Middle class fooled once again india budget 2024 dhruv rathee
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00:00Even the biggest Modi supporter started expressing his anger against the government.
00:05It seems that the government collects all the taxes from middle class people
00:09and only benefits are given to their millionaires and billionaires friends.
00:14Look at this article friends.
00:15Such a bad state of income inequality was not even in the time of British rule.
00:19Namaskar friends.
00:20On 27th July, Finance Minister Nirmala Sitharaman presented Budget 2024.
00:25And the negative reaction that was seen by the public regarding this budget
00:29was of a different level.
00:31Even the biggest Modi supporter started expressing his anger against the government.
00:35Look at these tweets.
00:36Those who were saying till 17th June that we have to see dictator Modi
00:40started saying by 23rd July, please don't treat us like beggars.
00:45Those who were saying till 9th June, now I can die peacefully
00:48started saying by 23rd July, worst government I have seen in terms of tax issues.
00:54This tweet of comedian Abhijit Ganguly went viral.
00:56If I earn money, Nirmala takes tax.
00:58If I spend money, then also Nirmala takes tax.
01:01If I don't earn or spend both and my money is just lying in investment,
01:05Nirmala takes tax for that too.
01:07And best part, if I give tax, there is additional cess on that too
01:11so Nirmala takes another tax on that too.
01:13These memes also went viral on Finance Minister.
01:16You can't defeat me. I know, but she can.
01:19Showing this logic, this flowchart also went viral.
01:22Whatever salary you get, you pay 30% direct tax on that.
01:27If you invest the remaining money,
01:29and if you earn money quickly in investment,
01:32then you pay 20% tax.
01:34If you earn money slowly, then 12.5% tax.
01:37And if it's your loss, then it's your loss.
01:39Secondly, if you go to spend your money,
01:42then according to GST, you pay 12% tax on basic items,
01:4618% tax on kind of fancy items,
01:49and 28% tax on luxury items.
01:52The question here is, is this budget really that bad?
01:55Come, let's understand it in depth in today's video.
02:07Let's start with the thing that is being criticized the most.
02:10Capital Gains Tax.
02:12This tax is applied when you sell your asset,
02:15like a house or land,
02:17or when you earn profit from your investment.
02:20Like when you invest money in the stock market or mutual funds.
02:24Capital Gains Tax is divided into two parts.
02:27If you're buying and selling something for less than a year,
02:30then it's called Short-Term.
02:32And the tax that is applied then is called Short-Term Capital Gains Tax.
02:36In short, it's called STCG.
02:39But if you keep your investments for more than a year,
02:43then it's called Long-Term.
02:45And in such cases, it's called Long-Term Capital Gains Tax.
02:49LTCG.
02:50In this new budget, the government has increased both these taxes.
02:54The Short-Term Capital Gains Tax has been increased by 5%.
02:57Earlier, it was 15%.
02:59Now, it's 20%.
03:01And the Long-Term Capital Gains Tax has been increased by 2.5%.
03:04Earlier, it was 10%.
03:06Now, it's 12.5%.
03:08But in this case, the government has increased the exemption too.
03:11Earlier, there was an exemption of 1 lakh.
03:13Now, it's 1.25 lakh.
03:15Meaning, if your profit is less than 1.25 lakh in a year,
03:19then you won't have to pay this tax.
03:21Now, it's obvious that people who invest their money in the stock market and mutual funds
03:25are angry with the government.
03:27Because for them, this is a direct loss.
03:29Apart from this, people who trade in futures and options,
03:32there is bad news for them too.
03:34A Securities Transaction Tax is imposed on their trading.
03:37Earlier, this tax was 0.0125% of the transaction value.
03:42Now, it has been increased to 0.02%.
03:45Earlier, it was 0.0625% of the option premium.
03:49Now, it has been increased to 0.1% of the option premium.
03:53But if we look at it from the perspective of the government,
03:56what can be the justification for increasing all these taxes?
03:59The answer to this is probably the Economic Survey of 2023-2024.
04:04Economic Survey, if you don't know, is an annual report.
04:07It is presented every year before the budget.
04:09And it is made by the Economics Division of the Department of Economic Affairs
04:14under the guidance of India's Chief Economic Advisor.
04:17Finance Minister Nirmala Sitharaman presented this Economic Survey
04:20to the Parliament one day before the budget on 22nd July.
04:24If you look at page 65 of this survey, it is written,
04:27If equity market claims on the real economy are excessively high,
04:31it is a harbinger of market instability rather than market resilience.
04:35In simple words, they say that the stock market is in a bubble.
04:39And if the market claims are too high, it is a harbinger of market instability.
04:44It's amazing, friends, that whenever the government was criticized
04:47on issues like economy, unemployment, inflation,
04:50they used to say, look at the stock market.
