Lower taxes will help contain the purchasing power
inflation erodes... more income in one’s hands when inflationary expectations
are receding will help either improve demand for goods or will reach (savings
and) investments... In the short-run it might be a solution to secure supply,
but it will hurt poor-people... those whose incomes are not affected by taxes, but, again, indirect
taxes are paid by all and to lower prices, increase demand and growth we should
also consider a cut in indirect taxes... demand is a crucial driver of growth,
it will benefit all.. Much of the Indian-population does not pay taxes... it
will include all... industry (in the form of income –tax) and others in the
form of lower indirect taxes... Everybody is benefiting... However, the government
needs to rationalize taxes on the very-poor... The minimum-wage earners... But,
no doubt the solution must either come from the government or the RBI... How
the economic-policy helps contribute to contain the purchasing power of minimum
wages... more specifically the subsistence-wage (trap)... shows its
credibility... We have unconsciously created a labour-class at the bottom...
who cannot demand wages more than inflation and devoid of other benefits too,
good-food, and education and health... a true human-capital... The government should
aim at increasing living standard of this section because they are being
exploited in case they did not get education and skills to get employed and
pay-taxes... Good revenue...
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