so disy money is not available with a large number of the middle class and that're in deep paying and I think they're very angry and upset and tax terrorism is rampant in Industry disputes have gone up from 4 and half lakh cres in 2014 to 12 and half lakh cres in 2024 as for the budget figures and there's no ease of doing business along with that I think we got to re the tax slap chamaram gave us three slaps Nala sitan made it seven she made it 56 they should have fiddled with the slaps and do the small small things very irritating in this country 1 billion people live on less than uh $1,000 a year the balance 400 million leave on $66,000 that's is about 3. 4 trillion right and out of that 400 million 100 million get more than $10,000 and the 300 million get $5,000 and if add it up again 3. 5 if you segmented so the pain is largely in the in the 400 million people who are the middle class we putting the silly popcorn tax remember three different kinds of popcorn popcorn with this Finance Minister spent a lot of time explaining why the popcorn tax it is ridiculous you know the biggest failure has been the the the the the tax authorities are extractionist in their approach that's the nature of the Beast and what is so big about reducing GST on medical insurance for 60 people about 60 what is the big deal it's a very simple matter which can be finished in one day they're going round and round and round and round and harassing there is great anger the anger is simmering because the last 10 12 years the middle class has B the burden of all the taxes burden of all the changes the quality of a life is poor in many cities we can't even breathe fresh air there a failure but there's the water is difficult traffic jams are there because they're not invested in public transport where is public transport people buy cars there are no roads in Bangalore roads are all Port we don't have enough buses I mean crazy also the problem is uh Mrmiddle class is getting nothing for it and as a consequence we're seeing anybody who possibly can is moving to places like the middle and other countries yeah they're growing and they want to leave the country and many want to go abroad take the first chance mean see we have created a high cost economy for the middle class and we keep on subsidizing the post I'll give you free food I'll give you free gas I'll give you a free house I'll give you everything free blah blah blah because you know they are the voting class doing this is not the solution Beyond 9 lakh crores government of India is 4 lakh cres I think Karnataka is close to 1 lakh CR Tamil Nadu is 1 lak 140,000 cror Maharashtra is close to 80,000 cror I mean look at that every body is ging MrP welcome thank you so much for taking the time and talking to us thank you thank you okay first things first you recently posted on Twitter now x uh that you'd like to see budget 2025 as a year of big reforms and uh you also said that the middle class has been suffering this is something which we also talked about last year uh now between last year and now do you think things have improved and if not uh then what would you like the Finance Minister to do this year because we've been hearing a lot lot of complaints from the middle class especially on taxes you know and other things well let me start off by saying what the big picture should be for the country we must remember we are in the 11th year of the Narendra Modi regime the first 10 years have been very transformative and I personally feel Narendra Modi is the most successful prime minister of India for for a very important reason the biggest challenge for India since Independence has been the poverty and deprivation of a people what Narendra Modi has done in the first 10 years is to make sure almost all Indians have the bare necessities of life a roof for the head water in the tab power in the switch a gas STW in the house food on the table a bank account money in the bank a mobile phone internet uh connection education for children and a health insurance and he has made sure that all the things are available to the largest number of Indians ever in our history so I think most people don't have deprivation they have sustenance and I think now they're very different people so they'll demand more and the focus therefore on this budget should be on jobs jobs and jobs every year about two and a half CR young people for the next 15 20 years will attain the age of 21 we need at least two CR jobs for those entering the workforce you see in the labor survey which says that there are 45% of the working population in agriculture with 63% of them being women where the men is coming down so women are joining the workforce in larger number but in agriculture because they being left behind as the men migrate we have to create good quality jobs all over so we have to focus on jobs jobs and jobs and for that what we need to do is to declare the 400 poorest districts of India as special employment zones anybody starting Enterprise and hiring a person should be given a incentive of 2,000 Rupees a month for the first 24 months with the employees share of esip PF being paid by the government as done in the Cal scheme right now which will be very important because jobs have to be created where people are and if you're able to create labor intensive jobs in the sper