A temporary windfall gains tax to fund the 14th month bonus or the increase in minimum wages/ Guaranteed minimum income ?
Why are some extra parliamentary parties against the 14th month bonus funded by a windfall gains tax ?
Govt is totally justified in imposing a windfall gains tax now given that the Wage Assistance Scheme amounting to some Rs 21 billion which was disbursed because of the cessation of activities of most of our companies during the Covid pandemic, has not been reimbursed by the majority of beneficiary companies, including banks and insurance companies. Moreover many of the companies which have been making record profits have benefited from the depreciation of the rupee which has squeezed household real incomes and family budgets. From June 2014-June 2023, the rupee has depreciated by 48%. 19 companies which were generating profits amounting to Rs 13 bn in 2019 registered profits totalling Rs 24 bn in 2022 and a jackpot of Rs 42 bn in 2023.
Bhadain believes that the payment of a 14th month bonus salary will aggravate the problem of inflation. It is possible to lessen its impact by having it paid in instalments. The amount collected by Govt will be enough to cover the cost for some small SMEs that will be struggling to pay the 14th month bonus.
Bhadain talks of the lack of responsibility on the part of the opposition. Is it not the role of the opposition to ensure that the purchasing power of the lower-income groups already burdened by debt is not eroded in a situation where Govt is least bothered about spiraling inflation and the entrenched inflationary expectations ? Does Bhadain expect the parliamentary opposition to be more catholic/papist than the Pope?
What about the responsibility of the BoM ? They are failing in having a grip on inflation ! How can they when they are still fuelling the market with printed money ! Of the Rs 80 billion extended to the MIC, only Rs 50 billion has been disbursed to the companies and cronies ? If the BoM was serious about the impact of money creation on inflation, they should have written off the remaining Rs 30 billion ? Bhadain has nothing no say on that !
And our corporates ? Have you heard them complaining about the failure of the BoM in implementing its new monetary framework or commenting on IMF’s recommendations that BoM relinquishes ownership of the MIC or about the need for BoM stopping its quasi-fiscal financing ! They are having it too good - the deliberate policy by Govt of depreciation of the rupee and moderate increase in the Key Rate.
A temporary windfall gains tax to fund the the increase in minimum wages is still a better proposal than how Govt will be financing the National Wage Consultative Council’s (NWCC) recent recommendation of a minimum wage of Rs 15,000 and the Rs 2000 increase in the guaranteed minimum income - it will be financed mainly from our pockets via the MRA or the CSG and the private sector will be contributing just a bare minimum.
The increase in minimum wages and the guaranteed minimum income is also likely to fuel inflation . Didn't hear Bhadain say anything on that ! Chup -Chap ! Why, because he does not wish to take the risk of making a dent in his following and vote shares ! His stand against measures that stoke up the inflationary pressures seem to be a very recent concern in his new posture as potential PM . In his recent past, the impact of the populist splurges of his ex-party on the economy does not seem to have bothered him.
There is a prevailing perception that the private sector, especially big business, is reaping most of the benefit of government policies and behind the usual public “theatrics” of some of our politicians -even in the opposition-we find that they seem to be very accommodative to these policies.
SA Ki ZO APPEL SANNZMAN !!!! (sic)
