congress-caught-on-the-wrong-foot-over-wealth-redistribution-inheritance-tax

Congress has been caught on the wrong foot over the issue of wealth redistribution and Inheritance Tax. The Congress denials notwithstanding, the fact is that Rahul Gandhi has been often talking about “wealth redistribution” in almost every speech.

 

He precisely says that the Congress government, if it wins, will distribute as much money among the poor people as, he claims, the Modi government has given to a few billionaires. 

 

Indian Overseas Congress Chairman Sam Pitroda’s remarks in a recent interview with a news agency about the Inheritance Tax need to be viewed in the context of Gandhi’s frequent statements on “wealth redistribution”.

 

Pitroda was Rajiv Gandhi’s adviser and was also an adviser to Rahul Gandhi. All the foreign trips of the “younger” Gandhi, including his interactions in elite universities abroad like Cambridge and Harvard are all organised by Pitroda. It is widely believed that Gandhi’s socioeconomic policies, as he preached and propagated, have a Pitroda imprint.

 

Congress has always been considered to be a party that is “left of centre”. However, Gandhi is seen to be taking a “radical left” turn, far beyond the ideological limits of the Congress.

 

Congress took the “right” turn in its economic policy during the tenure of PV Narasimha Rao when Dr Manmohan Singh was his Finance Minister. Since then, the subsequent governments have followed the same liberal economic policy that is considered to be on the “economic right”.

 

Rahul Gandhi’s influence was seen even during Dr Manmohan Singh’s tenure as the Prime Minister. The Food Security Act and Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) were influenced by the “socialist” ideology that the Congress has always pursued. Interestingly it was Rahul’s grandmother, who added four words, “Sovereign, Socialist, Secular, Democratic, Republic” to the Indian constitution. Socialist ideology is that way part of the constitution and constitutional obligation as well.

 

Rahul Gandhi has crafted his argument very carefully. When he suggests the idea of “wealth redistribution”, he counts, from his own calculation, “ninety per cent” Indians in it. 

 

He has been maintaining that the wealth is right now concentrated within “five per cent” Indians. In the “ninety per cent” figure he includes about 50 per cent Backward Classes, 15 per cent Dalits, 15 per cent minorities, 8 per cent Adivasis and about five per cent “poor from the general castes”. The figure comes to about “92 per cent” but he mostly rounds it off at “90 per cent”. 

 

For him, this “ninety per cent” population is most marginalized and sidelined. He claims that this “ninety per cent” population has no representation in the decision-making process in the country whether in the government or the private sector. 

 

According to Rahul, the country is run by “90 top bureaucrats”, among whom there are just “7 officers” from the “ninety per cent” population. He then goes on to say that the “ninety per cent” has no representation in media, negligible representation in the judiciary and no representation in the media or the corporate sector.

 

For this, he says, the country needs an “X-ray”, which, according to him, can be done by the “Caste Census” followed by an economic and financial survey. By that, he means to check as which community controls how much wealth and resources. Although he has never said that the wealth will be taken away from the rich “five per cent” and given away to the “ninety per cent”, he repeatedly says, the wealth will be redistributed and the Congress government will give as much money to the “ninety per cent” population as Modi gave to a few friends.

 

 

This is besides two other schemes the Congress has announced in its ‘Nyay Patra’ (manifesto). These include the Right to Apprenticeship and Rs one lakh per year to ‘one woman’ members of every poor family across the country. 

 

Under the Right to the Apprenticeship programme, the party has promised that every fresh graduate or diploma holder will be entitled to one year of apprenticeship in the private and public sectors and the government. 

 

During the one-year apprenticeship period, each apprentice (graduate/diploma holder) will get Rs one lakh at the rate of Rs 8500 per month. The party describes it as “pehli naukri pakki”, the first “guaranteed job” immediately after graduation/diploma, in the very first year.

 

Both these schemes will involve a humongous amount of money to the tune of tens of thousands of crores. 

 

This has naturally raised the question as to where the money will come from if Congress/INDIA comes to power. 

 

The brunt will be obviously borne by the taxpayers. However, it will be impossible to finance such schemes with the existing taxation regime. The tax net will be widened. And how to do that? A solution has already been suggested by Sam Pitroda, by imposing additional taxes like the “Inheritance Tax” prevailing in some of the states in the ‘United States’.

 

Under this taxation regime in the US, when a person dies, only half of his wealth is inherited by his successors, while half of it is taken away by the government. 

 

"If one has $100 million worth of wealth and when he dies he can only transfer probably 45 per cent to his children, 55 per cent is grabbed by the government. That's an interesting law. It says you, in your generation, making wealth, and you are leaving now, you must leave your wealth for the public, not all of it, half of it, which to me sounds fair", Business Standard, a financial daily quoted Pritoda saying, adding, “in India, we do not have such provisions. If an individual is worth 10 billion and passes away, their children inherit the entire sum, leaving nothing for the public... These are the discussions and debates that people will need to engage in." 

 

This leaves hardly any doubt as to what the Congress aims at doing. It has already embarked on the path of “Neo-Mandal” politics with caste census and removing the cap on reservations. 

 

Once Rahul’s politics is coupled with Pitroda’s economics, the consequences are not too difficult to imagine. 

 

A progressive, aggressive and self-confident India will always consider it to be regressive politics and regressive economics, and rightly so.