04:53The stock market is going up so much.
04:55If the stock market is going up, there is development in the country.
04:58But now it is being said that the stock market going up is not an indicator.
05:02If the stock market is going up too much, it can be a harbinger of market instability.
05:06Clearly, the government wants to discourage this.
05:09Especially the trading of futures and options.
05:11Which in my opinion is a very risky thing.
05:13Many people who don't even understand this properly,
05:16they put a loss of lakhs of rupees of their life savings
05:19in the greed of money.
05:21One very interesting thing in this budget was seen
05:23that the government has talked in detail about the problem of unemployment
05:26in its economic survey.
05:28And has also suggested some solutions.
05:30He has clearly written that by 2030,
05:32we will have to create 78.5 lakh jobs every year.
05:36On page number 158 of this report, he has admitted
05:39that 1 out of 2 Indian graduates are unemployable.
05:43Because people don't have sufficient skills.
05:45According to CMIE data, the unemployment rate in the age group of 20-24
05:49has reached 44.49% in early 2024.
05:54This report also talks about Artificial Intelligence.
05:57It is written that due to Artificial Intelligence,
05:59a lot of uncertainty is created.
06:01At every skill level, whether it is a low-skill level worker
06:04or a high-skill level worker,
06:06there is a lot of uncertainty on their jobs
06:09due to the advent of Artificial Intelligence.
06:11He has clearly written,
06:12AI is the biggest disruption for the future of work.
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07:23Coming back to the topic,
07:24if you don't want to invest money in the market,
07:26then what about things like gold and property?
07:29These things are called non-financial assets.
07:32Whether you have bought land or a house or an apartment,
07:35the long-term capital gains tax on non-financial assets,
07:39if you look at it from the top,
07:41the government has actually reduced it.
07:43Earlier it used to be 20%, now it is only 12.5%.
07:47If you think, this should be good news.
07:49But along with this, the government has removed the benefits of indexation.
07:53Indexation means that the capital gains tax on the price of your property
07:58will be considered by taking inflation into account.
08:01That is, if you had bought a house worth 20 lakhs 20 years ago,
08:05and by adjusting with inflation,
08:07the price of that 20 lakhs becomes 60 lakhs today,
08:11then you will have to pay less tax
08:13because the value of that 60 lakhs will be considered as the baseline.
08:16Your profit will be taken out of it.
08:18This is called indexation.
08:20But if the indexation is removed,
08:22then the price of that 20 lakhs will still be considered as 20 lakhs today.
08:26It will become the baseline and you will have to pay tax on that extra amount.
08:30Why is the government doing this?
08:32A reason behind this can be told that the government does not want speculation in property prices.
08:36Do you remember this interview of Manoj Tiwari?
08:40Yes.
08:42Manoj Tiwari gave an interview during the election,
08:45in which he was very happy to say
08:47that after Modi 3.0 comes,
08:49he will increase the price of every property in his constituency by 2-3 times.
08:53But this will be wrong.
08:54Why?
08:55Suppose the people who will come here from your Purvanchal,
08:58they will never be able to buy a house.
09:00I am a little confused about this, sir.
09:02Now look, it is beneficial for people like Manoj Tiwari.
09:05People who have so much money that they have bought 2, 3, 4, 5 properties.
09:09They sell the property and run their business.
09:11They get profit from there.
09:13But what he did not think was that
09:15the lower middle class people who do not have their own properties,
09:18who want to buy a house for themselves,
09:20want to buy a first house,
09:22this is harmful for them.
09:23Because from their perspective,
09:25the property prices are going so high that they cannot afford to buy a house.
09:29Here too, when property prices become overvalued in this way,
09:32it is called a real estate bubble.
09:34So the government wants to discourage investment in property.
09:38But will it be beneficial or harmful for you personally?
09:41It depends on your personal situation.
09:43Because there are many small rules that have to be considered.
09:46Like the government has made a rule,
09:48if you have bought your property before the year 2001,
09:51then you will get the benefits of indexation.
09:53But you will not get it after that.
09:54Now exactly the benefit you are getting from tax reduction,
09:57from 20% to 12.5%,
09:59and the loss due to the reduction of the indexation benefit,
10:02will it be beneficial or harmful to you overall?
10:05Let's understand this with an example.
10:06Assume that you bought a property by spending INR 20 lakhs in 2004.
10:11By adjusting with inflation,
10:13the value of that INR 20 lakhs today will be INR 64.2 lakhs.
10:17How was this calculated?
10:19By deciding the CII value.
10:21CII is the Cost Inflation Index.
10:23Which calculates the inflation of asset prices every year.
10:27Every year, the Income Tax Department releases the numbers of CII.