poorest districts then I think we can also become a major exporting nation in labor intensive Industries which is required because China is vacating the field and we can get in the field in a very big way second what we need is an urbanization program because urbanization creates concentration of human activity concentration of human activity creates specialization specialization creates productivity and higher prty leads to higher income and it can only happen if you invest in the small towns so we must pick up the 5,000 small census towns there something called census towns in sensus they classified as towns in the last sensus pick them up and invest 20 30 crores a year along with the state government so that you build the infrastructure and most of them will be in the poorer districts and these can be developed so that people don't have to commute more than 8 to 10 kilometers in the villages to work and these can be engines of growth because urbanization creates a large amount of jobs I think these are two big things that need to be done to improve jobs for everybody and we must also promote high-tech industry at the top of the pyramid to improve the quality of jobs the third important thing I would say before I come to the middle class is to improve the justice system we have a broken justice system the biggest failure of Indian democracy in the last 77 years of Freedom has been the fact that the justice system has not delivered and is not delivered the five CR cases in the courts it takes 15 20 years and people are losing hope in a justice system if Justice is not given on time then we our democracy will be in deep danger because people will not respect the rule of law and the rule of law has to be respected for all of us our we only have 20 judges per million population we need to go to 50 we need to building public prosecutors we need forensic expert we need forensic labs and we need lot of infrastructure for all the new courts judges judges houses so that we can expand the capacity to 50 and deliver Justice in two to three years government needs to adopt a litigation policy so they don't go on appealing you know for every frivolous thing you've seen them going on appealing to Supreme Court Supreme Court has clamed down to say they're not going to hear small matters only important matters I think is important all these things have to be done as part of a program for the next 3 to five years it has to be a national Endeavor and then we come to the middle class since I spoke to you last time the middle class has got deeper into trouble primarily because of many reasons one Emi has gone up Emi has gone up so there are 1.
2 CR people with housing loans maybe one and a half CR people with other kind of loans and they're paying much more money for Emi and the income is not gone up in the same page the Emi is gone up was one second inflation is up though I must say the middle Cloud does not spend so much money on food with the lower middle Cloud that spends more money on food but inflation nevertheless is biting them and the third thing is very importantly school fees and college fees have gone up they gone up by 40 to 60% last 3 years and if you are a middle class person with two kids you have to pay for the school fees and school fees are gone up and you pay them out of after tax income you are in deep trouble so disc money is not available with a large number of the middle class and they're in deep pain and I think they're very angry and upset that over the last you know four years tax collection of individuals have gone up from 4 lakh 95,000 CR to this year 2425 based on estimates maybe 12 and half lakh cres it's gone up by maybe 150 160% and this year income tax collection gross is going up by 21% plus net by 16% because they're giving huge refunds for all the past since and tax terrorism is rampant in Industry disputes have gone up from 4 and half lakh cres in 2014 to 12 and half lakh cres in 2024 as per the budget figures and the government has tried to stem the flow of T stem T terrorism by doing many things but 99 97% of people get the refunds but industry is suffering the brunt of tax tourism and there's no ease of doing business along with that I think that's very important and as far as industry is concerned I think we must have a check on the Regulatory Agencies what the Narendra Modi government has done is they don't interfere with from what I know what I know please pardon me for income tax rates CBR rates and Ed rates but all these agencies have to be Reed in and they must perform while they got freedom to do what they want and they go raate and many of them do it very wrongly before they announce they whisper to the media we going to rate this rate this create fear then you know what happens when people are scared they start talking and you know what happens then and then they go rate somebody say we got 2,000 CR 3,000 crores all kind of numbers and the the names are defamed and then when they go to court mostly it's thrown out where 70% of case of income tax rates are thrown out and I think it's important not to defame people not to create an element of fear 50 5,000 hnis are left India as per some reports of the last 10 years and about two and a half three lakh CR of purchasing power left this country we don't want people to leave this country