Modi govt ended whatever sanctity tax administration system enjoyed: Cong

Flagging alleged large-scale tax avoidance among India's most affluent, the Congress on Monday alleged that the Modi government has ended the sanctity of the tax administration system, sending out the message that any evasion will be overlooked if a hefty donation is made to the BJP.

Congress MP and general-secretary (communications) Jairam Ramesh cited a recent paper by Dr Ram Singh, one of India's leading economists and director of the prestigious Delhi School of Economics, to press his argument.

He said the paper found large-scale tax avoidance among India's most affluent. Elaborating on the key takeaways from the paper, Ramesh said the wealthier a household, the lesser the income reported related to the wealth.

"For the bottom 10% of families, total reported income amounts to more than 188% of the family wealth. For the top 0.1% of families, total reported income is a mere 2% of the family wealth," Ramesh wrote in an X post, citing the paper.

Tax avoidance is an important factor behind the relatively small value of the reported income-wealth ratio for extremely wealthy families, he said.

In effect, India's income tax system is regressive since the rich are able to get away without paying taxes by evading them, the Congress leader said, citing the paper.

"The Modi government has done absolutely nothing to change the reality of this large scale tax avoidance. Instead, with its extortion of electoral bond donations from individuals and companies and politicization of raids to intimidate the opposition, the Modi Government has ended whatever sanctity the tax administration system in India enjoyed," Ramesh claimed.

"The message, implicit and explicit, that has gone out is that with a hefty donation to the BJP's campaign coffers, evasion of any scale can be overlooked," he said in his post on X and shared the paper.