10:30And the base year is taken here in the year 2001.
10:33In the year 2004, when we bought the property,
10:35the CII value of that year was 113.
10:37And this year's CII value is 363.
10:40So 363 divided by 113 is 3.21.
10:43And we will multiply this number with the cost of INR 20 lakhs.
10:47To calculate the inflation-adjusted value of our house today.
10:51Now how much does this house sell for?
10:53According to the studies of the Centre for Social and Economic Progress,
10:56the housing prices in India have increased by 9.3% from the annual rate.
11:01Between 1991 and 2021.
11:04If we assume this trend,
11:06then the selling price of this house will be INR 1.24 crores today.
11:10That is, in 2004, we bought a property worth INR 20 lakhs.
11:13In 2024, we are selling this property at the cost of INR 1.24 crores.
11:17First, let's see from the old system how much tax we have to pay.
11:20If we consider the indexation in the old system,
11:22then 1.24 crores minus 64.2 lakhs is equal to INR 60 lakhs.
11:27And on this, the old long-term capital gains tax of 20% will be imposed.
11:31Which is equal to INR 12 lakhs.
11:34If we talk about the current system,
11:35the benefits of indexation are gone.
11:37So we will do INR 1.24 crores minus 20 lakhs.
11:40Which is equal to INR 1.04 crores.
11:42And on this, the new long-term capital gains tax of 12.5% will be imposed.
11:47Due to which our overall tax will be INR 13 lakhs.
11:51So this is a very realistic example with realistic prices.
11:54In this specific case, you can see that there is a loss of INR 1 lakh.
11:59After the arrival of the new system.
12:01Many people have expressed concern that because the new system is so harmful,
12:05people will start dealing in cash to save tax.
12:08Due to which the circulation of black money will increase even more.
12:11And the people who have invested in delayed projects in the last 23 years will suffer the most.
12:16There are many such housing projects and societies
12:19where people bought apartments but they didn't get built.
12:215-10 years were delayed.
12:23And unless the price of those properties increases drastically,
12:26these people will suffer even more loss.
12:29The only benefit that the government can expect from this policy is that
12:32the speculation in property prices will decrease.
12:36Property prices will not increase so fast.
12:38And maybe lower middle class people will get a chance to afford a house.
12:44Then we come to Angel Tax.
12:46This is the tax that is imposed on start-ups whenever they issue their fresh shares
12:51at a price above the fair market value of their company.
12:54And in the new budget, the government has proposed to remove this tax.
12:58This is a good decision.
12:59In fact, this is a decision that the opposition parties have also praised.
13:02Congress leaders say that this demand of theirs has been there for a long time.
13:06And in fact, this thing was also written in their own manifesto.
13:10Then on income tax, some minor changes have been made
13:13which will be beneficial on a small scale for middle class people.
13:17For example, the standard deduction has been increased from Rs. 50,000 to Rs. 75,000.
13:22Slabs have also changed a little.
13:23Earlier, an income tax of 5% was imposed on an income of Rs. 3-6 lakhs.
13:28Now, a tax of 5% will be imposed on an income of Rs. 3-7 lakhs.
13:32Similarly, the slab of 10% tax rate was earlier in the range of Rs. 6-9 lakhs.
13:36Now it is in the range of Rs. 7-10 lakhs.
13:3815% tax was also in the range of Rs. 9-12 lakhs earlier.
13:41Now it is in the range of Rs. 10-12 lakhs.
13:42There has been no change in the rest of the tax rates.
13:45Exactly how much benefit you will get here depends on how many deductions you are getting.
13:50Under Section 80D, 80TTA, 80TTB.
13:54Exactly how much is your annual income.
13:56But roughly speaking, it is a negligible benefit for a middle class person.
14:02If you compare it with the previous governments, then this is an interesting chart made by Mint.
14:07You can see that between 2006 and 2012, how many times the slab of 0% and 30% was increased for the benefit of middle class people.
14:15But the same slabs have not been changed in the last 12 years by the government.
14:20A similar thing can be said for the Capital Gains Tax.
14:23Do you know that in 2004, when Manmohan Singh's government was formed, the Long Term Capital Gains Tax was at 0%.
14:30Only in 2018, the new Modi government brought back this tax.
14:35Which has now been increased to 12.5%.
14:38This is another big issue on which the government is criticized.
14:41Because if your salary is more than Rs. 15 lakhs in a year, then the maximum tax rate applied on you is 30%.
14:47But on the other hand, if someone else's salary is more than Rs. 1 crore, then the same 30% tax rate is applied on him.
14:53But in reality, one person is a millionaire and the other is a middle to upper middle class person.
14:59Many times we have seen that people and opposition parties have called the Modi government as the government of Adani Ambani.