especially hnis who pay heavy tax and the element of fear has to has to go away we not seen government do many things to remove this element of fear in the UPA era when there's a raid you could go to the minister talk to him and get it done settle it with the minister right here you can't do it with any Minister because the ministers are very scared that somebody is watching them and nobody wants to interfere so we are trouble and the next important thing that we have to do is to make sure that we take care of our senior citizens you be very surprised we have 13 CR people above the age of 60 today you'll go to 20 crores and we have to make sure slowly you build a security social security system for the age in terms of medical insurance which the insurance GST is still going on and on and on and on it is terrible they're debating the popcorn tax but not reducing GST on health insurance for senior people and we was building Social Security and pensions for the age so that over a period of 15 20 years they can have a decent life so I think we need large structural reforms of this nature to take us forward especially focusing on jobs because you know uh the next election in 2029 uh is going to be fought on jobs and urban areas with the delimitation and the sensors more power is going to urban areas and urban areas require more jobs I think we're going to see a shift in our domestic politics we have to prepare for that and Narendra Modi has had 10 11 years and his time he goes for the greatly forward to do all this thing and just yesterday we saw the Trump inauguration and today morning we saw a report they going to invest $500 billion on AI $500 billion right where are we we are importing chips we getting shut up for Government after 11 years in power after 11 years in power it's time for Modi government to go for that big leap because we what we also saw when you know Trump took charge he signed a whole bunch of executive orders and uh brought in some radical changes in a lot of areas all in with a single stroke of pen while talking to the media right and uh you talked about the big picture thank you so much for painting that comprehensive big picture for the all of us in terms of the country should be focusing on uh now let's talk about some of the specific issues in that big picture and one of those specific elements is of course the stress among the middle classes because on one hand we're talking about you know the issues related to job creation then we're talking about inflation uh and then of course uh you know when you when you look at the condition of the middle class uh from whatever stories we have done the comments the questions that we get uh this seems to be you know a big theme tax relief and of course you know there are stories which are coming out that Finance Minister during the budget could also focus on you know reforming the tax laws uh tax laws are old and she's perhaps looking to simplify them but what do you see happening as far as you know the tax laws are concerned and what kind of relief can middle class expect and demand from the Finance Minister look uh we have to see where the pain is so I think we got to reject the tax slap chamaram gave us three slaps Nala sitaraman made it seven she made it 56 they shouldn't have fiddled with the slaps and do the small small things very irritating because tax lab should be such that you could wake up at 3:00 in the morning and remember that it's got to be simple so I think when need Z to five no tax because only about 45% of people who file returns pay tax 0 to five no tax 5 to 10 10% 10 to 20 20% and about 20 could be 30% with S charge kicking in at maybe 50 lakhs and the relief will come largely in the 10 to 20 because up to 10 the tax is not too high and there should be no deductions except ATD for medical insurance which is very important because the health system Public Health System the gross failure largely and two for charity for atg know the deductions and make it in Li of the alternative system that we have today with those 5 six laps do this that will give a relief I think about 30 to 40,000 rupees or maybe 50,000 Rupees to everybody in the tax lab of 10 to 20 lakhs because the pay is the largest there you know because up to and then don't compel people to file returns unless they have a refund up to five lakhs this year we already got about 8. 6 CR returns and if four and a half C don't pay tax why are you making them file returns they may not even have refunds because the threshold is so low and people all over crib and say oh this is much more than the per capita income Etc per capita income this year 25 it'll be about 2 lak 35,000 rupees but please remember uh in this country 1 billion people live on less than uh $1,000 a year the balance 400 million leave on $6,000 that's about 3. 4 trillion right and out of that 400 million 100 million get more than $110,000 and the 300 million get $5,000 and if add it up again 3.
