The budget served India’s self-proclaimed middle class a reality check

livemint.com:

Middle class’ is a term used rather loosely by individuals wanting to project that they are not as well-off as others think they are. And it has been used extensively on social media since the Narendra Modi government decided to remove indexation benefits available on long-term capital gains made on the sale of property. We have been told by rich mutual fund agents, chartered accountants and registered investment advisors in the business of managing other people’s money that this is an anti-middle class move.

Many of those complaining about the move have been supporters of the Modi government, making their discontent on social media funnier, given how they now feel that their support has counted for nothing. Now, before getting into further details, let me make a couple of points. First, the government shouldn’t be incentivizing one kind of income over another, and all income should be taxed the same way.

Removing indexation benefits is a move towards that. Second, more than 10 million flats in India have been bought and kept locked for investment purposes. It’s these flat-owners who will be hurt by the government’s decision.

And anyone who can afford to buy a flat and keep it locked isn’t really middle-class, despite the lack of a proper definition of the term. So, that leaves us with another question: What about the well-to-do who have supported the Modi government and, as they have been saying on social media lately, gotten nothing material in return? Well, let me tell you a small story. In late July, I was part of two tourist tours, one in Oxford and another in Edinburgh.