15:05This is the reason behind that.
15:06It seems that the government collects all the taxes from middle class people.
15:11And their millionaires and billionaires friends are only given benefits.
15:16This thing shines in another data point.
15:18In the budget documents, we see that the government's earnings are coming from 19% income tax.
15:2418% is coming from GST and only 17% is coming from corporate tax.
15:29Now look at this graph, it never used to be like this.
15:31Before 2014-15, the majority share of the government used to come from corporate tax.
15:37That is, the tax imposed on companies.
15:40Gradually, the government has been reducing corporate tax over the years.
15:44And most of its tax revenue has been collected from income tax payers.
15:48The finance minister talked about 5 schemes for which Rs. 2 lakh crore outlay has been kept.
15:53First is first time employment support.
15:55Those who are going to do their first job and are registered in the government's EPFO,
16:00they can get up to Rs. 15,000 from the government.
16:03Secondly, more benefits have been given specifically to employees and employers in the manufacturing sector.
16:08Thirdly, employer support has been provided so that more employers can be encouraged to hire more employees.
16:14The government will contribute up to Rs. 3,000 per month for 2 years in the EPFO on behalf of the employers.
16:21Fourthly, the government has said that a skilling scheme will be launched
16:24in which 20 lakh youth will be made skilled in the next 5 years.
16:28And fifthly, the government has said that the government will provide internship opportunities
16:32for 1 crore youth in the top 500 companies for 12 months.
16:37This point is very interesting because the same thing was written in the Congress manifesto.
16:42To provide internship opportunities in top companies.
16:45So this is something that both parties are favoring and it is a good step.
16:50It will be interesting to see how much implementation of this scheme is actually done.
16:55You can already see the statement of the Finance Minister on 24th July that
16:58this job scheme will not be compulsory for companies but will be a nudge for them.
17:03So how many companies will actually implement it? This is a very big question.
17:07Apart from this, how much is the government spending in sectors like roadways, railways, education and healthcare?
17:13I talked about this in the last video when the government announced the interim budget in February.
17:18You can go and watch that video.
17:20And finally, the last point that is being criticized a lot is the distribution of money in different states.
17:28In this budget, the government has allocated a lot of money to the states of Andhra Pradesh and Bihar
17:34in comparison to other states.
17:3515,000 crores have been given to the capital of Andhra Pradesh for the development of Amravati.
17:40Now, there have already been elections in Andhra Pradesh but the elections in Bihar are yet to come.
17:44So the money being given to Bihar is of the next level.
17:47The government will spend 60,000 crores in different infrastructure projects in Bihar.
17:52Expressways, power plants, heritage corridors, new airports.
17:56And 11,500 crores are being given to the state for flood mitigation.
18:02Apart from this, the biggest share of the tourism budget is being given to Bihar.
18:06In Vishnupad Mandir Gaya and Mahabodhi Mandir Bodh Gaya,
18:10they will be given world-class facilities and tourism infrastructure, said the Finance Minister.
18:15It is very clear that the BJP is trying to keep its allies TDP and JDO happy in its minority government
18:22by allocating so much money to these two states.
18:24This is the reason why the leader of the opposition, Rahul Gandhi, called this budget the Kursi Bachao Budget.
18:29At one time, the BJP government favored the states of Gujarat and Uttar Pradesh in the same way
18:35and the rest of the states were ignored.
18:37But now the focus has shifted to Andhra Pradesh and Bihar.
18:41There are a lot of memes on this topic which you can see on the screen.
18:45As a conclusion, I would like to show you this chart of the country's increasing income inequality.
18:50In which you can see that over the years,
18:52rich people have become richer, poor people have become poorer.
18:56And in the last 10 years, in fact, in the last 20 years, this situation has only gotten worse.
19:02The share of the top 10% people has increased in the country's income
19:05and the share of the middle class has fallen.
19:08To address this issue, it is necessary for the government to focus on the growth of middle class people.
19:14Small businesses should be promoted instead of big corporate companies.
19:19Tax should be increased on their Arab husbands instead of increasing taxes on middle class people.
19:23I don't understand what will happen if the government collects a little more from its Arab husbands.
19:28They will be able to spend 100-200 crores less on their 5,000 crore weddings.
19:33They will get 1-2 airports less in the country and some 2-3 jungles will be saved.
19:37What will happen to them?
19:39Look at this article, friends.
19:40The situation of income inequality was not so bad even during the British rule.
19:44Can you imagine?
19:45This will only tell us in the future how the government's new policies make things better and worse.
19:51If you liked the video, you will find the link to the chat GPT course in the description below.
19:55And if you want to understand Artificial Intelligence in more depth,
19:58you can click here and watch this video.
20:01Thank you very much.
20:07Artificial Intelligence