Why the Middle Class is Struggling: Taxes, Inflation, and Corporate Profits
The middle class in India is facing a tough time. Rising taxes, inflation, and corporate greed are squeezing people dry. Let’s break it down in simple terms to understand what’s happening and why it matters.
The Popcorn Tax Controversy
Recently, the government announced different GST rates for popcorn:
- Non-branded popcorn: 5% GST
- Branded popcorn: 12% GST
- Caramel popcorn: 18% GST
This led to memes and jokes online, with people calling Finance Minister Nirmala Sitharaman "Vasooli Taai" (Collection Aunt). But the issue is much deeper than popcorn taxes. It’s about how the middle class is being burdened with taxes while struggling to make ends meet.
The Shrinking Middle Class
India’s middle class is shrinking, and it’s affecting the economy. Companies like Hindustan Unilever, Nestle, and Tata have reported falling sales of everyday products like food, cosmetics, and cleaning supplies. This is because the middle class, which drives most of the consumption, is running out of money.
- Upper Class (India-1): 120 million people with high incomes. They’re spending on premium products.
- Middle Class (India-2): 300 million people with moderate incomes. They’re cutting back on basic necessities.
- Lower Class (India-3): The majority of the population, living in poverty and relying on free rations.
The middle class is being crushed under the weight of taxes and inflation, while the rich get richer.
Corporate Profits vs. Worker Salaries
Indian companies are making record profits, but they’re not sharing the wealth with their employees.
- Corporate profits have quadrupled in the last 5 years.
- Salaries, however, haven’t kept up with inflation.
CEOs like Narayana Murthy (Infosys) have even suggested that people should work 70 hours a week to improve the economy. But the truth is, workers are already overburdened and underpaid.
How the Government is Failing the Middle Class
The government is taxing the middle class heavily while giving breaks to big corporations.
- Income Tax: Only 1.6% of Indians pay income tax, but they bear 30% of the tax burden.
- GST: The middle and lower classes pay most of the GST, while the rich contribute very little.
- Corporate Tax: The government reduced corporate taxes in 2019, losing ₹9 trillion in revenue. This money could have been used for healthcare, education, and infrastructure.
Everyday Expenses Are Becoming Unaffordable
From cars to houses, the middle class is being priced out of basic aspirations.
- Cars: Taxes make up more than 50% of the cost of a car. For example, a Toyota Fortuner worth ₹2.6 million costs over ₹5 million after taxes.
- Houses: Property prices have skyrocketed, with a 23% increase in just one year. Renting is also becoming unaffordable.
- Education and Healthcare: Private schools and hospitals are expensive, and GST on insurance premiums has made healthcare even costlier.
The Bigger Picture: A Threat to Democracy
When the middle class shrinks, it’s not just an economic problem—it’s a threat to democracy. Research shows that countries with a strong middle class are more likely to remain democratic. In India, the middle class is losing its power, and the gap between the rich and poor is widening.
What Can Be Done?
1. Demand Fair Taxation: The government should tax the rich and corporations more and reduce the burden on the middle class.
2. Push for Higher Wages: Companies should increase salaries to match inflation.
3. Invest in Public Services: Better schools, hospitals, and infrastructure can reduce the reliance on expensive private services.
4. Stay Informed and Vote Wisely: Support leaders who prioritize the middle class and fight against corporate greed.
Final Thoughts
The middle class is the backbone of India’s economy, but it’s being squeezed dry by taxes, inflation, and corporate exploitation. It’s time for people to wake up, demand change, and hold those in power accountable.
Let’s work together to build a fairer and more equitable society. Share your thoughts in the comments—how has the rising cost of living affected you?
Thank you for reading this article.
