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So basically as on today, if you are earning Rs 62500 or less per month, you need not pay any Income Tax. As per the @CvoterIndia OB Tracker data for year 2018, only about 21% Indians Households have more than 20K per month earning, a group we modestly call "Middle Class".
Just did a rough calculation, and going by the tracker data, 16% out of this 21% Middle Class was declared 'Tax-Free' today. Which calculated to approx 74% of tax paying Middle Class getting cleared out from paying any tax whatsoever. That is 3 out of 4 Middle Class Indians.
In terms of All India Population, that would be approx 16% of the population, but in terms of Middle Class population of India, it would be covering 74% of the that chunk. Whichever way you look at it, this number is big. And we are only talking about Middle Class.
Now the lower end of spectrum. As per the NSSO data, the average Rural household income is Rs. 6526 pm and as per the NABARD data, it is Rs. 8931 pm. As per the @CvoterIndia tracker, almost 60% Rural households earn less than 10k per month and as many as 97% will be tax free.
Now please understand the importance of Rs. 6000 coming in three parts of Rs. 2000 each for these households. It means about 32% (or every third Rural Household) getting increased earning by 25% or more just by this cash transfer. For those at the bottom of the pyramid, its big.
And talking about the POTP (Poorest of the Poor Population), this scheme, if implemented properly, could match, hold your breath, the monthly income of almost 10% POTP Rural Households. Yes, we are STILL that poor. Feel free to be ashamed of that fact, but thats what it is.
This is why, when i see people on SM criticize the POTP population for 'selling their vote' for just about Rs. 2000 each, please be mindful of the fact that at household level, that election season provides them almost worth their annual earning. Yup. A year. Let that sink in.
But as this is an Election Season, and this is an Election Budget for all practical purpose, the focus will now shift on how much this Budget can deliver in terms of mandate. I guess the Rs.6000 pa plan is to be implemented from December 2018, which practically means, NOW.
So, expect that first installment of Rs. 2000 from that money being directly transferred to the Jan-Dhan-Account of these POTP population, before the elections start. I know critics will compare it to RK Nagar Model of elections, just that, it is formal, and in the bank accounts.
Whichever way you look at it, we are heading for one hell of an election season. So tighten your seat belt, and enjoy the campaign. It has already started with the Union Budget as on today.