5 if you segment it so the pain is largely in the in the 400 million people who are the middle class and there in the top 60% not the top 10% below that 60% in the middle that is where the pain is because they are the people who buy a house who are consumers who buy a car who send children to school and you must encourage people in that thing why are we burdening with more and more taxes we putting the silly popcorn tax remember three different kinds of popcorn popcorn with this Finance Minister spent a lot of time explaining why that popcorn tax it is ridiculous you know the biggest failure has been the the the the the tax authorities are extortionist in their approach that's the nature of the Beast all tax collection globally is extration in a different way they use the power of the straight to twist your finger to collect more money you can't blame them because that's the nature of the speech our political leaders should protect us from this kind of thing if the tax recommend we have three tax rate for popcorn know popcorn which is not sealed Popcorn open all kind of stuff chocolate popcorn and all that it leads to confusion even though they said we're clarifying what has been confusing earlier why not have one and make it simple the political leaders have to step in what did the 29 Finance Minister do in the GST meeting where they twiddling the thumbs watching the officials come and recommend and they all put the Chapa I mean are they not educated are they not a representative they should speak up and stop it and what is so big about reducing GST on medical insurance for 60 people about 60 what is the big deal it's a very simple matter which can be finished in one day they're going round and round and round and round and harassing us what kind of a tax system is it that is becoming deemed as extortionist by people middle class people who pay the taxes and today you'll be very surprised 9 lakh CR is the subsidy given to the bottom 60% of people n lakh cres all states are giving free money everybody's giving money who is paying for that this 12 and half lakh crores of taxes that is income tax corporate tax is another about 10 lakh crores or 11 lakh crores and then GST today across the country is 21 lakh CR and in GST the middle class pays the bigger amount because they are consuming the things on which there is GST about 50 60% of items don't have GST with the lower classes and the poor will possibly consume but the middle classes consume the greater amount you look at a car 50% of the cost of the car is taxes including road tax right anything you buy look at a fridge 28% cement is 28% is cement a luxury for housing it de to be luxur two wheer 28% two wheer we we sell 21 million two wheelers every year every the two but it t them 28% and 28% refrigerator air conditioning AC cost 25,000 rupees on the 28% 28% stay in Delhi without an AC and you see how you suffer AC is required productivity it become a cheap product but you live it because why AC is luxur and our political leaders live in government bangalow with AC Parliament is got AC we pay for it but for them to tax it is a luxury is totally absurd this whole concept of luxury and all that is totally absurd buying a few limited item they should not put all that so I think the political leadership tax letters down they must put their foot down and say we want a simple system fewer rates and we want to do things good for the people and you know in popcorn how much tax will collect 300 cres 400 CR CR when a culting 21 lakh doesn't make a difference but harassment is so much the harassment is so much and you know one thing which you also briefly touched upon is housing uh now when it comes to deductions for housing they're rather big but very few people are take uh cap of and able four CR people I'll give data four CR people pay taxes four CR four and half crores maybe one CR take the tax deduction and then they say we given you all this tax deduction and you know you pay tax but doesn't apply to everybody it will apply to everybody the best thing is no deduction expand the slat so people have money in the hand when you have money in the hand you decide whether you want to buy an insurance policy you want to buy a mutual fund what do you want to do and whether you want to go for holiday let them decide people are wise enough to decide right why should government force you to do certain things saying oh you save tax and there a shim they give this tax break few people then say Oh for everybody you don't have to pay tax you're doing this I mean come on we are not foolish people people see through all these things there is great anger the anger is simmering because the last 10 12 years the middle class has borne the burden of all the taxes burden of all the changes the quality of our life is poor in many cities we can't even breathe fresh air there a failure it not be anything to do with Narendra Modi and the union government but there's the water is difficult traffic jams are there because they're not invested in public transport where is public transport people buy cars there are no roads in Bangalore roads are all Port we don't have enough bus I mean crazy right the wealth comes from Urban are also the problem is Mrmiddle class is getting nothing for it and as a consequence we're seeing anybody who possibly can is moving to places like the Middle East and other countries yeah they growing and they want to leave the country and many want to go abroad take the first chance we got about 1. 