Damn the Senior Citizen

The Damned Senior Citizen

(This is an earlier column from Moneylife. Will someone even bother about us unfortunate Seniors?)

R Balakrishnan 02 September 2020(

NVESTOR INTEREST

This is a letter to all the netas and babus who pay lip service to senior citizens (SCs). An SC is usually a retired person, usually someone who has no regular earnings except from his savings and investments. We work, earn and save till we are 58 or 60. Sometimes, in the private sector, we can work till we are physically able to. Even post-retirement, some take up some part-time job, in order to keep our hearths warm. All of us live in different circumstances.

Those of us who have saved and invested all our lives are now at a stage where we cannot take risks with our capital. Preservation of capital becomes important. (Of course, everything depends on how much one has and our lifestyles). Not many will be in a position to still ride the vagaries of the financial markets. 

At this stage of life, where no more capital is forthcoming, one can be paralysed by fear. Opportunities do not seem tempting enough and risks seem magnified. We are seeing the return on our money diminishing rapidly. At the same time, the risks are increasing. In our early days, we had learnt that higher the risk, the higher the reward. However, the government seems to think that higher risk is offset by lower interest rates.

Some frequented cooperative banks to get that extra return. Now, we are afraid to go to any private bank. The Reserve Bank of India (RBI) gives banking licences and is supposed to supervise them. It approves the appointment of managing director and directors. It does regular inspections. And, still, depositors’ money is at risk. Something is clearly wrong with the role that RBI is playing. 

One thing policy-makers must understand. All our savings are from ‘tax-paid’ money. Now, if you ask us to pay taxes, once again, on the fixed deposit interest that this money earns, it is very unfair. If the same finances were recorded on a business account, the business would get tax deductions. Here, we buy our car with post-tax money. We do not get ‘depreciation’ or ‘repairs’ or ‘fuel’ or ‘driver salary’ as deduction from what we earn. A businessman will simply charge all of this and his household expenses to his business and pare his personal taxes. 

Some of us were able to invest money in stocks. As far as I remember, taxation on dividends and capital gains has been ‘capricious’, at best. For most years, dividend was taxed in the hands of the shareholders; for some years, this was removed. It has come back. Then came ‘securities transaction tax’ (STT) on every trade. So, whether the investor makes money or not, the government keeps making money. This is clearly not government ‘for’ or ‘by’ the people. And when STT was introduced, the government told us that there would be no more capital gains on investments sold after one year of purchase. And STT would take care of everything. Alas, this promise was broken. Not only STT, on every component there is also a GST (goods and services tax)! The brokerage I pay my broker goes up by nearly half, thanks to all these levies. I would say that the government has cheated me and is robbing me only because it has the powers to make the law.

Those of us, who had ‘salary’ income through our working career, have paid our taxes. Now, giving me a certificate through an email is of no use. It cannot even be used as toilet paper. It hurts because you, in government, get benefits that are unheard of in the rest of the world. You keep your jobs irrespective of how well you do the job. You get pensions. Some of you get pensions that are linked to inflation. And some of you, who may be in your chairs for just five years, get pension for life. 

Of course, you guys are doing yeomen service for the nation and I do not grudge the goodies that you get. All I am saying is that all these goodies come to you from taxpayers like us. And you guys have the unique distinction of voting yourself your salaries and the hikes therein. So your treating the minority—us (if we were a significant vote bank, you would not have neglected us)—is a reflection of your character. 

I was very happy when you introduced discounts on railway tickets for SCs. Of course, you guys do not need any, since you never pay for anything from your own pockets. Everything was fine. Then, some bright chap in the ministry decided that we could ‘give up’ our concessions if we are ‘shamed’ for using it. This is brutal. 

As a politician, you have nothing to gain by giving us some financial support in the form of tax exemptions. You give tax breaks to businessmen because they contribute to your election funds and party money. You give concessions to this group called ‘farmers’ with four hands, no matter how rich some ‘farmers’ are—two from the Centre and two from the state. When I see that crowd standing in a queue at the neighbouring liquor shop every day, I realise it is a bigger game. They are buying liquor at the government shop which stocks liquor made by families and friends of the politicians. 

You do not even care about our health. Health insurance premiums are very expensive for us. And if we switch to a cheaper option, the new fellow will say ‘pre-existing’ conditions not covered till four years. And on the medical insurance premiums we pay, you have no qualms in applying GST at usurious rates. We are truly an ignored lot. Many of us are not financially ‘aware’. We go to someone who tells us that we can get a higher return on our savings. Yes, it’s our fault. But when the cheat is caught, you could at least help us with a better redress system. 

We are not asking for too much. We do not want certificates and hollow words of gratitude. We spend less on food and more on health. So, if you have to do anything, help us in a way where you spare us further taxes in life. Some of us have paid taxes for 40 years (more than most politicians will ever pay) and have done our bit for ‘nation-building’. The tax collection to GDP (gross domestic product) ratio is so low that we are only a small fraction of who you can target. 

One day, we will be a large part of the vote bank. At that time, we hope we can get some justice and fairness from the ruling elite. I suggest that you take a paper and pencil and find out what will you give up if you exempt us from taxes. It is not going to break the nation. You can easily make up for it by taking back some exemption that you have given to your friends who do business. You give yourselves a goal. Instead of saying ‘thank you’ to the taxpayers and others, do something that will make us say ‘thank you’.