Budget 2022: Provision of Social Security for Income Tax Assessees- Need of Hour

The Developed countries provide for Social Security for it’s  Citizens. The citizens who spend their whole life in the service of the country & the society after long hard work do need Social Security. In our country, those in Government & Semi Government jobs get social security through various Government schemes while in service and through pensions & life long medical assistance of self, spouse & dependents after retirement. The poor & the underprivileged get some security through the various benevolent welfare schemes tailor made for them. The MPs & MLAs get pensions & various other benefits even after they cease to be elected representatives in recognition of the yeoman service they render to the nation & for the ‘Good’ of it’s people. But, the Income Tax Assessees who have paid loads of Income Tax, cess & surcharges throughout their lives do not get any sort of Social Security in time of medical or financial crisis. Nor do they get any pension or any social security even when their income dwindles & health deteriorates while they attain Senior Citizenship.

It is worth pondering that what does the Government do for Income Tax payers who are honestly & willingly parting with a big chunk of their hard earned money to fill the coffers of the Government. Are the Income Tax payers not entitled to social security and free medical facilities in their adverse times.

Can we not learn lessons from the West by emulating them in the field of Social Security? The policymakers should bear in mind that we are a Welfare State and the Government’s endeavour should aim at the welfare of it’s people. By providing Social Security to it’s Income Tax payers, it would march ahead as a welfare state as committed by our Constitution.

It is the humble suggestion of all taxpayers of India that a portion of the Income Tax paid by the Income Tax payers be segregated and a corpus be formed which invests alike ELSS/EPF. Out of the returns arising from this corpus, mandatory medical insurance and social security schemes for the Income Tax assessees should be formulated for the benefit of this class. This step would help improve the credibility of the government among the country’s people. This policy would incentivise the tax payers to pay Income Tax honestly as they would be direct beneficiaries by way of Social Security. Such a move would create trust between government and individuals, which is missing in the present times.

This theory of grant of Social Security is based upon the evolution & growth of a family. When the children are young, the parents take care & invest in their education, marriage & address their housing & family needs with the hope & belief that the children whom they have reared would look after them in their old age. Similarly, the IncomeTax Payers contribute their mite when they are in their prime. How is their expectation of social security from the Government in their adverse times unfounded? Is it not  fair & rightful that Income Tax collected from the individuals by the Government must be available, in part, as pension, assistance in medical emergency or during period of business loss or unemployment.

One important reason  in support of old age pension is that people tend to invest in real estate, gold or keep cash in their bank lockers as a security for their old age/troubled time. Such blocked dead money is detrimental to our economy and increases inflationary pressure. The Government should realise the plight of the taxpayers who have spent their whole life contributing taxes to the country’s economy. It is the responsibility of the Government to look after them in their old age. This policy, once implemented, would bring a sea change in the thinking of the taxpayers who would  pay Income Tax voluntarily,  correctly & honestly.

Later on, depending on the outcome/success of this scheme, the Government should consider similarly rewarding individuals on GST earned by the Government  on spendings by such individuals. The GST contributed by the individuals by way of GST should be credited to the Social Security vault of the individual through PAN & Aadhaar. It is relevant that the more the individual spends for purchase of Goods & Services, the more GST is collected by the Government and this is a chain reaction which will induce individuals for higher spendings which will boost our economy.

Such a benevolent but rightful scheme would not only increase the social bonding of the government with it’s people but also curtail corruption in the society & promote honest tax compliance.