2 lakh young people studying outside about 80% of them are studying outside to get a job there and stay there not to come back and parents are selling land and pushing them outside because they're losing faith in this country because of all this because the quality of life has come down Narendra Modi promised us to improve the quality of life but the quality of life has come down not because maybe due to him because you know he doesn't run the cities heun doesn't run the states but overall when we sit back and see has our life improved in the last 10 years what do you say our AG has become foul water has become scarce we spent more time sitting in traffic in our Cities the roads are bad right and you know the stress levels are gone up our health is going down what are we getting and that's why I'm telling you in the future we must focus on urban areas the urban areas are the biggest engines of growth that's where the productivity come taxes come you must focus on urban areas you must have a large urban area program driven by the center the smart city is very good but the Smart City mix missed crucial things that are required it's not about technology we want public transport urban areas need public transport we got th000 kilomet of Metro another th000 getting built must go to 5,000 Bangalore requires 500 kilm of Metro Delhi requires th000 Bombay requires thousand we must plan for it and build it over the next 5 to seven years and we need to improve the speed of trains I mean you go to China you can travel at 350 km you know you go to another city it takes 1 hour here 350 km takes 5 hours 6 hours and the W bat is very good only goes at 85 kilomet an hour so why are we not speeding up between inter city so that we can improve the quality of life because the most important asset for you and me is time time is important you spend all the time sitting on the road going to the airport sitting with the lousy Security in the airport where they harass you and you know they open your back check it you know you see how they operate there's no customer service there right there's no customer service airport problem sorry I'm interrupting you but since we have a limited time I want to get in as many questions as possible uh so quickly MrP another problem waste of Finance Minister need to deal with and solve is of course uh boosting the consumption uh and that can happen by ensuring that there is more money in the hands of people one way to do that is of course to revise the tax Labs uh and what are some of the other ways through which the Finance Minister can ensure that there's more money in the hands of people and this entire problem of consumption slowing down can be addressed look interest rates have to come down let me explain the problem to you we have some 78 billion people people sitting and spending two days debating every two months how to raise interest rates and what is the ca of inflation food inflation what is the ca of food inflation vegetables which are going up at 21% and vegetables and food has a 46% weight in the CPI because they based on the weights of 20112 201112 per capita income was 70,000 rupees last year was 2 11,000 the weights are not come down the new consumption survey says weights have to come to 35% so if tomato and tomato onion and potato prices like van said tops you know an nages call it tops they don't respond to interest rates they're all supply oriented and core inflation is 2 and half 3% but we got a interest rate by the RBI 6 and half% is very high and the interest rates are too high and and and you know msme borrows at 12 to 16% the are ous rates and the cost goes up everywhere because remember you know we have large borrowings in the economy cost goes up both personal loans and others so we have to reduce the interest rates and the RBI just refusing because saying inflation is high they're calculating inflation based on 20112 WS I mean for the poor they get free food they get everything else and the consumption survey SCE that the impact of all that is quite significant for them and for the rest of us we don't spend so much time so much money on you know in on buying tomato onion and vegetable prices right for us rental and you know school fees are important education has become the biggest challenge for the middle class you send a son to college for stem it cost four to five lakhs you send it to the fancy social science university in Delhi 12 14 lakhs a year I think right you go for MBA course 2 years 25 lakhs 25 lakhs everybody will become mercinary you go to an MBA spend 25 LS what you want is placement you sell yourself the highest bidder right and know you got be a doctor 50 lakhs to one CR 50 lakhs to one CR if you have to pay where's the money for the middle class who has said 50 lakhs to 1 Croney right right if where's the money for that and then even the jobs that you get after completing those coures you get three four five lakhs perom yeah yeah yeah I mean see we have created a high cost economy for the middle class and we keep on subsidizing the PO I'll give you free food I'll give you free gas I'll give you a free house I'll give you everything free blah blah blah because you know they are the voting class see this is a function of the skewed system of voting where the rural areas have a disproportionate weight in the voting pattern because we are stuck based upon the 2 I think 1991 census for 30 years remember that okay 1991 sensus for 30 years now 30 years are come we need the new sensus and political power will shift when this