4K content and broadband speeds don’t support 4K streaming. The super rich, when they buy airplanes for personal use, pay about 20% import duty, far lower than what buyers of imported cars pay. They grudge even this and try to import it as an aircraft meant primarily for charter purposes no electricity jokes, which attracts nil duty. One can never be happy if one doesn’t want to.

Middle East countries are the playground of the rich and the cars one sees there shouldn’t be compared. I haven’t been to the US, but have travelled to quite a few countries in Europe. I see plenty of utilitarian cars there (even saw Altos in small towns in Hungary and Czech Republic, Wagon Rs in Slovenia, outdated Fiats and Renaults in Italy etc etc). With the exception of Germany which has a significant population of Audis, Mercedes and BMWs for obvious reasons, other countries tend to have a good mix of all segments.

Also, the prevailing wisdom is that the middle class is paying for the rest of the country. This is not entirely true. Indirect taxes are paid at the gas what i smoke time of sale (whether you buy a toothpaste or a car) and these are paid by everyone. In 2017-18 the indirect tax collection was Rs 7.7 Lakh crore. The Direct tax collection was Rs 10 Lakh crores of which corporate income tax was about Rs 5 lakh crore and personal income tax was about Rs 5 lakh crore or about 28% of total tax collection. If we include state taxes, which are entirely indirect taxes, the contribution of personal income taxes to total taxes would be even lower.

You are a person after my own heart. You have written lucidly what I have been trying to say for years on this forum with limited success. The so called middle class on T-BHP but gas meter car actually the top 5% of the country’s income earners believe without data that they bear the brunt of taxation in this country. It is a myth they like to pound all the time because 30% or less of their salary is cut at source. They are unwilling to face the facts as it will burst their bubble of we the burdened who bear the brunt of all taxes.

In 1982 when I joined the work force at a truck maker one of my first jobs was to collate data to help the company’s management answer to the IAS worthies in Delhi as to why the company had committed the cardinal sin of producing more trucks than its licensed capacity in 1978 and why the company should not be penalized financially for it. So much so for helping the origin electricity login GDP. As a part of gathering this data I had to often talk to the plants at Jamshedpur and Pune and for junior flunkies like me there was one designated STD phone in the building where you queued up to make your call. And my starting salary was the equivalent of ~Rs 15,000 today after a MBA from a top school. And some of us grumble today!!

As for cars. If you measure quality and variety of cars available from 1982 to today and compare any 20 countries you will find gas utility cost that the quality of what is available has improved more in India than in almost any other country – the only comparables will be Russia and East Germany. And we can thank the license raj for a low base to start from. In a country with a greater population than the European Union and North America combined you will find the Maruti at one end and the S-class at the other. If you don’t like the so called watered down version don’t buy it but you cant bitch about it as there are others who need that cheapened version of Maruti Alto to improve their personal transport from four on a bike!

In 1982 when I joined the work force electricity grid uk at a truck maker one of my first jobs was to collate data to help the company’s management answer to the IAS worthies in Delhi as to why the company had committed the cardinal sin of producing more trucks than its licensed capacity in 1978 and why the company should not be penalized financially for it. So much so for helping the GDP. As a part of gathering this data I had to often talk to the plants at Jamshedpur and Pune and for junior flunkies like me there was one designated STD phone in the building where you queued up to make your call. And my starting salary was the equivalent of ~Rs 15,000 today after a MBA from a top school. And some of us grumble today!!

It is only a matter of time that basic safety features will become standard across lower variants. Our highways are always improving and making remote areas more accessible and fun to reach for every one. The facilities on the highways are so much better. We have indeed come a long way but the benchmark always tends to be other countries and not our own past. In another 20 years perhaps the current 20 somethings will feel gas gas we have come a long way