Tax on 60% EPF withdrawal not inappropriate
Of the working population in the country , around 5% belong to the organized sector and around 95% belong to unorganized sector. Amongst the unorganized sector, more than 50% are involved in agricultural related activity. In the unorganized class, 30% of the people belong to lower income group not knowing as to from where the next meal would come from.
Therefore, the above tax has implications only for organized class, who constitute just around 5% of the national working population.
It is certainly appropriate to consider the organized class as comparatively privileged class of the society. Their salary and income are constantly increased by pay revisions, allowances in tune with the cost of living index etc. By constantly raising their demand for pay increase and resorting to coercive steps like strike and go slow in the name of trade union rights, the organized class have reasonably good income and they should be considered as belonging to middle or upper middle income group.
The ground reality is that chunk of the expenditure of the employers (both government and private ) are spent towards salaries and perks for the employees.
For example, the recent 7th pay commission would involve an additional expense for the central government to the tune of more than Rs.One lakh crore.
All state governments have now to increase the salaries and perks for their employees because of their demand, consequent to the pay increase for central government employees. This will amount to several crores of rupees. To the extent that such expenses are incurred by the central and state governments towards payment of salaries and perks to the employees, the money available with the governments to spend for the welfare and progress of 95% of the unorganized class will become less.
Obviously, organized class reap the benefits at the cost of unorganized class to some extent. In such circumstances, one can say that the organised class is morally indebted to unorganized class..
It should be further kept in mind that all government employees get life long pension after retirement which pension amount are constantly raised in tune with the cost of living index and pay revision from time to time . Further,in the unfortunate event of the death of the retired government employee, family pension is also provided.
At the time of retirement, if the organized class has to pay tax once on the retirement benefit that they get, which money will be available for the government to spend for the betterment of the unorganized working class , substantial section of whom are in deprived and downtrodden condition, it only amount to “paying the debt” due to the unorganized brethren of the country.
What the organized class have got to complain ?
Nandini Voice For The Deprived