Subsidies are usurped by the rich, and it goes to say that much of the benefits that subsidies are supposed to provide, happen to be used largely by the rich too. PPF Subsidized the Rich By 12,000 cr. Here’s a graphic in the eco-survey about the kind of subsidy that’s been provided to people who don’t really deserve a subsidy: Look at PPF – the effective interest rate if you assumed both principal and interest were taxed, is 16%, which is a 6% subsidy. On the total amount, that’s about 19,182 cr. but we take only 62% of this figure, as about 62% of people who file 80C claims are people earning more than 4 lakh per year. This is a little shady because the really poor won’t even file tax returns, and they may still have a PPF account. The only solution, of course, is to make PPF taxable in some way or the other, I supposed.… (Read On…)
[via Capital Mind]
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