happens and we paying the price the urban areas create taxes middle class pay taxes the taxes pour it down the big dark hole I'm not against the rural poor we should give them but you know we should do it very differently doing this is not the solution Beyond 9 lakh crores government of India is four lakh crores I think Karnataka is close to 1 lakh CR Tamil Nadu is 1 lak 140,000 crores Maharashtra is close to 80,000 crores I mean look at that everybody is giving I'll give Delhi they're saying I'll give 2,000 Rupees to every woman I'll give you free gas I'll give free this whose money is that whose money is that they're not paying the benefit are not paying the taxes you and I are paying the tax and what do we get in return nothing are we not citizens of this country we should also get something all can do all that middle class can do is watch amadm party say I'll give women 21100 rupees uh BJP say that we will pay you 2500 rupes and the Congress say the same right so middle class is just watching from the distance uh but but but apart from that MrPi I also want to talk to you a little bit about the markets January has been brutal uh the amount of selling which has come in as far as fi concerned has crossed 50,000 gross uh and with Trump coming in uh this Exodus of capital which is happening from the markets is only likely to increase at least that is what the experts are saying so going forward what do you think you know uh is happening in the markets and um what can the government do to ensure that this money which has been you know going out of the market can start perhaps coming back well I think the government cannot do much the government can give a good budget because now remember that one Revenue secretary said oh we want to bring the capital gains to normal tax why talk like that why create fear see let's remember one thing investors don't trust the government of India because they got a nasty habit of doing retrospective amendment that indexation which they removed cost maruti suuki some 800 crores and they're saying in Delhi it is not retrospect it is retrospective they promise they will not do they who will trust the government who will trust the government so every time some secretary makes a remark like that everybody gets scared tax will go up this will go up and they start selling and get out of this country because they believe that there's no trust we have to build trust any tax law should be prospective not retrospect that should be the policy government they announced it in Parliament but they break it because they don't seem to understand they don't seems to understand at all about that indexation indexation they came with some crazy rate remember that real estate is going up 11 to 12% a year in value it not gone up they give and they give some dumb data to the Finance Minister to justif Y what they want Finance Minister doesn't check up they must check up independently that these people give something they take it as gospel truth and go ahead and do it why all the secrecy in the budget why should budgets be secret they should this is the tax change we're going to bring in the next one year be more transp there's no transparency in the budget there will be more transparency what is there the money belongs to us they're all fiduciary agents so I think the key Market is going down because one there there's Global uncertainty because of high interest rates in the US 10 year bond rate is 4. 5 the people rather put money there uh on a risk-free basis rather than put money into emerging markets and go through all these hles to ear maybe 10 11% that's one and two because the interest rates are remained High money is going back three the Indian Indian markets R deem over pric based on a compartive basis now the P for the market has come down and the fourth they say there is no growth happening in the country and here again there's a mess up you see if you look at the growth consumption the first six months has gone up by 7% okay that's pretty good but uh they didn't spend the money they budgeted for capex in the first quarter they didn't spend because of election in second quarter say Rain G they should have spend that money they should monitor the money and spend it and then second quarter you notice the important thing RBI had a Tight money policy and government kept a lot of money in deposits with RBI they didn't release the money into the in the market they kept the money there and the money became very tight and even now there's a shortage of money because the outlow of this money that's going out but the government of India fortunately has lesser balance raising money to the states and others because now they scared they'll not be able to spend the capital expenditure budgeted the fiscal debt is this year for the first eight months is lower than the previous eight months is lower in absolute amount and as a percentage is lower and they're saying oh we'll have a better fiscal deficit man' you got to spend money release the money so the money improves velocity of circulation improves and do all the thing which is important to Revenue growth because you know if you don't spend capex government is the last spender of capex 11 lakh crores this year you don't spend enough for the first quarter then growth comes down and suddenly growth comes down by 0.
